Victoria's CFA spent millions of dollars upgrading sleeping quarters at its Fiskville training centre, even though the authority knew contaminated sludge was in one of its dams, an inquiry has heard.
Former and current CFA managers were grilled by a parliamentary inquiry on Wednesday.
It's investigating the use of toxic chemicals and contaminated water at the fire training complex since the 1970s, and any associated health problems including a cancer cluster.
The Victorian government, responding to the health risk, shut the centre last year.
Former operations manager John Myers, operational training executive director Lex De Man and CFA facilities manager James Stitz were asked to explain what they did when told water in one of Fiskville's dams was potentially contaminated.
The inquiry was told that despite repeated warnings in internal emails in February 2012 that one of its dams contained toxic sludge, CFA management failed to act immediately and instead directed $6 million of government funding to upgrading the facility's accommodation.
The three men said pressure to accommodate more than 300 new firefighters at the site forced them to prioritise sleeping quarters over cleaning up the dam.
They were asked if they believed the CFA failed in its duty of care to employees by not cleaning up the dam.
Mr De Man said CFA managers followed expert advice assuring them water was not contaminated by the sludge.
"The advice of those with credentials and expertise in water quality management ... was that water being used was not affected," he said.
However, Mr De Man said, "Yes, the (decontamination) work needed to be done".
The inquiry also heard that although water was not drawn from the dam by firefighters after 2001, it remained connected to a second dam that was in use.
Mr Myers said the two dams were not separate because he was advised the contaminated sludge would not transfer into the water of the second dam.
The inquiry continues on Thursday.
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