The school will move to Pukapunyal, Victoria, to make way for a massive freight terminal.

Wattle Grove resident Patrick Perry-Bolt, who trained at the school as a reservist engineer in 1971, said: ``The problem with the location in Victoria is that it's not near the water.

``Being near a river is integral for engineer training.

``They are primarily training in building bridges and maintaining water supply during battle.''

Mr Perry-Bolt said the school was a historical fixture in Liverpool, established before World War II, so it should remain.

``Besides, I'm very concerned about this intermodal freight terminal the Federal Government is planning,''

he said.

``It's going to be a disaster for this area.

``Our roads will be filled up with trucks and the traffic will be a nightmare.''

A Defence Force spokeswoman confirmed that the school was to move this year but that plans were still being worked out.

She did not respond to questions about the appropriateness of the new location in Pukapunyal.

``Development of an intermodal freight terminal at Moorebank will require defence units, primarily the School of Military Engineering, to relocate to other sites,'' she said.

``Defence is continuing to work with other government agencies to progress the intermodal proposal.''

Menai state MP Alison Megarrity (Labor) said there had not been any progress on planning for the terminal and that Moorebank was just a ``potential intermodal site''.

``I don't believe that the plans for the terminal have been made and the Federal Government would just be sitting on them,'' she said.

``If the Government had already put together the plans they would be going ahead with the terminal, there would be no reason to hold off.''