Sydney Water Annual Report At a glance

Transcription

1 Sydney Water Annual Report 2011 At a glance 6

2 At a glance About Sydney Water Sydney Water s role We are Australia s largest water utility, providing essential services to over 4.6 million people in Sydney, the Illawarra and the Blue Mountains. Sydney Water supplies about 500 billion litres of water a year to over 1.7 million homes and businesses meeting stringent national water standards. We also collect and treat over 500 billion litres of wastewater a year. In an Australian first, Sydney Water is producing hydroelectricity from wastewater to help power its wastewater treatment plants. We recycle about 47,500 million litres of wastewater a year and beneficially use the biosolids we capture during treatment for agriculture, composting or land rehabilitation. In providing these essential services to the community, we have three principal objectives we must meet: protect public health protect the environment be a successful business. Our aim is to ensure that the customer is front of mind in everything we do, and that we are forward thinking and operate efficiently. To help deliver our objectives and outcomes, we continue to build a safe, capable and committed workforce. Sydney Water is a statutory state owned corporation, constituted under the State Owned Corporations Act 1989, and operates under the Sydney Water Act We also provide some stormwater services, mainly in southern Sydney, the inner west and Rouse Hill. Sydney Water supplies about 500 billion litres of water a year to over 1.7 million homes and businesses. 7

3 Sydney Water Annual Report 2011 Chairman and Managing Director s review A key focus for Sydney Water over the past few years has been planning for a sustainable future by securing Sydney s water needs, investing in infrastructure to service growth and reducing our carbon footprint. For the future, we need to look at more flexible solutions to providing water services that are energy efficient and have a positive effect on the environment. We must also ensure that we do this efficiently and effectively and that this does not translate into prices that customers are not willing to pay. In recent years, Sydney Water has substantially reduced its operating costs and plans to continue doing so over the next five years. Savings have mainly come from better managing our operations and maintenance, and by adopting innovative solutions in recycling, energy management, asset management and information technology. Through a joint effort with the community, Sydney Water more than met its Operating Licence target this year to reduce total demand for water. We achieved this through effective water efficiency measures and recycling schemes, and by investing in leakage prevention and pressure reduction programs. This adaptive planning approach ensures that there is sufficient water available over time to meet population growth, protect river health and respond to future droughts. Focusing on customers Sydney Water regularly seeks feedback to understand what s important to customers, how we are performing and what improvements we need to make. In particular, we value the advice and feedback we continue to receive through our Customer Council. In 2010, we developed new approaches with the council for working with customers in financial difficulty. We also benchmarked our hardship program against other water and energy utilities to build an industry best practice model. To improve our service, we introduced a new customer management system so all customer interactions are transparent. We also introduced a number of field-based initiatives to improve productivity and reduce costs. We still need to put more emphasis on understanding customer needs in our planning, decision-making and service delivery. This includes addressing growing customer expectations around value for money. Investing in the future Over the next 25 years, Sydney s population is expected to increase by 1.5 million. Sydney Water will spend over $1 billion to service growth over the next five years. This will include upgrading some water and wastewater systems to service priority new housing sites. In , Sydney Water delivered a $636 million capital works program. Over the next five years, we will continue to deliver major projects in line with increasing demand for infrastructure and services. Working in partnership with the public and private sectors is critical to our business and the timely delivery of our major capital works for the benefit of customers. Our partnerships involve using best practice and sharing knowledge, risks and returns. This year saw the commissioning of Sydney s largest water recycling project at St Marys. The plant will recycle about 18 billion litres a year, playing a significant part in ensuring that greater Sydney reaches its target of 70 billion litres a year by Sydney Water worked with Deerubbin WaterFutures, a consortium of companies consisting of United Group Infrastructure, McConnell Dowell Constructors (Aust) and GE Water and Process Technologies to deliver this major water recycling project. Sydney s desalination plant has been in full production since June 2010 after coming online in January that year. In July 2010, it was formally handed over to Veolia Water Australia to operate. In May 2011, the Minister for Finance and Services declared the Sydney Desalination Plant a monopoly supplier of non-rainfall dependent drinking water under the Water Industry Competition Act Following this, the Minister referred SDP to the Independent Pricing and Regulatory Tribunal of NSW, for a public review and determination of the prices it can charge its customers. This will ensure that Sydney Water continues to obtain drinking water from the plant at an appropriate and efficient price. 8

4 At a glance Reducing our carbon footprint We are on track to meet our 2020 target of being carbon neutral for energy and electricity use. As part of our $60 million investment in renewable energy, Sydney Water is producing hydroelectricity from wastewater to help power wastewater treatment plants. In June 2011, the Prospect Hydroelectric Plant began operation. The plant will generate about five per cent of Sydney Water s total energy needs every year enough electricity to power over 1,500 homes a year. Our 11 renewable energy projects will reduce our reliance on external electricity sources by 20% a year, saving about $6 million a year. Supporting others This year, Sydney Water provided significant support following the devastating Queensland floods and the Christchurch earthquake. We are proud to have been able to provide this assistance to our water industry colleagues and the communities involved in their time of need. Sydney Water continued to be recognised for its leadership by winning four major human resources awards. We were also pleased to be voted in the inaugural Dream Employers Survey as one of the top 10 organisations to work for in Australia and New Zealand. In August 2011, the Managing Director, Kerry Schott, left Sydney Water after five years at the helm. Kerry led Sydney Water with great clarity, character and knowledge and leaves a lasting legacy for which the Board and organisation are very grateful. We also wish to acknowledge the efforts of the Board, the Executive team and all of our people who make Sydney Water such a great organisation. Finally, we look forward to meeting the challenges ahead. Sydney Water will continue to work with stakeholders, partners and industry to achieve sustainable solutions in serving our community into the future. We also gave over $1 million to more than 50 organisations as part of our Community Investment Program. This included donating $160,000 to programs assisting people in financial hardship and sponsoring the Powerhouse Museum s new EcoLogic: creating a sustainable future exhibition. Safe and committed workforce Sydney Water cares about the health and wellbeing of its staff and contractors and wants to ensure a safe workplace where people go home injury-free. While injuries overall were down, we did have an increase in lost-time injuries for both staff and contractors. Manual handling, slips, trips and falls caused the majority of incidents. In particular, we need to focus more in highrisk areas. Although we made some improvements and introduced a number of safety innovations this year, we still have work to do to improve our safety record. In March 2011, we received a report from the Independent Commission Against Corruption (ICAC) into the corrupt conduct of a number of staff and external contractors. This followed a public inquiry in September 2010 after Sydney Water had identified and raised the issues with ICAC. Sydney Water has already actioned most of the recommendations made. This included training staff in corruption and fraud prevention and establishing a Corruption Hotline. Thomas G Parry Chairman Kevin Young Managing Director 9

5 Sydney Water Annual Report 2011 Highlights July Civil Contractors Federation NSW Earth Award for the 18 km desalination pipeline, which takes water from the desalination plant at Kurnell to Erskineville. The award recognises excellence in environmental, project and construction management. February 2011 Opened a state-of-the-art Water Recycling Education Centre for universities, technical and further education (TAFE) colleges and high schools, professional trade groups and community groups to explain the role of water recycling in securing Sydney s water supply. July 2010 NSW Government Green Globe Award for our $60 million investment in renewable energy projects. Projects will save Sydney Water $6 million a year in avoided electricity costs and further our carbon neutrality commitment. September 2010 The desalination project won the National Australian Institute of Project Management Award for the best project in the Construction/Engineering category for projects over $100 million. October 2010 Won four human resources (HR) Leader Compass Awards: Best HR Strategic Plan Best Employer Branding Strategy Best Talent Management Strategy Employer of Choice (more than 1,000 staff). March 2011 Introduced a Customer Management System to provide a holistic view of customers. Staff can now capture information in the one place and therefore manage customer interactions better. April 2011 The desalination plant was named desalination plant of the year at the Global Water Summit in Berlin. The plant was delivered on time and $89 million under budget. June 2011 Continued to meet Australian Drinking Water Guidelines. Customers rated the quality of the drinking water that comes out of their taps as 8.2/10. June 2011 Began operating the Prospect Hydroelectric Generator, one of 11 renewable energy projects helping us to reach our 2020 target of being carbon neutral. Sydney Water also received highly commended for Innovation in Recruitment and Retention. October 2010 Commissioned St Marys Water Recycling Plant, which provides about 18 billion litres of highly treated recycled water a year to help maintain the flow of the Hawkesbury-Nepean River. November 2010 Voted as one of the top 10 organisations to work for in Australia and New Zealand in the Dream Employers Survey. 10

6 Areas to improve August 2010 Had a major main break on Moore Park Road, Paddington, which saw millions of litres of water loss, and impacts on customers across the Centennial Park area. August 2010 Received a penalty notice under the Protection of the Environment Operations Act 1997 for washing dirt into a stormwater drain outside a construction site at Narellan. We have made changes to stop this happening again. March 2011 Received a report from the NSW Independent Commission Against Corruption (ICAC) into the conduct of a number of Sydney Water staff and external contractors following a public inquiry in September Sydney Water had identified and raised the issues with ICAC. The report made a number of findings and 18 recommendations. Sydney Water has implemented the majority of these, and the balance will be implemented by December March 2011 At a glance Received a penalty notice under the Protection of the Environment Operations Act 1997 for a delayed clean-up associated with a wastewater overflow to Toongabbie Creek, Baulkham Hills. The overflow occurred during a period of unusually high emergency water main breaks. Sydney Water investigated the incident and has put additional resources and processes in place to manage such situations in the future. June 2011 Despite a long-term decreasing trend, our lost-time injury frequency rate (LTIFR) for staff increased for the second year in a row from 4.86 to 5.9. The LTIFR for contractors also increased to 3.28 from This year we have made some improvements in the overall number of injuries and introduced a number of safety innovations. However, we still have work to do to improve our safety record. Network Technicians assess the situation and either do the repair or arrange for the right crews and equipment to do the job. 11

7 Sydney Water Annual Report 2011 Sydney Water Board John Brown Non-executive Director John Fletcher Non-executive Director Kerry Schott Managing Director Bob Pentecost AM Non-executive Director Thomas G Parry AM Chairman 12

8 Sydney Water Annual At Report a glance 2011 Ralph Kelly Non-executive Director Brian Gilligan Non-executive Director Greg Stewart Non-executive Director Kate McKenzie Non-executive Director 13

9 Sydney Water Annual Report 2011 The Board Dr Thomas G Parry AM (Chairman) BEc (Hons), MEc, PhD Term of appointment: 1 June 2010 to 30 September Appointed as Chairman on 1 June Chair of the Regulatory and Reform, People and Remuneration, and Desalination Plant committees. Member of the Finance, and Public Health and Research committees. Tom was a consultant to Macquarie Capital Funds Group until August He was Foundation Executive Chairman of the Independent Pricing and Regulatory Tribunal of NSW (IPART) and its predecessor, the Government Pricing Tribunal of NSW from 1992 to He was an ex officio Commissioner of the Australian Competition and Consumer Commission (ACCC), a member of the NSW Council on the Cost and Quality of Government, and the Foundation NSW Natural Resources Commissioner. He was also a member of the Board of NSW Health s Clinical Excellence Commission and South East Area Health. Tom is currently Chairman of Australian Energy Market Operator, Chairman of First State Super, a director of the Sydney Opera House Trust, a director of the Australian Securities Exchange s Compliance Company, a director of Powerco NZ, and a Member of the Advisory Council of the SMART Infrastructure Facility at the University of Wollongong. Dr Kerry Schott (Managing Director) BA (Hons), MA, D Phil Term of appointment: 2 August 2006 to 1 August Appointed as Managing Director August Ex-officio member of all committees. Kerry is a member of the Infrastructure Australia Board. She was previously Deputy Secretary, NSW Treasury. Kerry was a non-executive Director of the Sydney Water Board from 1997 to She spent 15 years as an investment banker, including as Managing Director of Deutsche Bank and Executive Vice President of Bankers Trust Australia. She has worked as an economic policy adviser with the Reserve Bank of Australia and the Commonwealth Government, and as an academic at University College London and at Oxford University. Kerry was Chairman of the NSW Environment Protection Authority and the NSW Film and Television Office, a director of the Film Finance Corporation Limited and director of Australian Airlines Limited. She has been a member of the Corporations and Securities Panel and a Trade Practices Commissioner. John Brown (Non-executive Director) BCom, FCA, MAICD Term of appointment: 7 September 2010 to 30 September Appointed as Director on 7 September Chair of the Board s Audit and Risk Committee. Member of the Regulatory and Reform, People and Remuneration, and Desalination Plant committees. John was previously a partner with KPMG for over 26 years and since then has been appointed to be the chair or member of the audit committees of a number of NSW and Federal public sector entities. John is also a director and chair of the Audit Committee of Integrated Research Ltd and is a director of The Gift Of Life Foundation Ltd. John Fletcher (Non-executive Director) BSc, MBA, FAICD Term of appointment: 7 April 2011 to 31 March Appointed as Director on 7 April Chair of the Finance Committee. Member of the Audit and Risk Committee. John is a director of APA Group. He was previously a director with Integral Energy Australia, Foodlands Australia Limited, Alinta Energy Group (formerly Babcock & Brown Power Group) and Natural Gas Corporation Holdings Limited (New Zealand). John has held a number of executive roles at the Australian Gas Light Company, including Chief Financial Officer and Group Manager Investments. Brian Gilligan (Non-executive Director) BA, DipEd, MA, FAICD Term of appointment: 7 September 2010 to 31 May Appointed as Director on 12 May Chair of the Environment Committee. Member of the Regulatory and Reform Committee. 14

10 At a glance Brian is Assistant Commissioner with the NSW Natural Resources Commission, a director of the Hunter Valley Research Foundation, chair of the Board of the University of Newcastle s Tom Farrell Institute for the Environment and an independent member of the Audit Committee for Parks Australia. His former appointments include Director-General, NSW National Parks and Wildlife Service ( ), Executive Director Operations, NSW Environment Protection Authority ( ), and director, Hunter Water Corporation ( ). Ralph Kelly (Non-executive Director) BCom, MBA, SF Fin, FAICD Term of appointment: 7 September 2010 to 31 December Appointed as Director on 21 September Member of the Audit and Risk, Environment, Finance, and People and Remuneration committees. Ralph had been in investment banking for over 30 years, with particular experience in corporate finance advice, infrastructure and listed capital raisings. He is now a financial consultant and principal of Pennant Advisory Services Pty Ltd. He is currently a director of Essential Energy, FSS Trustee Corporation (the trustee of the First State Superannuation Scheme), Health Super Investments Pty Ltd (Chair), and Ausflag Limited, and he is an independent member of the Audit and Risk Committee of the Office of State Revenue, NSW. Kate McKenzie (Non-executive Director) BA, LLB Term of appointment: 1 February 2011 to 31 December Appointed as Director on 1 February Member of the Audit and Risk Committee. Kate is Group Managing Director, Telstra Innovation Products and Marketing at Telstra. Before joining Telstra, Kate was Director-General of the Department of Commerce in NSW and previously held a range of senior executive roles in government departments and offices. Bob Pentecost AM (Non-executive Director) BE (Civil), GDA, MAICD Term of appointment: 8 October 2010 to 30 September Appointed as Director on 8 October Member of the Environment, Public Health and Research, People and Remuneration, and Desalination Plant committees. Bob has worked in the private sector as a director on several boards, and also in government, giving advice at ministerial and cabinet level. Recently, Bob was the Chief Executive Officer of Rail Infrastructure Corporation. He has filled similar roles at Network Design and Construction (telecoms), Merlin International Properties and the Darling Harbour Authority. He is a director of Allconnex Water and was a director of Hamilton Island Pty Ltd. Bob was awarded membership to the Order of Australia for services to the building and construction industry in He is a member of the Industry Advisory Network University of Technology Sydney. Dr Greg Stewart (Non-executive Director) MBBS, MPH, FRACMA, FAFPHM Term of appointment: 1 December 2008 to 30 November Appointed as Director on 1 December Chair of the Public Health and Research Committee. Greg is the director of Population Health for the NSW Health Reform Transition Organisation (Western). He was previously Chief Health Officer of NSW; Chief Executive Officer of Wentworth Area Health Service; and director of the Public Health Unit of South Western Sydney Area Health Service. Greg is a member of the NSW Medical Council, the Board of the Australian Institute of Health and Welfare and the Council of the Australasian Faculty of Public Health Medicine. Throughout her career, Kate has been involved in management of the commercial impacts of complex policy issues including competition, energy reform, corporatisation and privatisation. Kate holds Bachelor of Arts and Bachelor of Law degrees from the University of Sydney. 15

11 Sydney Water Annual Report 2011 Our structure Office of the Managing Director Company Secretary Group audit Health and safety Strategic planning Asset Management Paul Freeman Asset Solutions Ian Payne Corporate Services Denise Dawson Customer and Community Relations Angela Tsoukatos Finance and Regulatory Alan Ramsey Asset planning Group property management Investment program Recycled water development Stormwater Delivery of capital works program Engineering services Procurement and contracts Program delivery water, sewer and growth Corporate insurance Legal counsel Information technology Risk management Shared services Business customer services Communications and marketing Community relations Contact centre Customer service Corporate compliance Financial control Financial accounting and statutory reporting Regulatory strategy and pricing Strategic assest management Urban growth Project management Workplace accommodation Government relations Media Online services 16

12 At a glance Board of Directors Managing DIrector Kerry Schott * Human Resources Peter Mills Maintenance Eric De Rooy Operations Colin Nicholson Sustainablity and Regulation Kaia Hodge/Judi Hansen HR strategy and operations Industrial relations Organisation development Planning and reporting Recruitment and retention Civil delivery Construction Engineering and contracts Logistics and support Mechanical and electrical delivery Emergency management Energy management Hydraulic systems Monitoring services Network operations Treatment operations Environmental planning and management Science and technology Strategic directions Reward and recognition *as at 30 June

13 Sydney Water Annual Report 2011 Sydney Water Executive Denise Dawson, General Manager Corporate Services BBus, GradDip (Acctg) Denise was appointed General Manager Corporate Services in April Denise is responsible for managing and delivering a range of business services across all Sydney Water divisions including: providing the key business and administration functions of payroll, accounts payable, transactional accounting and financial reporting driving Sydney Water wide Business Improvement Initiatives providing a secure and reliable computing environment to support the Sydney Water business developing, maintaining and improving the Risk, Business Continuity and Management Assurance frameworks for Sydney Water providing ethical and independent general legal counsel and legal support to Sydney Water. Corporate Services major achievements during include: successfully delivering a significant IT capital investment program of $69 million, including major projects Maximo Consolidation and Customer Management System Phase 1 implementing a new intranet site as part of the Sydney Water Information Management project with an update of 80% of content developing a system to track and record benefit realisation across the business implementing an improved control regime for assessing corruption and fraud achieving a large reduction in fleet numbers, resulting in significant savings to the organisation upgrading the payroll system to provide greater functionality and improved processes rolling out the new electronic delegations manual to provide easier access and greater visibility to those with financial delegations. Eric De Rooy, General Manager Maintenance BE (Civil), (Hons), MBA Eric was appointed General Manager Maintenance in October Eric is responsible for the maintenance and renewal of all of Sydney Water s service-related assets. Maintenance s major achievements during include: improving the overall availability and reliability of assets improving water and wastewater service delivery for customers successfully delivering the maintenance workplan and renewal program, resulting in a lower impact on customers from water main and sewer main faults, and compliance with the relevant Operating Licence standards meeting efficiency targets and budget implementing a significant change program to achieve better efficiencies in future years. Paul Freeman, General Manager Asset Management BE (Mech) (Hons) Paul was appointed General Manager Asset Management in He is responsible for planning, managing investment in, and the strategic operation of, Sydney Water s water, wastewater, recycled water and stormwater infrastructure. This includes new assets to service growth and optimising maintenance and replacement of existing assets. Asset Management s major achievements during include: planning to service new growth, particularly in the north-west and south-west growth centres developing recycled water schemes managing Sydney Water s real estate portfolio including contaminated land managing assets to lowest life cycle costs reviewing all aspects of the division, resulting in the initiation of five reforms designed to deliver efficiencies and greater value for customers. 18

14 At a glance Judi Hansen, General Manager Sustainability and Regulation BSc (Biol), MSc, PhD September 2003 to March 2011 Judi was appointed General Manager Sustainability and Regulation in September She was responsible for developing long-term strategic plans for water supply, demand management, recycling and integrated water services for new growth. She was also responsible for environmental planning and management and delivered the research and development program. Sustainability s major achievements during include: undertaking analysis to identify the effect of water prices on the demand for water developing a new econometrics-based tool for forecasting water demand achieving recertification of Sydney Water s International Organization for Standardization (ISO) Environmental Management System delivering environmental assessments and securing planning approval for Sydney Water s $600 million capital works program working with the NSW Government to implement and review the Metro Water Plan. Peter Mills, General Manager Human Resources BA (Psych) Peter was appointed General Manager Human Resources in July Peter is responsible for providing advice on human resources, as well as strategies to create an equitable and rewarding work environment. Human Resources major achievements during include: roll-out of the Leadership Framework, an initiative to develop leadership capability at Sydney Water; the Leadership Framework sets the context for managers to deliver consistent leadership using Sydney Water s key behaviours continued recognition of Sydney Water s industry leadership in human resources through winning four HR Leader Compass Awards continued commitment and development of Sydney Water s employment brand received endorsement in the inaugural Dream Employers Survey in October, where Sydney Water was recognised as one of the top 10 organisations to work for in Australia and New Zealand. Kaia Hodge, Acting General Manager Sustainability and Regulation BSc (Hons), MEnvStud, PGDipManagement Kaia was appointed Acting General Manager Sustainability and Regulation in June Before this, Kaia was Stormwater Manager, Asset Management Division. Before Kaia s appointment, senior staff rotated to act in the position of General Manager. 19

15 Sydney Water Annual Report 2011 Colin Nicholson, General Manager Operations BSc, BE (Civil) (Hons), MEngSc Colin was appointed General Manager Operations in October Colin is responsible for integrating, monitoring and analysing products and systems, including treatment facilities and networks. He also manages corporate programs such as compliance reporting, energy management, emergency management and security. Operations major achievements during include: full compliance with drinking water and recycled water requirements effective integration of the desalination plant into the water system provision of an additional 50 million litres a day of recycled water from the St Marys Water Recycling Plant continued good performance for Sydney Water s wastewater networks and treatment plants nine cogeneration plants and three hydroelectric plants working to produce up to 20% of Sydney Water s total electricity requirements from renewable energy improvement of efficiency and reliability of operational processes, systems and assets. Ian Payne, General Manager Asset Solutions BE (Civil), MEngSc, MBA Ian was appointed General Manager Asset Solutions in April Ian is responsible for finding innovative and cost-effective ways to deliver infrastructure and procure goods and services for Sydney Water. In particular, he is responsible for the delivery of Sydney Water s large capital program. Alan Ramsey, Chief Financial Officer and General Manager Finance and Regulatory BEc Alan was appointed General Manager Finance and Regulatory in July Alan is responsible for providing financial, economic and performance analysis and reporting throughout Sydney Water. He coordinates reporting to shareholders, regulatory oversight bodies and other external stakeholders. Finance and Regulatory s major achievements during include: completing the sale of Sydney Water s subsidiary in Thailand, AWT International (Thailand) Limited to local Thai interests arranging the gazettal of Sydney Water s subsidiary, Sydney Desalination Plant Pty Ltd (SDP) as a monopoly supplier under the Water Industry Competition Act 2006; this included the referral of SDP to the NSW Independent Pricing and Regulatory Tribunal (IPART) for determination of prices for desalinated water managing SDP s submission to IPART and providing necessary information to assist IPART in making its determination managing Sydney Water s credit rating review, which maintained the current credit rating negotiating a 10-year extension of Sydney Water s long-term contract for water filtration services from the Macarthur Water Treatment Plant and beginning similar negotiations with the owners of the Prospect plant overseeing Sydney Water s input to the Australian Productivity Commission s review of the national urban water market. Asset Solutions major achievements in include: delivering 95% of project milestones on time reducing customer complaints by 30% achieving efficiencies of $20 million on a $458 million budget improving safety on construction sites with the lost-time injury frequency rate down to 1.7 establishing a forum for contractors to find new ways to make sites safer overseeing a major review into the procurement of services contracts totalling $700 million a year. 20

16 At a glance Angela Tsoukatos, General Manager Customer and Community Relations BSocWk, MM, GAICD Angela was appointed General Manager Customer and Community Relations in April Angela is responsible for: driving a customer focus across Sydney Water managing Sydney Water s relationship with customers from connections and customer accounts to helping those experiencing hardship communicating with customers and staff building relationships with stakeholders and communities affected by major projects. Customer and Community Relations major achievements during include: achieving a customer service rating of 7.5/10 resolving 95% of customer issues at the first point of contact establishing a specialist case management team to improve management of complaints and time-consuming customer issues introducing relationship managers for major business customers to provide a single point of contact for customers incorporating a modern, new Customer Management System to improve information management and customer interactions opening the Water Recycling Education Centre at St Marys Water Recycling Plant. 21

17 Sydney Water Annual Report 2011 Stakeholders Sydney Water s stakeholders are those who are impacted by our operations, have influence over what we do or have an interest in what we do. Table 1 Stakeholder engagement Stakeholder category Customers Government and regulators Business and delivery partners Media Advocacy and representative groups Goal for effective stakeholder engagement Understand what s important to customers and ways to improve our services. Provide accurate and timely performance information and robust analysis of relative costs and benefits. Ensure tendering for major contracts drives efficiencies and innovation. Provide accurate, relevant and timely information to the community via traditional and social media. Liaise with peak advocacy groups to ensure that all customers have affordable access to essential water and wastewater services. Evidence of stakeholder engagement in Regular independent surveys provide feedback on performance and what customers value. Quarterly meetings with the Customer Council and the Business Customer Forum enable us to listen to customers issues and needs. Feedback from staff, especially relationship managers and other frontline staff including Contact Centre and Maintenance and Community Services personnel; speaker program analysis of issues raised by customers through social media; speaking engagements; feedback from the Ombudsman and discussions with other water utilities. Regulatory reviews in included: Operating Licence Reporting Manual performance indicators Sydney Water Management Licence (for Manly Dam, Botany Wetland and to extract water from the Hawkesbury-Nepean River before treating it at Richmond Water Filtration Plant) Productivity Commission Urban Water Study submission. Achieved best practice in procurement for strategy, tendering and governance in an independent survey of suppliers, which is done every two years. Following a number of external reviews, Sydney Water was found to be a mature procurement organisation, with many advanced practices including industry engagement. Won a number of national awards for excellence in government partnerships, environmental and project management, and the use of innovative technologies and techniques. Available to the media 24 hours a day, seven days a week via a media hotline. Held media conferences for major events including the opening of the St Marys Water Recycling Plant and Water Recycling Education Centre. Issued media releases announcing upgrades to and development of the water and wastewater network. Benchmarked our hardship program against various water and energy utilities to build an industry best practice model. Worked with the Customer Council to develop new approaches for working with customers in financial difficulty. 22

18 At a glance Stakeholder category Suppliers Other utilities Research and education groups Sponsorship and community investment Staff Goal for effective stakeholder engagement Ensure market competition through fair and efficient procurement. Work with other utilities to share information and to collaborate on research. Maintain access to national and international expertise to identify and respond to emerging issues. Support a broad range of organisations in our area of operations with a focus on the community, youth and the environment. Develop a safe, capable and committed workforce. Evidence of stakeholder engagement in Surveys are done every two years the last in showed supplier satisfaction with the procurement process was 77%. Member of the Water Service Association of Australia, including the: Asset Management and Environment and Sustainability Committees Water Quality and Health Committee. Actively contributed to Australian Water Association as Board member and NSW Branch President. Worked with the Bureau of Meteorology and 260 water authorities around Australia to compile the country s first national database of water information. Actively contributed to the US-based Water Research Foundation, as a Board member, and the Water Reuse Association, as Australian Division Vice Chair. Contributed regularly to national and international conferences, forums and journals. Subscribed to a number of major national and international water industry research collaborations including Water Research Foundation and Water and Environment Research Foundation. Sydney Water is one of 375 organisations from the US, Europe and Australia, which are members of the Water and Environment Research Foundation. A major focus for the Foundation is research on wastewater collection systems and treatment processes. Invested over $790,000 in partnering nine key national and international research alliances. Continued work on the Climate Change Adaptation Program, including infrastructure protection modelling and analysis with the Attorney General s Department and regional climate modelling with the Office of Environment and Heritage. Gave over $1 million to over 50 organisations as part of our Community Investment Program. Worked with the Powerhouse Museum to develop an interactive water exhibit as part of the EcoLogic: creating a sustainable future exhibition. Donated $160,000 to programs assisting people in financial hardship. Increased scores in engagement in the annual Your Say staff survey. Developed leadership capability by rolling out a Leadership Framework. Continued to implement competency programs across Sydney Water. Donated over $247,000 to charities chosen by staff, as they met safety targets. Voted as one of the top 10 organisations to work for in Australia and New Zealand in the Dream Employers Survey. Recognised 52 staff for 40 years service and 62 staff for 30 years service. 23

19 Sydney Water Annual Report 2011 Sustainability framework Sydney Water delivers essential and sustainable water services for the benefit of the community. We apply sustainability principles to business processes that guide planning and operations, project assessment, workforce development and management, and capital investment decision-making. The following framework sets out Sydney Water s commitment to and understanding of the principles of environmental excellence, social responsibility and economic sustainability, underpinned by good governance. Environmental excellence Sydney Water takes responsibility for its impact on the environment, with ongoing benefit to our customers, staff and communities. To know more, visit the Wastewater treatment system discharges, Breaches of statutory instruments, Environmental performance monitoring, Trade waste agreements, Environmental Footprint, Energy Use, By-products, Waste Minimisation and Flora, fauna and heritage sections of this report. Sustainability principles Social responsibility Customers drive our business. We aim to be an employer of choice. To know more, visit the Stakeholders, Customer satisfaction, Social Assistance, Service quality and system performance, Water quality, Customer satisfaction with water, Safety, Capability, Key behaviours, Work-life balance and Staff Engagement sections of this report. Economic sustainability We balance our responsibility to protect public health and the environment with affordable services and shareholder returns. To know more, visit the Reuse and Recycling, Water leakage, Water efficiency, Water drawn, Profitability, Debt Servicing, Return on assets and equity, Infrastructure management and Financials sections of this report. Good governance Our business is managed openly and with accountability, and all staff are required to work following our key behaviours. To know more, visit the Corporate governance section of this report. Sydney Water s corporate goals integrate the social, economic and environmental aspects of our commitment to deliver sustainable water services. The, Sydney Water s sustainability performance measurement and yearly reporting framework, adopts these goals and measures performance through our sustainability indicators. Sydney Water maps its Annual Report against the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines and adopts the GRI principles for reporting. These include transparency, inclusiveness, auditability, completeness, relevance, sustainability context, accuracy, neutrality, comparability, clarity and timeliness. Independent auditors verify the Annual Report against these principles. Further information about Sydney Water s sustainability projects and initiatives is available on Sydney Water s website, sydneywater.com.au 24

20 Operations Map 1: Area of operations At a glance Sydney Water s area (Legislated Local Government Areas) About 12,700 sq km Colo Heights Wisemans Ferry Gosford Lithgow Kurrajong Heights Windsor Broken Bay Palm Beach Katoomba Blacktown Parramatta Liverpool Hornsby Manly Port Jackson Sydney Botany Bay Sutherland Nattai National Park Oakdale Campbelltown Otford Bargo Wollongong Lake Illawarra Kiama Area of operations about 12,700 sq km Water delivery system about 3,200 sq km Wastewater catchment system about 2,000 sq km Stormwater catchment system about 300 sq km Source/Graphics: Sydney Water, Asset Management Scale in kilometres 25

21 Sydney Water Annual Report 2011 Map 2: Water delivery system Note: Click on the map below to find out more about our water delivery system. Water delivery Wisemans Ferry Gosford Kurrajong Heights North Richmond Windsor Broken Bay Palm Beach Katoomba Cascade Blacktown Hornsby Orchard Hills Prospect Parramatta Manly Port Jackson Sydney Warragamba Liverpool Sutherland Botany Bay Kurnell Nattai National Park Campbelltown Woronora Oakdale Macarthur Otford Bargo Nepean Wollongong Water Filtration filtration plant Plant Desalination Plant plant Delivery Systems Cascade Illawarra Macarthur Nepean North Richmond Orchard Hills Potts Hill Prospect East Prospect North Prospect South Prospect Transfer Ryde Warragamba Woronora Illawarra Lake Illawarra Kiama Scale in kilometres 26

22 At a glance Map 3: Wastewater systems Note: Click on the map below to find out more about our wastewater systems. Wastewater systems Wisemans Ferry Gosford Katoomba Kurrajong Heights Broken North Brooklyn Bay Richmond Windsor Palm Richmond Rouse Beach Hill Hornsby Riverstone Heights Warriewood Winmalee St Marys West Castle Hill Hornsby Heights Blacktown Hornsby Penrith Quakers Hill Manly Parramatta North Head Port Jackson Wallacia Fairfield Sydney Bondi Liverpool Liverpool Glenfield* Botany Bay Malabar Nattai National Park West Camden Campbelltown Sutherland Cronulla Oakdale Picton Otford Wastewater treatment plant Water recycling plant Wastewater systems Bombo Bondi Brooklyn Castle Hill Cronulla Gerringong / Gerroa Liverpool Hornsby Heights North Richmond North Head Penrith Picton Quakers Hill Richmond Riverstone Rouse Hill Shellharbour Malabar St. Marys (2) Wallacia Warriewood West Camden West Hornsby Heights Winmalee Wollongong * After Rose Hill on-line Bargo Bellambi Wollongong Wollongong Port Kembla Lake Illawarra Shellharbour Bombo Kiama Gerringong/Gerroa Scale in kilometres 27

23 Sydney Water Annual Report 2011 Map 4: Stormwater catchment Stormwater catchment Broken Bay Windsor Palm Beach Hornsby Blacktown Parramatta Manly Port Jackson Sydney Liverpool Botany Bay Sutherland Stormwater catchment Scale in kilometres Otford 28

24 At a glance Table 2 Principal statistics Water services 4.6 million people Sydney Water supplies water, wastewater, recycled water and some stormwater services to over 4.6 million people in Sydney, the Illawarra and the Blue Mountains. Sydney Water is Australia s largest water utility. 492,167 million litres a year Sydney Water supplies 492,167 million litres of water to over 1.7 million homes and businesses every year. Households used 72% of the water supplied, while businesses used 28%. Privately owned filtration plants, operated under contract to Sydney Water, treat most of the water. Several other plants owned by Sydney Water treat the rest. The desalination plant supplied 16% of Sydney s water supply, with 64% from Prospect water filtration plant and about 20% from the other water filtration plants. Treated water is distributed to customers via a network of about 21,069 km of water pipes, 269 reservoirs and 177 pumping stations. The system is operated using centralised computer control systems. Recycled water 47,521 million litres a year Sydney Water recycles about 47,521 million litres of wastewater a year. There are a number of water recycling schemes in place that reduce demand on water supplies and reduce discharges of wastewater. There are 501 km of recycled water mains, and the amount of recycled water is increasing. Recycled water is treated to standards suitable for its intended use. Wastewater services 509,435 million litres a year Sydney Water collects and treats over 509,435 million litres of wastewater a year from about 4,476,600 customers. The wastewater network includes about 24,193 km of wastewater pipes and 675 wastewater pumping stations. There are 24 separate wastewater systems licensed by the Office of Environment and Heritage. Sydney Water transports wastewater to 16 wastewater treatment plants and 14 water recycling plants. After treatment, wastewater is reused or discharged to rivers or the ocean under licence conditions related to the receiving environment. Inland plants discharging to the rivers treat waste to high levels. Three of the treatment plants are storm wastewater treatment plants (Fairfield, Bellambi and Port Kembla), which are used only during major storms. Sydney Water beneficially uses 100% of captured biosolids in agriculture, composting or land rehabilitation, and more than 90% of captured grit and screenings. Stormwater services 447 km of channels Most stormwater channels and drains are the direct responsibility of local councils. Sydney Water manages 447 km of stormwater channels and conduits mainly in south and south-west Sydney, as well as Sydney Water drainage areas at Rouse Hill. 29

25 Sydney Water Annual Report 2011 Table 3 Principal statistics at 30 June 2011 Indicators 2011 Unit Estimated population serviced by drinking water 4,580,780 people Estimated population serviced by wastewater 4,476,600 people Estimated population serviced by recycled water # 67,970 people Length of drinking water mains owned and operated by Sydney Water* 21,069 kilometres Length of recycled water mains* 501 kilometres Length of wastewater mains owned and operated by Sydney Water* 24,193 kilometres Number of wastewater treatment plants 16 wastewater treatment plants (WWTP) Number of water recycling plants 14 water recycling plants (WRP) Number of reservoirs in service 269 reservoirs Number of water pumping stations in service 177 water pumping stations Number of wastewater pumping stations in service 675 wastewater pumping stations Number of wastewater systems 24 wastewater systems Quantity of recycled water supplied 47,521 million litres Quantity of drinking water supplied 492,167 million litres Amount of water sourced from desalination 77,102 million litres Daily amount of water recycled 130 million litres/day Wastewater collected (includes discharge and bypass) 509,435 million litres Properties with stormwater drainage available 506,742 properties Properties with water service available 1,792,837 properties Properties with wastewater service available 1,744,843 properties Stormwater channels under Sydney Water control 447 kilometres Area of operations (approximate) 12,700 square kilometres #The numbers presented last year for recycled water were projections based on the Australian Bureau of Statistics preliminary estimated resident population for June *Results reflect most recent data at time of reporting. Increase in length of stormwater channels from 440 km in 2010 to 447 km in 2011 is due to: 1: addition of missing open channel stormwater data in Hydra (1.10 km) 2: acquiring stormwater channel through sewer separation (5.73 km) 3: adopting stormwater channels from developers (0.17 km). 30

26 Financial highlights At a glance Figure 1: Total income ($2.3 billion) Sydney Water s total income for was $2.3 billion, $119 million (5.4%) higher than in This was mostly from a combination of higher water sales and higher prices determined by the Independent Pricing and Regulatory Tribunal. Figure 2: Total core operating expenditure ($1.1 billion) Total core operating expenditure of $1.1 billion was $44 million (4.1%) higher than in This was driven by higher costs for contractors and electricity. Figure 3: Total asset investment ($636 million) Asset investment included replacement or rehabilitation of water and wastewater pipelines, renewals at water and wastewater treatment plants, programs to provide for growth in existing areas and the north-west and south-west of Sydney, and government programs, including completion of the Replacement Flows Project at St Marys (part of the Western Sydney Recycled Water Initiative). 31

27 Sydney Water Annual Report 2011 Profit after tax for , of $274 million, was $172 million lower than in , mostly due to higher borrowing costs and asset charges. Gearing (debt/debt plus equity) has stabilised with lower capital expenditure than in previous years with the completion of several major projects, including desalination and recycling. Capital expenditure in (excluding capitalised interest) included continued major investment in core water and wastewater assets for reliability and growth. Expenditure is lower than in previous years due to the completion of major projects, including the desalination plant. 32