Annual Report 2011 - Watercare

Watercare Services Limited
2011 ANNUAL REPORT
Chairman’s
Report
“Water is Watercare’s business and with the early
knowledge of efficiency gains available through
integration, the company was able to deliver
lower water prices.”
Chairman’s report
PAGE 6
On behalf of all my colleagues, I am pleased
to be able to report a very successful
year of transition for Watercare from a
wholesale water provider and wastewater
service deliverer to that of a fully-integrated
wholesale and retail service provider across
the Auckland region.
Watercare now supplies over 124 billion litres
of water per year to 425,550 households
and businesses through a network of 84
reservoirs, 90 pump stations and 8,825
kilometres of water pipes. The figures on
wastewater are equally significant – 537
wastewater pumping stations, 7,693
kilometres of sewers and 162,500 manholes.
This is a large business and network.
In any given day, Watercare issues 6,000
bills. Capital works in progress total $800
million and the asset base is now valued
at $7.8 billion.
The company and its people have a notable
responsibility in serving Aucklanders and are
committed to working with the shareholder
to do this.
Water is Watercare’s business and with the
early knowledge of efficiency gains available
through integration, the company was able
to deliver lower water prices. The announced
retail price of $1.30 per 1,000 litres (including
GST) is approximately 15 per cent lower than
the previous regional average, and in some
cases significantly cheaper. In parts of rural
Rodney, for example, the price paid for water
decreased by more than 60 per cent. The key,
uniting point is that the single region-wide
tariff forms a sustainable base for future
water pricing by Watercare.
Our next significant forward pricing challenge
is wastewater. Currently, the charging
methodologies vary significantly from one
former council area to another and in some
parts of the region the revenue is collected
on Watercare’s behalf by the Auckland
Council. Watercare is responsible for setting
the wastewater charges that will apply from
1 July 2012 and has undertaken work with
councillors representing a population base
of 1.3 million people to establish an
equitable basis for future charging.
Following the challenges of integration it was
necessary to consolidate the new company –
two-and-a-half times its previous size – into
a customer-focused organisation operating
in the all-new world of retail supply and
I endorse the work management has done
in this regard. The Auditor-General issued
a report in August 2011, Planning to Meet
the Forecast Demand for Drinking Water
in Auckland, which was very positive.
The Auditor-General concluded:
“Overall, we are pleased with the progress that
Watercare has made in managing its extended
responsibilities. The transition appears to be
going relatively smoothly for customers, and
Watercare seems committed to improving
its service to customers. Watercare is making
solid progress in its long-term planning for
managing future demand, asset management,
and funding and pricing. It should complete all
of these plans by 2012.”
Among the major strategic initiatives that
will occur in the coming year are:
• A commitment to achieving an ongoing
water supply improvement programme
for the non-metropolitan areas, where the
assets inherited through integration were
not all of the required standard;
• An upgrade of the capacity of the Waikato
Water Treatment Plant, where piling and
clarifier construction will be undertaken this
summer, with a membrane plant extension
completed in the following year;
• The plan to rehabilitate Puketutu Island,
adjacent to the Mangere Wastewater
Treatment Plant, with treated biosolids.
This project will see the island become
a public open space for the enjoyment
and benefit of all Aucklanders;
• Upgrades of rural wastewater plants that
were inherited through integration; and
• Continued progress on the Hunua
No. 4 watermain project , the construction
and installation of approximately 35
kilometres of watermain from Manukau
to central Auckland which ensures secure
supply to an expanding Auckland population.
It is important that I record my thanks to the
Watercare staff, our shareholder, suppliers and
business partners for facilitating stable platforms
for transition, and I reinforce our ongoing
commitment to providing outstanding and
affordable services for the people of Auckland.
I also want to acknowledge the stewardship
and dedication to meet required objectives of
my predecessor Graeme Hawkins who chaired
Watercare between December 2002 and his
retirement in December 2010, and also former
Deputy Chairman Ian Parton who stepped into
the role of Interim Chief Executive through the
period of transition.
Finally, my Board were delighted to complete
the appointment of Mark Ford as Chief
Executive of the expanded Watercare effective
from January 2011. Mark’s clarity of vision,
strong leadership and considerable experience
in the sector have enabled Watercare’s
momentum and delivery of service objectives
to be demonstrated from an early day.
Ross B Keenan
Chairman
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