<strong>Watercare</strong> Services Limited <strong>2011</strong> ANNUAL REPORT Chairman’s <strong>Report</strong> “Water is <strong>Watercare</strong>’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 <strong>Watercare</strong> from a wholesale water provider and wastewater service deliverer to that of a fully-integrated wholesale and retail service provider across the Auckland region. <strong>Watercare</strong> 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, <strong>Watercare</strong> 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 <strong>Watercare</strong>’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 <strong>Watercare</strong>. 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 <strong>Watercare</strong>’s behalf by the Auckland Council. <strong>Watercare</strong> 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 <strong>2011</strong>, 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 <strong>Watercare</strong> has made in managing its extended responsibilities. The transition appears to be going relatively smoothly for customers, and <strong>Watercare</strong> seems committed to improving its service to customers. <strong>Watercare</strong> 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 <strong>Watercare</strong> 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 <strong>Watercare</strong> 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 <strong>Watercare</strong> effective from January <strong>2011</strong>. Mark’s clarity of vision, strong leadership and considerable experience in the sector have enabled <strong>Watercare</strong>’s momentum and delivery of service objectives to be demonstrated from an early day. Ross B Keenan Chairman Return to Contents page
<strong>Watercare</strong> Services Limited <strong>2011</strong> ANNUAL REPORT Cosseys Dam is one of five dams in the Hunua Ranges. Originally built in 1955, its embankment was rebuilt between 2001 and 2004 as part of a major upgrade project. PAGE 7 Return to contents Contents page
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