2008/09 annual report 19 October 2009
The Honourable Stephen Robertson MP Minister for Natural Resources, Mines and Energy GPO Box 2454 Brisbane Qld 4001
The Honourable Andrew Fraser MP Treasurer GPO Box 611 Brisbane Qld 4001
Dear Ministers
I am pleased to present the Annual Report 2008-09 for WaterSecure.
I certify that this annual report complies with: • the prescribed requirements of the Financial Administration and Audit Act 1977 and the Financial Management Standard 1997, and • the detailed requirements set out in the Annual Reporting Guidelines for Queensland Government Agencies. A checklist outlining the annual reporting requirements can be accessed at page 44 of the report.
Yours sincerely
Keith Davies Chief Executive Officer WaterSecure Contents
Highlights
Our business
About WaterSecure Chair’s report CEO’s report Organisational structure Board of directors Executive Management Team Priorities for 2010
How to comment on this annual report Our performance – what we delivered We value your comments on our annual report and any other matters relating to WaterSecure. Please contact us by: Western Corridor Recycled Water Project Gold Coast Desalination Project M: Level 2, 95 North Quay Brisbane Qld 4000 T: 1800 997 464 Alignment with Queensland E: info@watersecure.com.au Government Priorities W: www.watersecure.com.au How we measure performance
Copies of this annual report Efficiency and effectiveness You can obtain copies of this annual report by contacting WaterSecure or by downloading the report from our website www.watersecure.com.au. Lessons learned
ISSN 1837-0446 (Print) Our people ISSN 1837-0454 (Online) Corporate Governance
Interpreter service Summary of financial position and performance The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse Glossary backgrounds. If you have difficulty understanding this annual report, you can contact us on 1800 997 464 and we will arrange an interpreter to help you understand the parts of this report causing difficulty. Annual report checklist
© State of Queensland (WaterSecure) 2009 Financial report (see CD attached to this report)
WaterSecure Annual Report 2008-09 1 2008-09 highlights
Financial highlights Western Corridor Recycled Water Project
WaterSecure revenue by source WCRW Project met regulation dates and completed under budget 75.1% 23.6% More than 7.3 million hours worked Water Grid Manager Pipeline Construction Lost time injury (LTI) rate of only 2.21, below 1.0% 0.4% industry averages Other revenue Interest Income 20.4 billion litres of purified recycled water supplied to Swanbank and Tarong power stations Interim Water Quality Report shows Bundamba Advanced Water Treatment Plant consistently produced water to meet the Public Health Regulation guidelines throughout testing period (May-December 2008) Environmental benefits – the amount of nitrogen and phosphorus that would otherwise have been discharged into the Brisbane River from wastewater treatment plants feeding Bundamba AWTP reduced by approximately 35 per cent and WaterSecure source of funding ($M) 90 per cent respectively 359.6 Winner of 12 international, national and state Equity Injection awards, and finalist in further three national awards 403.3 Gold Coast Desalination Project National Water commission 2,630.1 First Water supplied to SEQ Water Grid in Qld Treasury Corporation February 2009 More than 4.3 million hours worked LTI rate of only 1.16, well below industry averages 4.2 billion litres of desalinated water supplied to the SEQ Water Grid Network Integration Pipeline completed and handed over to LinkWater Winner of 2009 Membrane Desalination Plant of the Year – Global Water Intelligence
2 WaterSecure Annual Report 2008-09 Cost vs budget
3.000 Final Budget forecast Expenses 2.500 cost to date 2.000 Final Expenses $ Billion forecast 1.500 Budget cost to 1.000 date 0.500 WCRW Project GCD Project
WaterSecure Annual Report 2008-09 3 Our business
About WaterSecure The combined production capacity of WaterSecure’s assets is up to 365 megalitres a day; the Western Corridor Recycled Water Project has the capacity to Legislative basis supply up to 232 megalitres of purified recycled water WaterSecure is the trading name of the Queensland a day and the Gold Coast Desalination Plant’s capacity Manufactured Water Authority, a Queensland is 133 megalitres of desalinated water a day. Government statutory authority established under the South East Queensland Water (Restructuring) Act 2007. Purified recycled water is supplied to Swanbank and Tarong power stations and will be supplied to future The purpose of this legislation is to facilitate a industrial and agricultural customers and, when the restructure of the water industry in South East region’s combined dam levels fall below 40 per cent Queensland to deliver: and the necessary government approvals are in place, will supplement drinking water supplies in Wivenhoe improved regional coordination and management Dam. Desalinated water is supplied directly into the SEQ of water supply Water Grid. It is blended with dam water and piped to more efficient delivery of water services customers in parts of the Gold Coast and Brisbane.
enhanced customer service for water consumers Vision, mission and values
a clearer accountability framework for water Our vision supply security. We are a customer-focussed world leader in sustainable, large-scale, purified water supplies. Role and functions Our mission WaterSecure is responsible for producing and WaterSecure’s mission is: supplying purified recycled water and desalinated water to the South East Queensland Water Grid. to substantially enhance the security of water supplies
On 1 September 2008, WaterSecure became the sole to manage and improve the environmental shareholder of Western Corridor Recycled Water Pty footprint of our business Ltd and acquired a 50 per cent share in South East Queensland (Gold Coast) Desalination Company. to inform, influence and participate in the ongoing The remaining half was acquired on 1 October 2008, development of associated water industries. making WaterSecure the sole shareholder.
WaterSecure’s water supply system includes more than 200 kilometres of large-diameter underground pipeline, three advanced water treatment plants located at Bundamba, Luggage Point and Gibson Island and a reverse osmosis desalination plant at Tugun on the Gold Coast.
4 WaterSecure Annual Report 2008-09 Our values Respect - WaterSecure staff respect each other, WaterSecure works together as one team, guided by the community and the environment in which we our SPIRIT values: operate. We will always protect and seek to enhance our environment. Safety is WaterSecure’s number one value and is broader than workplace health and safety. WaterSecure Innovation - We seek continuous improvement is committed to providing water supplies that always by challenging our thinking and that of others, meet and aim to exceed the water quality, safety encouraging our team to think innovatively. and environmental regulatory requirements through Teamwork - We understand that the power of the the provision of safe work places and the effective team exceeds the power of any individual and will management of water supply infrastructure. partner for the benefit of stakeholders. People - WaterSecure is committed to supporting and developing its people.
Integrity - WaterSecure is open and honest to earn and maintain the support and trust of all stakeholders.
WaterSecure Annual Report 2008-09 5 David Gray Chair
Chair’s Report Not only are these projects a vital part of the solution to our water issues but they are reaping benefits I am pleased to present the annual report for the first for the environment as well. Our advanced water full year of operation of WaterSecure, the Queensland treatment process removes nutrients which would state authority incorporating Western Corridor otherwise have been deposited into the Brisbane River, Recycled Water and SureSmart Water. minimising environmental impacts and improving water quality in the Brisbane River and Moreton Bay. WaterSecure, the Queensland Manufactured Water Our work in this area was recognised this year with the Authority, began operation on 1 July 2008 as the Western Corridor Recycled Water Project winning the Queensland state authority charged with producing and 2009 Healthy Waterways Industry Award. supplying purified recycled water and desalinated water. With assets totalling more than $3.7 billion, WaterSecure The significance of both assets to the global water is an integral part of the South East Queensland Water industry is evidenced by the strong attention the Grid and is supplying a new source of pure water to the projects continue to attract both nationally and region through the Western Corridor Recycled Water internationally. This year has seen interest from Project and the Gold Coast Desalination Plant. industry, educational, government and general groups as far flung as Abu Dhabi and Japan and we It’s been an exciting year for WaterSecure as we have take seriously our obligation to educate the wider achieved major milestones across both projects. The community on water issues. We will continue to build projects have not been without their challenges, as on our community engagement role to build the any large-scale project built under pressure is. The public’s confidence in the quality of our water. combined efforts of all staff who have worked on the schemes have resulted in world-class infrastructure Together with my fellow board members I would like being delivered under extraordinary time pressures, to take this opportunity to thank our CEO Keith Davies, within budget and with an outstanding safety record. the Executive Management Team and all staff for their extraordinary efforts and dedication in bringing these Our core business of providing pure, quality water projects to fruition. to South East Queensland remains our focus. The past year has seen the South East Queensland region experience some good fortune with weather patterns, as increased rainfall has topped up our dams. However, we cannot forget how quickly this situation can change and must take into account the unpredictable and unreliable nature of weather conditions, especially David Gray in times of a changing climate. Both Western Corridor Chair Recycled Water and the Gold Coast Desalination Plant are helping safeguard against future water shortages now, and for the future.
6 WaterSecure Annual Report 2008-09 The combined efforts of all staff who have worked on the schemes have resulted in world-class infrastructure.
WaterSecure Annual Report 2008-09 7 Keith Davies Chief Executive Officer
CEO’s report Major construction activities on the Gold Coast Desalination Plant have also been completed in the What a year it has been for WaterSecure. Since past year, and the facility has now completed its coming into existence on 1 July we have completed commissioning requirements. Water produced by the construction of both our desalination plant and plant has been supplied to the grid since February, recycled water scheme, which are now proving to be having a direct impact on the availability of water in world leaders in the water industry. the region. The results have already been pleasing, with more than 4.6 billion litres of desalinated water We have also brought together the two companies supplied into the South East Queensland Water Grid under the WaterSecure banner, providing us with a fresh and almost 21 billion litres of purified recycled water start and the opportunity to shape the organisation’s supplied to Tarong and Swanbank power stations by culture and future directions. We remain focused on the 30 June 2008. needs of our customers and stakeholders and I believe we have built a team that is committed to what the With our construction challenges now largely organisation stands for and will deliver. behind us, we turn our attention to operations and the complexities inherent in running such large- The challenging deadlines and regulation dates set scale facilities with ever-changing developments for the two projects required an enormous amount of in technology and an emerging regulatory market. effort, energy and innovation from all parties involved Managing their output in the face of changing and I acknowledge and thank our Alliance partners climate conditions is another challenge for us, and for the integral role they have played in fulfilling our we must be prepared to respond to those changes regulatory requirements. as necessary. Working with the Water Grid Manager to identify new customers for our purified water Major construction activities on the Western Corridor to reduce their dependence on traditional water Recycled Water Project were completed in December supplies will be a focus. 2008, just two and a half years from the starting point and halving the normal construction time for a project We are committed to strengthening our position as of its complexity and size. While the purified recycled a key player in the water industry by staying relevant water being produced won’t be added to the dam until through our research and development activities, the levels reach the 40 per cent trigger, the scheme is which we intend on expanding in the coming year supplying Swanbank and Tarong power stations, two through the new National Centre of Excellence in of the region’s major water users, easing pressure on Water Recycling. Western Corridor Recycled Water has our dams and helping ensure we are not in the same been chosen to host this federally funded initiative position we were in just over two years ago when dam which will allow us, along with our partners, to build levels were at record lows.
8 WaterSecure Annual Report 2008-09 the knowledge and technology required to secure Between the two projects, we have now won Australia’s future water supplies through alternative 12 prestigious awards – seven international, two sources such as water recycling. In addition to research national and three state – and been a finalist in and development activities, the Centre will drive a another three national awards. national focus on addressing rural and urban water recycling to promote acceptance and application Already the two projects have achieved so much, of alternative water sources in all areas of Australian and as I look to the year ahead I am excited by the society. We are also keen to play our part in helping opportunities that exist for WaterSecure. This year address the current skills shortage that exists in the we expect to finalise the remaining technical and water industry and will proactively seek out ways to commercial issues at Gibson Island and Luggage Point do so. We are very excited about the opportunities the Advanced Water Treatment Plants and the Gold Coast Centre offers and we look forward to working with our Desalination Plant, signifying final handover of these many partners from industry and academia to position assets to WaterSecure. We will continue to work on Australia as a leader in water recycling. building relationships with our stakeholders and the community, as well as potential customers for our Both Western Corridor and the Gold Coast Desalination water, further easing pressure on the dams, and we Plant continue to be recognised on the world stage for stand ready to supply to the water grid when required. their world-leading design and technology, and the Our focus remains unchanged, and that is to continue results they are achieving. to provide environmentally sustainable sources of water of consistently high quality to the people of In the past 12 months our projects have received the South East Queensland. following accolades:
2009 Membrane Desalination Plant of the Year for the Gold Coast Desalination Plant and 2009 Water Reuse Project of the Year for Stages 2A & 2B of Western Corridor Recycled Water Project at the Global Water Intelligence Awards Keith Davies Western Corridor Recycled Water 2009 – Healthy Chief Executive Officer Waterways Arup Industry Award
Bundamba Advanced Water Treatment Plant – Construction Management Association of America Project Achievement Awards, International Project of the Year
Bundamba Advanced Water Treatment Plant – Engineers Australia Engineering Excellence Environment Award.
WaterSecure Annual Report 2008-09 9 Our board
The WaterSecure Board of Directors as at 30 June 2009 is:
David Gray (Chair) Minister for Natural Resources, Mines and Energy Queensland Treasurer David has significant commercial expertise having held a number of senior management positions including Managing Director at Boeing Australia, Chief
Water Quality Executive Officer of GEC Heavy Engineering and Audit and Risk and Asset General Manager of telecommunications company Board Committee Management Exicom. Committee Recognised with the Centenary Medal for services to the Aviation Industry, David was also awarded an Honorary Doctorate from Queensland University of Technology.
Chief Mark Pascoe Executive Officer Mark has more than 30 years experience in the water industry, including his current role as CEO of the International WaterCentre Chief Chief Chief Chief Corporate Financial Operations Technical - the business centre for Officer Officer Officer Officer building international capacity in integrated water management.
Mark’s career history also includes working for Brisbane City Council, environmental engineering consultancy Woodward-Clyde, and the International Water Association in London. He is a former President of the Australian Water Association and is current President of the Australian Water Partnership, indicating his renowned water industry expertise.
10 WaterSecure Annual Report 2008-09 David McDougall Stephen is a Fellow of four professional associations and a member of the Australian Institute of Company David has more than 30 Directors. Stephen’s current responsibilities include years experience in project being a Director of Mackay Ports Ltd and an and structured finance, independent Member of the Corporate Governance mergers and acquisitions, Advisory Board of the Department of Primary Industries valuations, capital raising and Fisheries and providing strategic advice to Governments and corporations. Scott Standen David’s work as a Partner of KPMG and a Director of A partner at Hynes Lawyers, KPMG Corporate Finance and a Director of a major Scott has significant investor Australian investment bank, has assisted in skilling him relations experience having in the areas of domestic and international corporate worked on the ASX listings finance, strategy and structure. for Coppermoly Limited and With a Masters of Business Administration, David Billabong. Recently, Scott has experience across a range of industries, has also worked on the acquisition of a number of including natural resources, transport, utilities, businesses in the mining services sector and the listing telecommunications, property, tourism and leisure. of a parent company on the Australian Stock Exchange. David’s significant experience in the natural resources With a Masters of Business Administration and a Master sector includes work for SA Water, CS Energy, Tarong of Laws, Scott brings a unique legal and commercial Energy, and Singapore Power. perspective to business issues.
Stephen Golding Scott has been admitted as a solicitor in the Supreme Courts of Victoria and Queensland and the Australian Stephen’s extensive career High Court. Scott is also a member of the Queensland at the Department of Main Law Society, the Australian Institute of Company Roads included joining as an Directors (AICD) and member of the Gold Coast engineer in 1967 and retiring Working Group of the AICD. as Director-General in 2005.
Paralleling this career, Stephen also enlisted as a private soldier in the Army Reserve in 1963 and retired in 1998 as a major general. He has received a number of awards for his outstanding service to the Army including a Member of the Order of Australia, the Queen’s Silver Jubilee Medal, the Centenary Medal, the Reserve Forces Decoration, the National Medal and the Australian Defence Medal.
WaterSecure Annual Report 2008-09 11 Our Executive Management Team
Keith Davies Sam Romano Chief Executive Officer Chief Financial Officer Keith has more than 30 years Sam has 20 years experience experience in the energy in the finance and and utilities industry in accounting sector. He has the United Kingdom and worked in large private Australia, working for South and public organisations. Wales Electricity and PricewaterhouseCoopers, then Sam has introduced a range of innovative finance Tarong Energy prior to joining us. He began his career policies and procedures resulting in cost savings, an as engineer and has held senior executive positions improved reporting and profit increases. His skills and in retail operations, strategic development, financial experience include strategic planning, budgeting, management and change management. staff management, economic regulation, financial management and accounting frameworks.
Viviann Zavlanos Chief Operating Officer Viviann oversees the operations of our advanced water treatment plants, desalination plant and pipelines that connect purified water to the south-east Queensland water grid. With over 18 years experience in the water industry and leadership skills, Viviann has negotiated operating strategies and agreements between industry partners, state and local government agencies. Prior to joining WaterSecure, Viviann held senior positions managing water supply, sewerage treatment and recycling operations at Melbourne Water.
12 WaterSecure Annual Report 2008-09 Antoinette Carley* Ron Wilson* Chief Corporate Officer Chief Corporate Officer Antoinette oversees Ron draws on extensive corporate governance, and varied commercial risk management and experience, including compliance responsibilities. property management, She draws on more than commercial negotiations 10 years experience in private and public sector and contracts, corporate governance and compliance organisations in infrastructure projects, commercial systems, and board and corporate secretarial practices. contracts, system establishment, board support and Ron also has more than 10 years of valuable public company directorship. sector experience.
Cedric Robillot Chief Technology Officer Cedric has extensive experience in water research, intellectual property and technology. Prior to joining WaterSecure, he worked for 10 years in the biomedical field, co-founding a biotechnology company, Cleveland Biosensors, where he provided technology leadership in the development of new diagnostic platforms and managed the intellectual property portfolio.
*Antoinette Carley resigned from WaterSecure effective 31 July 2009. Ron Wilson has been appointed Chief Corporate Officer.
WaterSecure Annual Report 2008-09 13 Priorities for 2010 It is essential to our business that we strengthen relationships with our existing stakeholders and 2010 holds a number of changes for WaterSecure as final customers, and forge new ones to support our role as construction activities draw to a close and the projects a key player in the South East Queensland Water Grid. move into full operation mode. WaterSecure will continue to work with our primary customer, the South East Queensland Water Grid There is still considerable work to be done in the human Manager, to ensure adherence to protocols and open resources area as consultants finish their work on the communication is achieved. We will particularly focus on projects and are replaced by a permanent workforce. In working with the Water Grid Manager to identify potential addition to head office staff and consultants, there were customers and commence supply where possible. With six Alliances involving 20 organisations working across the machinery of government changes following the the Western Corridor and Desalination projects and the election this year, and the move from construction to shift to permanent staff will not only see a new structure, operations, WaterSecure now works closely with the policies and procedures emerge, but also a shift in culture. Department of Environment and Resource Management We hope to make this transition as seamless as possible, as well as the Department of Infrastructure and capturing the knowledge and experience of the workers Planning, and it is vital that information sharing and moving off the projects for the benefit of those coming in. collaborative working relationships are established with The new organisational structure will see a concentration this department. We must continue to focus on meeting of workers at head office supporting Veolia Water, the the needs of all customers and stakeholders by supplying scheme operator, staff at the plants. It is our intention high-quality, safe and reliable desalinated water and to develop a team culture across sites, offices and purified recycled water. organisations to support our goals of working together in a safety-conscious environment. Through strong leadership incorporating creativity and innovative thinking, we will expand our research Continuing our work in educating the public about the and commercialisation capabilities to develop water benefits of new, alternative water sources is a key priority technologies currently used by our plants. Advances in for WaterSecure in the coming year. We have already been technology will see the plants achieve their targets of active in conducting site tours of our plants for industry having world’s best operational efficiency. The coming groups and are keen to expand this to general interest year will see the desalination plant’s energy consumption groups and school students. Understanding the place fully offset to meet the government’s goal of completely of our water in the water cycle is an important step to offsetting carbon emissions from the plant. These building confidence in the water we produce. Through initiatives will also assist in financial management of the working more closely with our colleagues in the Water plants as they enable integration and synergy across Grid we aim to present an education package that fully the schemes to promote cost savings. Developments in explains the process and informs people on where their technology should be made available to our colleagues water comes from, placing our operations in the normal in the water industry, reinforcing our relevance and value context of the water cycle. and further building relationships within the sector.
14 WaterSecure Annual Report 2008-09 WaterSecure’s 2009-10 operational plan lists five key objectives:
Focus on the needs of customers and stakeholders
Target and achieve world’s best operational efficiency
Manage costs with tight controls
Be a key part of the water industry into the future – stay relevant
Build and retain a team that is committed to what the organisation stands for and will deliver
WaterSecure Annual Report 2008-09 15 Our performance – what we delivered
Western Corridor Recycled Water Project alliances To accommodate its massive scale and tight timelines, Project overview the Western Corridor Recycled Water Project was constructed by five alliances. WCRW Pty Ltd is a partner Western Corridor Recycled Water Pty Ltd was in all five alliances: established in March 2007 as a government-owned special purpose vehicle to build the Western Corridor Bundamba Alliance Recycled Water Project. The Bundamba Alliance was a joint venture between The $2.5 billion Project consists of three advanced leading Australasian construction, mining and water treatment plants at Bundamba, Luggage Point services company Thiess, and Black & Veatch, a global and Gibson Island, more than 200 kilometres of engineering, consulting and construction company. large-diameter underground pipeline and associated This alliance was responsible for building the 66 ML/ infrastructure, including nine large storage tanks and day Bundamba Advanced Water Treatment Plant, the 12 pumping stations. first of the Western Corridor plants to supply water to Taking water from six wastewater treatment plants in Swanbank and Tarong power stations. Brisbane and Ipswich and purifying it to the highest Both stages of the Bundamba plant were completed standards, it has the capacity to produce up to 232 on time, on budget and, remarkably, approximately 1.8 megalitres of purified water a day, depending on million hours were worked without a lost time injury. available feedwater and demand for product water. Eastern Pipeline Alliance The Project was built in four phases, each with its own regulated completion date. The first two of these The Eastern Pipeline Alliance comprised horizontal were in the previous financial year, with the final two directional drilling specialist AJ Lucas, international being 31 October 2008 (Stage 2a) and 31 December services firms Transfield Services and GHD and (Stage 2b). Sunwater, a Queensland Government-owned bulk water services supplier. With the four regulated dates met, major construction activities on the Project were completed on time and This alliance was responsible for building pipeline under budget. through heavily urbanised and environmentally sensitive areas in Brisbane’s east, south and south west. Other construction activities, such as the Eastern Pipeline drought contingency works and the Luggage The Premier of Queensland, Anna Bligh, attended a Point pretreatment expansion, continued in 2009, as ceremony on 21 October 2008 to mark the last piece of did commissioning activities. pipe to be laid on the Western Corridor Project, signing the pipe before it was lowered into the ground and welded in place.
16 WaterSecure Annual Report 2008-09 Premier Anna Bligh signs the last piece of pipe to be laid on WCRW Project.
WaterSecure Annual Report 2008-09 17 Gibson Island Alliance The plant’s completion was commemorated when the The Gibson Island Alliance was made up of international Deputy Premier of Queensland, Paul Lucas, attended a engineering company MWH, and Australian engineering community open day in November and tasted water firms WorleyParsons, Baulderstone Hornibrook and produced at the plant in front of the assembled media. United Group Infrastructure. Western Pipeline Alliance This alliance was responsible for constructing the The Western Pipeline Alliance consisted of 100ML/day Gibson Island Advanced Water Treatment international construction company McConnell Plant, the Project’s largest capacity plant built on the Dowell, leading Australian civil engineering company smallest site. Abigroup and GHD.
Clever design allowed the plant’s capacity to be This alliance was responsible for constructing the doubled within the same footprint. pipeline taking purified water from Bundamba to Caboonbah at the top of Wivenhoe Dam, the offtake Luggage Point Alliance pipeline at Comminya that will transport water to The Luggage Point Alliance was formed by global Wivenhoe Dam once the region’s combined dam levels engineering and construction firms CH2M Hill and fall below 40 per cent, pumping stations at Lowood Laing O’Rourke, and international services and and Caboonbah, and associated infrastructure. consulting companies Aurecon (formerly known as Connell Wagner) and Hatch.
This alliance was responsible for building the 66ML/day Luggage Point Advanced Water Treatment Plant, on the north side of the mouth of the Brisbane River.
18 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 19 WCRW achievements Innovation Safety Alliance structure – delivered the flexibility needed for an evolving project Excellent safety record The scheme operator, Veolia Water Australia, More than 7.2 million hours worked provided strategic advice during construction LTI rate of 2.21 – well below industry standard Safety box robot – an invention allowing safer and Bundamba AWTP completed LTI-free quicker pipelaying on the Western Pipeline
Delivery Triple pipeline section of the Eastern Pipeline, saved time and money and reduced disruption to First Water to Swanbank August 2007, community ahead of schedule Horizontal directional drilling (HDD) on the Eastern First Water to Tarong June 2008, ahead of schedule Pipeline – less disturbance to the sensitive wetland Project completed December 2008, meeting environment and infrastructure in Bulimba Creek, regulation dates and coming in under budget Aquarium Passage and the Brisbane River
About 21 billion litres of purified recycled water Bundamba AWTP – built in two stages to provide supplied by 30 June 2009 First Water in an extremely tight timeframe, going from horse paddock to producing First Water in Quality 300 days Interim Water Quality Report released in February shows Bundamba AWTP consistently produced Gibson Island AWTP – the largest WCRW plant water to meet the Public Health Regulation on the smallest site, designed to be upgraded to standards throughout the testing period 100ML/day. The plant even collects rainwater off its (May-December 2008) roofs for processing Environment Luggage Point AWTP – a fully functioning pilot plant built ahead of AWTP to reproduce the AWTP Approximate 90% reduction in phosphorus that process at a small scale to test plant performance would otherwise have been discharged into the Brisbane River from wastewater treatment plants Community engagement feeding the WCRW Project Two rounds of a grants program for community Approximate 35% reduction in nitrogen that would groups along the WCRW pipeline route ($120,000 otherwise have been discharged into the Brisbane in each round) River from wastewater treatment plants feeding Schools poster competition to raise awareness the Bundamba AWTP, with the potential to increase about the importance of water and water recycling this to 50% across the WCRW Project
20 WaterSecure Annual Report 2008-09 Award winning • 2008 Grand Honour Award for Project Winner of 12 prestigious awards (7 international, 2 Innovation – International Water Association national and 3 state), including: • 2009 Water Reuse Project of the Year – Global • 2008 Water Project of the Year – Global Water Water Intelligence Intelligence • 2009 Industry Award – South East Queensland • 2008 International Project of the Year – Healthy Waterways Construction Management Association of • 2009 Advisory Excellence Award (Evans & Peck), America National Infrastructure Awards – Infrastructure Partnerships Australia
Water supplied by the WCRW Project to Swanbank and Tarong power stations 2008-09 20000
18000
16000
14000
12000 10000 Tarong 800 MILLION LITRES
6000
4000
2000 Swanbank July 2008 May 2009 April 2009 June 2009 March 2009 March August 2008 August January 2009 October 2008 February 2009 February December 2008 November 2008 November September 2008 September
MONTHS
WaterSecure Annual Report 2008-09 21 Communication and community engagement were key to managing fast-track construction through urban communities and environmentally sensitive areas.
Working with the community Presentations, static displays and briefings for elected representatives and industry, WCRW has used integrated communications and environmental, cultural or other key stakeholders community engagement to reach its audiences to convey its key messages to build public understanding A public open day at Luggage Point Advanced of, confidence in and support for the Western Corridor Water Treatment Plant Recycled Water Project. This includes: A community grants program for groups along the Freecall telephone and email address for public WCRW pipeline route enquiries via a virtual project information desk, with enquiries logged in a stakeholder database to A schools extension program for 35 schools along ensure issues and concerns were monitored and the pipeline route responded to appropriately Media releases and feature stories on project Regular local community events, including BBQs, milestones for general news and trade publications information sessions, consultation booths and coffee vans, stakeholder and community meetings, Measurement of stakeholder/community perception workshops and information sessions of connectedness and involvement in the project and measurement of media coverage and website traffic. A suite of information materials, including fact sheets, newsletters, e-newsletters, resident letters, flyers, adverts, poster and signage, and a website
22 WaterSecure Annual Report 2008-09 Outlook for 2010
Complete construction activities Although major construction activities were completed in December 2008, other construction works are still underway, including the drought contingency works on the Eastern Pipeline and the expansion of pre- treatment facilities at Luggage Point. These activities will be completed in 2009-10.
Develop the WCRW Recycled Water Management Plan WaterSecure has assumed responsibility for developing a scheme-wide Recycled Water Management Plan for the Western Corridor project. This plan will be developed in 2009-10 and submitted to the regulator for approval so that WaterSecure will be in a position to supply water to Wivenhoe Dam when required.
Deliver safe purified recycled water that complies 100% with public health regulations The validation and verification processes for the Luggage Point and Gibson Island Advanced Water Treatment Plants will be completed in 2009-10. Continuous online monitoring and a program of testing will ensure the water produced consistently meets the Public Health Regulation standards.
Continue public education WaterSecure will expand its public education and site tour program to help strengthen confidence in the quality and safety of purified water before the trigger point for adding this water to the dam is reached.
Conduct first phase of lifecycle analysis WaterSecure will begin a lifecycle analysis to investigate the environmental implications of different water purification and wastestream treatment options to determine the most ecologically sustainable ways to operate its water purification plants.
Establish the Centre of Excellence WaterSecure, through a wholly-owned subsidiary company, will work with founding partners Griffith University, The University of Queensland, University of New South Wales, CSIRO, GHD and Veolia Water to establish the Centre of Excellence in Water Recycling. The Centre will build the knowledge and technology required to secure Australia’s future water supplies through alternative sources such as water recycling. In addition to the research and development activities, it will drive a national focus on addressing rural and urban water recycling, undertaking public engagement activities to promote acceptance and application of alternative water sources in all areas of Australian society. WCRW Pty Ltd will also seek new partners, both nationally and internationally, to strengthen the Centre and its work. The Centre of Excellence will receive $20 million over five years in Commonwealth funding.
WaterSecure Annual Report 2008-09 23 Gold Coast Desalination Project Gold Coast Desalination Project achievements
Project overview Safety South East Queensland (Gold Coast) Desalination Excellent safety record Company Pty Ltd, trading as SureSmart Water was More than 4.3 million hours worked established in November 2006 as a government- owned special purpose vehicle to be the LTI rate of 1.16 – well below industry standard Queensland Government’s arm of the Gold Coast Desalination Project. More than 2 million hours completed LTI-free
The $1.2 billion project included a 133 megalitre a day Delivery seawater desalination plant and the 24.9 kilometre First Water to the SEQ Water Grid 26 February 2009 Network Integration Pipeline and associated tanks and pump stations. 100% production reached March 2009
The project was initially an initiative of the Gold Coast Network Integration Pipeline completed and City Council. The Queensland Government became transferred to Linkwater March 2009 involved in the project through a memorandum More than 4.5 billion litres of desalinated water of understanding with Council in August 2006 and supplied by 30 June 2009 became the sole owner of the project in June 2008. The State transferred ownership of the project to Quality WaterSecure in October 2008. Consistently produced water to meet the Australian Drinking Water Guidelines The GCD Alliance Environment The Project was built by the GCD Alliance, a joint venture of John Holland and Veolia Water Australia, Desalination by-products – solids removed for along with sub-Alliance partners Sinclair Knight Mertz landfill rather than being discharged to the ocean and Cardno. SureSmart Water is part of the Alliance as in brine and supernatant treated before being the owner-representative. discharged with the brine
John Holland is one of Australia’s largest engineering Energy efficiency – energy recovery devices and construction firms. Veolia Water Australia is and high-efficiency pumps minimise power the local arm of one of the world’s foremost water consumption, making the Gold Coast Desalination and wastewater services companies. Both SKM and Plant one of the most energy-efficient plants in the Cardno are international providers of engineering and world, reducing costs and carbon emissions professional services. Intake and outlet structures have become artificial The GCD Alliance has a contract to operate the Gold reefs and home to countless sea creatures Coast Desalination Plant on behalf of WaterSecure.
24 WaterSecure Annual Report 2008-09 Innovation Award winning Alliance structure – delivered the flexibility needed Winner, 2009 Membrane Desalination Plant of the for an evolving project Year – Global Water Intelligence
Inlet and outlet tunnels rather than pipelines were used to take seawater to the plant and return brine to the ocean to minimise the impact on the local Water supplied by Gold Coast community and environment Desalination Plant to SEQ Water Grid. 5000 Open trenching methods were used to construct the Network Integration Pipeline, however 4000 to minimise the impact on local waterways, 3000 microtunnelling techniques were used underneath 2000 Tallebudgera and Currumbin Creeks MILLION LITRES 1000 Community engagement Community Reference Group, including representatives from local community groups, May 2009 April 2009 June 2009
businesses, residents and government, met each 2009 March
month for the duration of the project to provide 2009 February members with regular construction and information MONTHS updates and allow them to raise any concerns
More than 3000 people visited the Project Information Centre, which was open to the public Monday to Friday 8am to 5pm for the majority of the project to provide general information about the project and allow specific questions to be answered
More than 7000 community members attended Desal Day, the Alliance’s largest celebration, on Sunday, 30 November 2008 to celebrate the production of ‘first water’ from the plant
WaterSecure Annual Report 2008-09 25 26 WaterSecure Annual Report 2008-09 Working with the community Outlook for 2010 A project in a highly urbanised and environmentally Complete construction activities sensitive area was bound to generate significant All construction activities, including construction of a community interest so working with the community fluoridation plant within the desalination plant, will be was a priority for the GCD Alliance. completed in 2009-10.
The residents and businesses potentially affected by Complete reliability trial construction were kept up to date with all aspects of The desalination plant is required to complete a construction that could possibly impact on them. In reliability trial to demonstrate it can operate reliably addition to newsletters, flyers and notification letters, at full capacity. This trial will be completed early in door knocking was undertaken to ensure that each 2009-10. resident was aware of relevant construction activities. Complete commissioning Monthly Community Reference Group meetings were held to keep the local community informed. As is usual with major infrastructure projects, a Representatives included local councillors and number of non-compliances came to light during Members of Parliament, local business and community commissioning of the plant. WaterSecure and the group representatives and local residents. GCD Alliance are working cooperatively to resolve these issues, the majority of which have been fully Site tours were given to almost 200 business, resolved or a resolution is in progress. All will be community, school and local groups, and in resolved in 2010. addition presentations were given to more than 370 community groups.
A project in a highly urbanised and environmentally sensitive area was bound to generate significant community interest so working with the community was a priority for the GCD Alliance.
WaterSecure Annual Report 2008-09 27 Aligning with Queensland Coast desalination plant has recorded lower than expected energy readings. ‘Green’ energy options Government priorities are being actively pursued to minimise the plant’s carbon footprint as part of Premier Anna Bligh’s public The recent drought experienced by South East challenge to Australia’s green energy industry to Queensland was the region’s worst in recorded history. completely offset carbon emissions from the plant. Dam levels dropped to as low as 16.7 per cent, just Early in the 2009-10 financial year, WaterSecure will 16 months supply, and residents were forced to abide purchase renewable energy certificates (RECs) to by strict water restrictions. completely offset the plant’s energy consumption, In response to this dire situation, the Western contributing to the government’s target to cut Corridor Recycled Water Project and the Gold Coast Queensland’s carbon footprint by one third with Desalination Plant were constructed to provide new decreased car and electricity use. sources of pure water to cope with declining supply and an increasing population. The construction Efficiency, effectiveness and of these facilities aligns with the Queensland Government’s priority of creating a diverse economy measuring performance powered by bright ideas. The projects are world The executive management of WaterSecure has set leaders in their use of innovation and technology and goals for the organisation that are routinely monitored. created thousands of jobs for locals. Both facilities Dedicated operations staff have been employed at now provide a sustainable water source for current head office to monitor the operations of the plants, as South East Queensland residents, and the future well as onsite staff through scheme operator Veolia. population, contributing to the government’s target that Queensland be Australia’s strongest economy, During the construction phase, timelines were set with infrastructure that anticipates growth. to keep the projects on track. All regulated dates for the Western Corridor Recycled Water Project were Western Corridor Recycled Water’s role as host of the met, with a number occurring ahead of schedule. It new National Centre of Excellence in Water Recycling was completed in record time, halving the normal will see the organisation and its partners build the construction time for its complexity and size. Both knowledge and technology required to secure Australia’s projects have also been built within budget, due future water supplies. Through its research and to innovation and careful financial management development activities, the Centre will put Australia at resulting in cost efficiencies. WaterSecure intends the forefront of water recycling technology, supporting on continuing its fiscal success as it moves into the the state government’s target of a 50 per cent increase operations phase and has policies, procedures and in the proportion of Queensland businesses that people in place to do so. undertake research and development or innovation.
Both the desalination plant and Western Corridor Recycled Water are benefitting the environment by reducing the pressure on our dams. Western Corridor has additional benefits for our waterways through the removal of nutrients and contaminants that would otherwise be in the water, while the Gold
28 WaterSecure Annual Report 2008-09 The results of the Interim Water Quality Report for the place at the time. In response to this, refinement of the Bundamba Advanced Water Treatment Plant (AWTP) governance processes ensured project risks continued were extremely pleasing. The report was released in to be well managed. As one of the first projects to adopt February 2009 and showed the Bundamba AWTP a multi-alliance method of construction this is a point to consistently produced water to meet Public Health be taken on by similar projects in the future. Regulation standards throughout the testing period (May-December 2008). The single alliance used on the Gold Coast Desalination Project has included a slightly different approach to The two projects are delivering great results for project management. A Joint Steering Committee South East Queensland as they ease pressure on the comprising the WaterSecure, Veolia Water and John region’s water supply. More than 4.6 billion litres of Holland chief executives has provided high-level desalinated water has been supplied to the Water Grid oversight and guidance. The Alliance Leadership Group since February 2009 and more than 21 billion litres of and Alliance Project Management Team, both of which purified recycled water has gone to Swanbank and include owner and non-owner representatives, have Tarong power stations since August 2007. provided on-the-ground management and leadership.
Performance reviews of WaterSecure’s Chief Executive The transition from construction to operations for Officer and Executive Management Team (EMT) both WCRW and desalination projects has required members will be undertaken in the second half of constant, open communication and strong policies 2009. These reviews will focus on the achievements and procedures to ensure a smooth transition. With and activities undertaken in the 2008/2009 financial clear communication and effective relationships in period. The Chief Executive Officer will perform the place, the move from two disparate projects to two reviews of EMT members and the Chairman of the schemes managed by the same owner has progressed Board will perform the CEO’s review. These reviews will well through great effort from all parties, particularly follow the process set out in the evaluation policies senior management. developed by the Human Resources team.
Lessons learned
While the multi-alliance approach resulted in a number of benefits for the WCRW Project, inherent in that were also complexities that needed to be worked through. The governance framework for the project was developed to ensure effective management and decision making throughout the project. This framework included the Project Management Group (owner representatives only), Alliance Leadership Team (alliance representatives and owner representative) and the Alliance Management Team (alliance representatives and owner representative). Scope changes as the project progressed challenged the governance framework in
WaterSecure Annual Report 2008-09 29 Our people
WaterSecure recognises that people prosper in the and developing a suitable structure. This has involved workplace when they are motivated and inspired critical workforce planning and implementation of through strong leadership and teamwork. strategies to retain knowledge gained from the project aspects of the business. WaterSecure’s organisational structure has been designed to incorporate the following four areas of WaterSecure has invested significant time on the responsibility: development of a range of policies in accordance with the State Water Authorities Governance Framework. Corporate Specifically, WaterSecure has been developing policy frameworks in recruitment and selection, Business Services performance and remuneration. A five year strategic Operations human resources plan is being developed as well as an industrial relations plan and annual workforce plan to Technical Services. forecast the resourcing and succession requirements for the coming years. Recruitment and selection Employees transferred to WaterSecure by way of a processes follow equal employment opportunity transfer notice issued in accordance with the South policies and legislation. Further initiatives for women East Queensland Water (Restructuring) Act 2007 in are under development. September 2008 (Executives) and February 2009 (staff). In total, 18 employees transitioned with their existing WaterSecure developed a Code of Conduct and employment terms and conditions which is consistent provided training to all staff in 2009. The Code was with the South East Queensland Water (Restructuring) developed in consultation with internal and external Act 2007. stakeholders and approved by the WaterSecure Board. The Code is provided to all new staff and training on The workforce profile as at 30 June 2009 was: this Code is part of the induction program for new staff. Procedures are in place for staff to make disclosures or Full-time equivalents (FTEs)* 28.8 report concerns under the Code. Permanent retention rate** 69% Safety is WaterSecure’s number one priority, and this Permanent separation rate*** 36% message has been carried through from construction to operations. Management and staff representatives * Includes permanent and fixed-term employees on our dedicated Health and Safety Committee meet each month. The Committee is proactive about ** Calculated on the 13 permanent positions at maintaining safety in the office and on site. Committee 1 July 08 members communicate through monthly Safety *** Calculated on the 25 permanent positions at Toolbox meetings that all staff are required to attend. 30 June 09 High safety standards are expected of all employees Policy development has been a key achievement and regular training takes place in head office and of the past year, guiding staff in their activities and on site. The standard has been set through the work shaping the culture of the organisation. Given the of the Alliances, which maintained an impressive infancy of the organisation, immediate resources have safety record over the past year, keeping Lost Time focused on assessing the organisational requirements Injuries well below industry standards. There are also opportunities provided for training in health and safety.
30 WaterSecure Annual Report 2008-09 WaterSecure recognises that people prosper in the workplace when they are motivated and inspired through strong leadership and teamwork.
WaterSecure Annual Report 2008-09 31 Consultancies The tables below set out expenditure by WaterSecure, Western Corridor Recycled Water Pty Ltd and SureSmart Water on various categories of consultancies.
WaterSecure
2008-2009 Consultancy Type $
Communication 416,074.85
Financial Accounting 35,030.00
Human Resources 195,650.00
Professional/Technical 39,200.00
Costs of consultancies 685,954.85
Western Corridor Recycled Water Pty Ltd
2008-2009 Consultancy Type $
Asset Consultancy 1,048,287.74
Communication 777,769.72
Community Engagement 873,919.62
Financial Accounting 1,033,904.95
Human Resources 0.00
Information Technology 315,225.00
Professional/Technical 22,620,671.89
Costs of consultancies 26,669,778.92
SureSmart Water
Consultancy Type 2008-2009 $
Financial Accounting 248,009.92
Professional/Technical 3,532,288.25
Costs of consultancies 3,780,298.17
32 WaterSecure Annual Report 2008-09 Overseas Travel The tables below set out expenditure by WaterSecure and Western Corridor Recycled Water Pty Ltd on overseas travel.
WaterSecure
Financial Year Purpose Destination Employee Cost
Attendance at Singapore Water Keith Davies 2008-2009 Week as representatives of Singapore 13,748.02* Cedric Robillot WaterSecure
Western Corridor Recycled Water Pty Ltd
Financial Year Purpose Destination Employee Cost
Visit to Singapore to develop 2008-2009 Singapore Stephen Ring 6,622.62 Centre of Excellence Concept Plan
No overseas travel by SSW employees occurred during the financial year.
*Includes airfares, accommodation and registration for Singapore Water Week
WaterSecure Annual Report 2008-09 33 Corporate governance
WaterSecure believes that good corporate of the key areas of contract and asset management; governance should encourage performance, corporate governance including regulatory innovation and value, yet provide high levels of requirements, finance and support services; business accountability and risk management. development and operations. This is a significant step forward from our original structure reflecting a project Corporate governance also changes with developing management approach to a corporate framework. organisations. As WaterSecure has been established, we have developed and refined our governance processes The Scheme Operator, Veolia Water Australia, interacts and policies to reflect increasing levels of management with head office primarily through the Chief Operating accountability, efficiency and effectiveness. Officer and with each of the project Alliances. Veolia Water Australia has taken over operations and maintenance for the Bundamba Advanced Water Leadership and Treatment Plant, with the Luggage Point, Gibson Island management structure and desalination plants to follow.
The Queensland Government has overall responsibility for WaterSecure under the direction of the Minister Board administration for Natural Resources, Mines and Energy and the The WaterSecure Board was formed on 1 August 2008. Queensland Treasurer. This was also the start date of each of WaterSecure’s The Board of WaterSecure sets the strategic direction current directors. for WaterSecure and ensures that WaterSecure All directors are independent and there is no actual achieves and acts in accordance with its Strategic and or potential conflict of interest between the personal Operational Plans. or business affairs of any director and the discharge of To assist in fulfilling its duties the Board has two their duties to WaterSecure as a director. A criterion of committees, the Audit, Risk and Remuneration materiality thresholds will be developed to complement Committee and the Water Quality and Asset the assessment of directors’ independence. Management Committee. Each committee has As this is the first year of operations for WaterSecure a formal charter that sets out committee roles, and the board was only recently appointed, there has responsibilities and authority. Minutes of all meetings not been a formal board performance assessment are provided at board meetings and the Chair of the to date. The initial WaterSecure board performance committee reports to the Board on the committee assessment will be undertaken in the upcoming year. meetings held. The Board has in place an agreed procedure for WaterSecure’s Chief Executive Officer, Keith Davies, is directors to follow when obtaining independent supported by the Executive Management Team and professional advice at WaterSecure’s expense, in respective leadership groups for the two projects. The relation to the discharge of their responsibilities as a Executive Management Team, in place throughout the director of WaterSecure. past year, has helped provide business focus to each
34 WaterSecure Annual Report 2008-09 Directors meetings 1 July 2008 – 30 June 2009
There were no meetings of the WaterSecure, WCRW and SSW Boards between 1 July and 31 July 2008.
Mr PA Hennessy, Mr KN Sedgwick and Mr TJ Spencer resigned from the WCRW Board effective 1 August 2008.
Mr GJ Carpenter, Mr D Dickson, Mr D Stewart and Mr JD Witheriff resigned from the SSW Board on 1 August 2008.
The WaterSecure, WCRW and SSW Boards were reconstituted to have a common membership and Mr DM Gray, Mr ME Pascoe, Mr S Golding, Mr D McDougall and Mr S Standen consented to act as Directors of these boards on 1 August 2008.
The table below shows director attendance at Board and Committee meetings throughout 2008-09.
Water Quality, Asset Audit, Risk and Board Management, Research and Remuneration Committee Development Committee
Meetings Meetings Meetings Meetings Meetings Meetings Director held attended held attended held attended
David Gray 10 10 6 6 7 5
Steve Golding 10 10 N/A N/A 6 6
Mark Pascoe 10 8 N/A N/A 7 7
David McDougall 10 9 6 6 N/A N/A
Scott Standen 10 10 6 6 N/A N/A
WaterSecure Annual Report 2008-09 35 Audit and risk management Alliances provided risk reports on a monthly basis in the following categories:
Risk management Safety WaterSecure has developed a Risk Management Policy Schedule and Framework and established a Risk Management Committee. Our risk management approach is to Commissioning identify, prioritise and manage all our risks, including strategic, operational and project risks. WaterSecure’s Practical completion definition of risk and approach to risk management is aligned with the Australia/New Zealand Risk Commercial Management Standard (AS/NZ 4360:2004). Defects management/Quality The Risk Management Committee regularly reports to Environment the Audit Risk and Remuneration Committee, which includes board members David Gray, David McDougall Land access and Scott Standen. Remuneration policies are also reported to this committee. Financials
For both projects, WaterSecure appointed a risk Risk management is also of paramount importance administrator to oversee the risk management process. in WaterSecure’s efforts to provide a safe working A risk management framework was developed to environment for personnel, operators, contractors, monitor and improve the performance and outcomes visitors and members of the public; to achieve our of the project. A risk register has been maintained strategic objectives; and to enhance the environment since the inception of the project, addressing risks at in which we work. a corporate level. A process of identifying, analysing, These risks are reported using a traffic light formula mitigating and reporting risks was adopted for the which enables the issues to be rated in terms of their risk project at various levels as follows: levels. These strategies continue to be employed post- Project Management Group construction to ensure WaterSecure meets its objectives and operates in a risk-mitigated environment. Alliance Internal Audit Operator WaterSecure has developed an Internal Audit Charter to define Internal Audit’s objectives. The Charter sets out the purpose of the Internal Audit function, including authority, responsibility and objectives. The Charter is approved by the WaterSecure Board and Audit, Risk and Remuneration Committee and has been prepared in accordance with the requirements of the Financial Administration and Audit Act 1977.
36 WaterSecure Annual Report 2008-09 Internal Audit assists the Board and Committees Information systems and record keeping in the effective execution of their responsibilities The organisation has a number of policies and by providing independent analysis, advice and procedures in place to ensure the appropriate recommendations concerning WaterSecure’s management of documents and records. These operations and processes. The internal audit function systems will be further consolidated in the coming has been outsourced to Ernst & Young. The Internal year with the appointment of the Information and Audit Partner has unrestricted access to the Audit, Risk Knowledge Manager. This position will be responsible and Remuneration Committee to discuss any matter for developing a records management framework and relating to the finances and operations of WaterSecure. implementing an electronic document and records management system to support efficient and effective Systems for obtaining financial knowledge management and ensure that information and non-financial information compliance and accountability requirements are met.
Financial information WaterSecure has established a process whereby the cost elements of the project are forecast, captured, analysed and reported monthly to the Board and in detail to the Audit Risk and Remuneration Committee every two months.
Finances are regularly audited by the Queensland Audit Office. Each of the Alliances was also independently financially audited monthly.
Non-financial information Personnel numbers across the scheme are collated from reports from the project alliances and reported to the Department of Infrastructure and Planning.
Schedule performance is managed by the Project Director through alliance reporting protocols.
The organisation’s reputation and that of the Western Corridor Recycled Water Project and Gold Coast Desalination Project is monitored by WaterSecure’s Corporate Communications and Community Engagement teams through media monitoring and stakeholder engagement activities.
WaterSecure Annual Report 2008-09 37 Summary of financial position and performance
Queensland Manufactured Water Authority (WaterSecure) Income statement for the year ended 30 June 2009
Consolidated Parent
2009 2009 2008 $ $ $
Revenue
Sales ‑ South East Queensland Water Grid Manager 126,941,416 - -
Sales ‑ pipeline construction 39,882,096 - -
Services revenue ‑ corporate support - 3,713,903 -
Other revenue 1,633,333 251,500 -
Interest income 669,095 95,438 -
Total revenue 169,125,940 4,060,841 -
Expenses
Cost of sales (54,185,107) - -
Depreciation (22,485,382) (1,225) -
Employee benefits and related expenses (2,437,645) (1,778,329) -
Other expenses (6,432,468) (2,441,945) -
Impairment of property, plant and equipment (124,128,395) - -
Loss on share transfers (39,055,245) - -
Finance costs (67,640,336) (10,836,708) -
Total expenses (316,364,578) (15,058,207) -
Loss before income tax equivalents (147,238,638) (10,997,366) -
Income tax equivalents (expense)/benefit (4,372,299) 3,299,210 -
Net loss after related income tax equivalents (151,610,937) (7,698,156) -
38 WaterSecure Annual Report 2008-09 Queensland Manufactured Water Authority (WaterSecure) Balance sheet 30 June 2009
Consolidated Parent
2009 2009 2008 $ $ $
ASSETS
Current assets
Cash and cash equivalents 196,349,297 162,923,683 -
Trade and other receivables 46,480,563 1,025,120 -
Other assets 2,596,945 43,124 -
Assets classified as held for transfer 46,177,700 - -
Total current assets 291,604,505 163,991,927 -
Non‑current assets
Investments in controlled entities - 426,329,685 -
Property, plant and equipment 3,047,952,733 35,277 -
Deferred tax equivalents assets 143,562,828 3,299,210 -
Total non‑current assets 3,191,515,561 429,664,172 -
TOTAL ASSETS 3,483,120,066 593,656,099 -
LIABILITIES
Current liabilities
Trade and other payables 97,029,358 957,379 -
Interest bearing liabilities 15,071,869 1,771,869 -
Current tax equivalents liabilities 184,176 - -
Accrued employee benefits 70,352 62,535 -
Other liabilities 59,031,770 - -
Total current liabilities 171,387,525 2,791,783 -
Non‑current liabilities
Interest bearing liabilities 2,630,085,081 238,938,276 -
Deferred tax equivalent liabilities 70,341,543 - -
Other liabilities 403,292,658 - -
Total non‑current liabilities 3,103,719,282 238,938,276 -
TOTAL LIABILITIES 3,275,106,807 241,730,059 -
NET ASSETS 208,013,259 351,926,040 -
EQUITY
Contributed Equity 359,624,196 359,624,196 -
Accumulated losses (151,610,937) (7,698,156) -
TOTAL EQUITY 208,013,259 351,926,040 -
WaterSecure Annual Report 2008-09 39 Queensland Manufactured Water Authority (WaterSecure) Cash flow statement for the year ended 30 June 2009
Consolidated Parent
2009 2009 2008 $ $ $
Cash flows from operating activities:
Receipts from customers 176,570,571 2,702,346 -
Receipt of government grants 250,000 250,000 -
GST collected from customers 1,627,259 404,201 -
GST paid to suppliers 3,263,862 (154,054) -
Payments to suppliers and employees (121,808,907) (3,332,561) -
GST remitted to ATO 1,927,532 (170,434) -
Interest received 2,572,284 - -
Income tax equivalents paid (20,058,044) - -
Net cash provided by/(used in) 44,344,557 (300,502) - operating activities
Cash flows from investing activities
Interest received 704,082 92,739 -
Acquisition of subsidiaries (228,123,489) (228,123,489) -
Construction work in progress payments (642,433,721) - -
Property plant and equipment purchases (430,840) (36,502) -
Proceeds on sale of plant and equipment 12,107 - -
GST refunds ‑ investing activities 34,110,742 - -
Proceeds from security deposits 9,600 - -
Cash acquired relating to share transfers 29,919,795 - -
Net cash provided by/(used in) investing activities (806,231,724) (228,067,252) -
Cash flows from financing activities
Proceeds from capital injection 161,418,000 161,418,000 -
Proceeds from QTC borrowings 796,818,546 229,873,437 -
Repayment of borrowings (82) - -
Net cash provided by/(used in) financing activities 958,236,464 391,291,437 -
Net increase in cash and cash equivalents held 196,349,297 162,923,683 -
Cash and cash equivalents at beginning of financial year - - -
Cash and cash equivalents at the end of financial year 196,349,297 162,923,683 -
For the full audited financial statements WaterSecure, Western Corridor Recycled Water Pty Ltd and SureSmart Water for 2008-09, please see the CD included in this annual report or download the full annual report from our website.
40 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 41 Glossary
Advanced oxidation Corporate social responsibility
Advanced oxidation is a water treatment process that WaterSecure manages its business in a way that uses powerful oxidants in conjunction with ultraviolet produces an overall positive impact on the community light to destroy trace levels of organics that have not and environment. To that end, WaterSecure has been rejected by reverse osmosis. It is the fifth barrier in adopted a broad definition of the environment that the seven-barrier water treatment system (see below). includes biological, ecological, physical, social and cultural resources, and is committed to protecting Advanced water treatment plant these in the short and long term. An advanced water treatment plant (AWTP) is a plant Desalination where water from a wastewater treatment plant that would otherwise be discharged into a river is purified Desalination is the process of creating drinking water through a multi-barrier process so that it meets the from seawater. Australian Drinking Water Guidelines and Australian Guidelines for Water Recycling. First water Australian Drinking Water First water refers to the first production of water from one of WaterSecure’s water recycling or Guidelines desalination plants. The Australian Drinking Water Guidelines is the key Australian reference to drinking water quality Lost time injury rate published by the National Health and Medical Research Council and the Agriculture and Resource Lost time injury frequency rate is the number of injuries Management Council of Australia and New Zealand. that occur on a project per million hours worked and is used to analyse the success of safety practices. Australian Guidelines for Water Recycling Megalitre One million litres. The Australian Guidelines for Water Recycling is based on the framework developed for the Australian Drinking Water Guidelines (see above) with Microfiltration adaptations to manage risks to human health and the environment. It outlines not only the technical Microfiltration, the third barrier in the seven-barrier issues of recycled water supply but also aspects such water treatment system (see below) involves passing as corporate commitment, communication, training wastewater through very fine hollow fibre membranes. and relationships with other stakeholders and with With pores the size of 0.04 to 0.2 micrometres (human consumers which WaterSecure must comply with. hair ranges in size from 20 to 200 micrometres in diameter), these membranes remove particulate matter, protozoa and some viruses.
42 WaterSecure Annual Report 2008-09 Project alliance Scheme operator
A project alliance is a commercial legal framework Veolia Water is the scheme operator selected to manage between a government agency as ‘owner’-participant the operation of the Western Corridor Recycled Water and one or more private sector parties as the ‘alliance Project and Gold Coast Desalination Plant. contractor’ or ‘non-owner participant’ in a capital works project. Seven-barrier treatment system Purified recycled water A system for purifying wastewater by passing it through a system of barriers or treatment processes, Purified recycled water (PRW) is water that has been for which WaterSecure’s advanced water treatment purified at an advanced water treatment plant. plants provide barriers three (microfiltration), four For more information visit www.qwc.qld.gov.au. (reverse osmosis) and five (advanced oxidation and disinfection). Queensland Water Commission South East Queensland Water Grid The Queensland Water Commission (QWC) is the Queensland Government authority responsible for The SEQ Water Grid is a network of water storages, implementing water restrictions, managing water water purification plants and two-way pipes to demand, providing advice to government and transport water from areas of water surplus to areas reforming the water industry to provide a sustainable facing a shortfall. The project features more than 400 water supply for South East Queensland. km of pipeline, two new dams, a desalination plant and three advanced water treatment plants. Reverse osmosis Special purpose vehicle Reverse osmosis, the fourth barrier in the seven-barrier water treatment system (see below) A special purpose vehicle is an entity which is formed involves forcing filtered water through a specially for a lawful, single, well-defined and narrow purpose. engineered membrane at high pressure to remove The Western Corridor Recycled Water Pty Ltd special impurities such as dissolved salts, viruses, pesticides purpose vehicle has been established with the specific and most organic compounds. and sole objective of carrying out the design and construction of the Western Corridor Recycled Water scheme. SureSmart Water performs a similar function Reverse osmosis concentrate for the Gold Coast Desalination Project. Reverse osmosis concentrate is the part of feed water that is rejected by the reverse osmosis membranes in an advanced water treatment plant.
WaterSecure Annual Report 2008-09 43 Annual report checklist
FAA Financial Administration and Audit Act 1977 FMS Financial Management Standard 1997 ARGs Annual Reporting Guidelines for Queensland Government Agencies
Annual Summary of Requirement Basis for Requirement Report Reference
Table of Contents ARGs – section 8.1 P1
Glossary P42
Public Availability FMS – section 95 (1) (i) P1 Accessibility Interpreter Service Statement Queensland Government P1 Language Services Policy
Copyright Notice Copyright Act 1968 P1
Letter of A letter of compliance from the accountable officer or ARGs – section 9 Inside Compliance statutory body to the relevant Minister(s) cover
Agency role and main functions FMS – section 95 (1) (a) and (b) P4
ARGs – section 10.3
Operating environment FMS – section 95 (1) (f), (e), (j) P6-9; 14-15 Introductory External Scrutiny ARGs – section 10.3 See Financial Information statements P51 Machinery of Government changes ARGs – section 10.3 n/a
Review of proposed forward operations FMS – section 95 (1) (h) P14-15
Government Objectives for the Community FMS – section 95 (1) (a) and (i) P28
Agency Agency Objectives and Performance Indicators ARGs – section 11.5 P15; 28-29 Performance Agency Outputs and Output Performance P16-29 Measures
Summary Summary of financial information ARGs – section 12 P38-40 of Financial Information
44 WaterSecure Annual Report 2008-09 Annual Summary of Requirement Basis for Requirement Report Reference
Organisational Structure FMS – section 95 (1) (f) (iii) P10; 34
Executive Management FMS – section 95 (1) (f) (iii) P10-13; 34
Related Entities FMS – section 96 (1) See Financial statements P4
Schedule of Statutory Authorities or FMS – section 96 (2) n/a Governance – Instrumentalities Management Boards and Committees ARGs – section 13.5 P10-11; and Structure 34-37
Public Sector Ethics Act 1994 Public Sector Ethics Act 1994 P30 - implementation statement giving details of the action taken during the reporting period (section 23 and Schedule)
Whistleblowers Protection Act 1994 Whistleblowers Protection Act n/a - public interest disclosures received 1994
(sections 30 – 31 and Schedule)
Governance Risk Management FMS – section 95 (1) (k) P35-36 – Risk Audit Committee ARGs – section 14.2 P35-37 Management and Accountability Internal audit ARGs – section 14.3 P35-37
Workforce Planning, Retention and Turnover FMS – section 95 (1) (f) (iii) P30
Voluntary Early Retirement (VER) Directive No.11/05 Voluntary n/a Governance Early Retirement (VER) – Human Resources Retrenchments Directive No.10/05 n/a Retrenchment
Initiatives for Women ARGs – section 15.4 P30
WaterSecure Annual Report 2008-09 45 Annual report checklist
Annual Summary of Requirement Basis for Requirement Report Reference
Consultancies FMS – section 95 (1) (eb) P32
Overseas Travel FMS – section 95 (1) (ea) P33
Information Systems and Recordkeeping Public Records Act 2002 P37 Governance - Operations Waste Management Environmental Protection n/a (Waste Management) Policy 2000, Environmental Protection Act 1994
Shared Services ARGs – section 17.1 n/a Other Prescribed Carbon Emissions Premier’s Statement n/a Requirements
Annual general purpose financial statements Financial Reporting See Requirements for Queensland Financial Government Agencies statements
Certification of Financial Statements FAA – sections 39 and 46F See Financial statements P50 Financial Statements Independent Auditors Report FAA - sections 38AA(1) and See 46FA(3) Financial statements P51
Remuneration Disclosures Financial Reporting See Requirements for Queensland Financial Government Agencies statements P26-27
46 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 47 Financial Report
Queensland Manufactured Water Authority For the Year Ended 30 June 2009
48 WaterSecure Annual Report 2008-09 Contents
Income Statement 50
Balance Sheet 51
Statement of Changes in Equity 52
Cash Flow Statement 53
Notes to the Financial Statement 54
Management Certificate 99
Independent Audit Report 100
WaterSecure Annual Report 2008-09 49 50 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 51 52 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 53 55 69
74 74 74 74 76 76 77 79 79 79 80 80 81 84 86 87 87 88 88 89 89 90 91 92 92 93 97 98 98
54 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 55 56 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 57 58 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 59 60 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 61 62 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 63 64 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 65 66 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 67 68 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 69 70 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 71 72 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 73 74 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 75 76 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 77 78 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 79 80 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 81 82 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 83 84 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 85 86 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 87 88 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 89 90 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 91 92 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 93 94 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 95 96 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 97 98 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 99 100 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 101 Financial Report
Western Corridor Recycled Water Pty Ltd For the Year Ended 30 June 2009
102 WaterSecure Annual Report 2008-09 Contents
Directors’ report 104
Auditor’s Independence Declaration 110
Income Statement 111
Balance Sheet 112
Statement of Changes in Equity 113
Cash Flow Statement 114
Notes to the Financial Statement 115
Directors’ Declaration 147
Independent Audit Report 148
WaterSecure Annual Report 2008-09 103 104 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 105 106 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 107 108 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 109 110 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 111 112 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 113 114 WaterSecure Annual Report 2008-09 116 126 126 126 127 128 128 129 131 131 131 132 132 134 134 135 136 136 137 137 138 139 141 141 141 145 146 146
WaterSecure Annual Report 2008-09 115 116 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 117 118 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 119 120 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 121 122 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 123 124 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 125 126 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 127 128 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 129 130 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 131 132 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 133 134 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 135 136 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 137 138 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 139 140 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 141 142 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 143 144 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 145 146 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 147 148 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 149 Financial Report
South East Queensland (Gold Coast) Desalination Company Pty Ltd For the Year Ended 30 June 2009
150 WaterSecure Annual Report 2008-09 Contents
Directors’ report 152
Auditor’s Independence Declaration 158
Income Statement 159
Balance Sheet 160
Statement of Changes in Equity 161
Cash Flow Statement 162
Notes to the Financial Statement 163
Directors’ Declaration 193
Independent Audit Report 194
WaterSecure Annual Report 2008-09 151 152 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 153 154 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 155 156 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 157 158 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 159 160 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 161 163 174 174 174 175 178 179 179 179 180 181 181 182 182 183 183 184 184 186 187 187 190 191 191
162 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 163 164 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 165 166 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 167 168 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 169 170 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 171 172 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 173 174 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 175 176 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 177 178 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 179 180 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 181 182 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 183 184 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 185 186 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 187 188 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 189 190 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 191 192 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 193 194 WaterSecure Annual Report 2008-09 WaterSecure Annual Report 2008-09 195