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Melbourne Water Annual Report 2004•05 MW Annualreport 05 PDF.Qxd 5/10/05 6:37 PM Page 1 MW_AnnualReport_05_PDF.qxd 5/10/05 6:37 PM Page 1 annual report 2004 05 MW_AnnualReport_05_PDF.qxd 5/10/05 6:37 PM Page 2 Contents Overview Our business and stakeholders 2 Our principles and goals 2 Our values 3 Chairman and Managing Director’s report 4 2004•05 in review: Economic management 6 Environmental sustainability 8 Social sustainability 14 Corporate governance 20 Five-year financial summary 24 Financial summary: Directors’ report 26 Statement of financial performance 29 Statement of financial position 30 Statement of cash flows 31 Notes to the accounts 32 Statement by Directors and Chief Finance Officer 55 Auditor-General’s report 56 Disclosure index 58 Statement of Corporate Intent 59 Statutory information 64 Whistleblowers procedures 69 Cover: Mitch Lucas, Hurstbridge Primary School Melbourne Water Annual Report 2004•05 MW_AnnualReport_05_PDF.qxd 5/10/05 6:37 PM Page 1 Upper Yarra Reservoir 1 MW_AnnualReport_05_PDF.qxd 5/10/05 6:37 PM Page 2 Overview Our business and Our customers are the metropolitan retail Our goals water businesses – City West Water, stakeholders South East Water and Yarra Valley Water Water resources Melbourne Water manages – other water authorities, local councils, • Protect and conserve Melbourne’s Melbourne’s water supply land developers and businesses that existing water resources catchments, removes and divert river water. Other partners include • Protect our water supply catchments the Port Phillip and Westernport from bushfire treats most of Melbourne’s Catchment Management Authority, sewage, and manages rivers the Municipal Association of Victoria, • Develop alternative water and creeks and major the Sustainable Energy Authority of resources, including recycled water, drainage systems in and Victoria and the University of Melbourne. that meet our customers’ current and future needs around the city. We work closely with research organisations to assess long-term • Increase water resource efficiency. We are owned by the Victorian impacts on Melbourne’s water Government, with an independent Board Public health resources. Our community engagement of Directors responsible for governance. • Supply high quality and reliable activities rely on the support and The responsible Minister is the drinking water involvement of many community Minister for Water. stakeholders. • Deliver safe sewage transfer, We are a significant business, managing treatment and disposal $8.1 billion in water supply, sewerage Our sustainability principles • Manage flood risk. and drainage assets that service an area of more than 7800 square Our commitment to sustainability will Natural environment be demonstrated by: kilometres. We are committed to looking • Improve environmental outcomes after these assets in a way that protects • Protecting and conserving from all aspects of our business and improves their environmental, Melbourne’s water resources social and financial values. We are • Improve river health and the • Protecting and improving the responsible for 1029 kilometres of marine environment environment, including biodiversity water distribution mains, 399 kilometres • Improve biodiversity • Our leadership, scientific research, of sewers, 1285 kilometres of • Preserve and promote our cultural creativity and innovation underground drains, and 47 drainage, heritage. sewage and water pumping stations. • Ensuring responsible risk Our annual operating revenue of more management Financial viability than $500 million is earned from water • Increase business value through • Sharing information and fostering innovation and efficiency supply and sewage treatment charges, collaborative working relationships and drainage rates. It is used to fund • Balance investments and levels our operations and infrastructure • Maintaining long-term financial of service and risk projects including water, sewerage and viability • Maximise resource efficiency drainage upgrades and water recycling • Contributing to the health of the schemes, as well as works to improve community • Maintain sound governance and protect Melbourne’s rivers, creeks, • Demonstrating corporate social • Ensure investment decisions are wetlands and the bays. responsibility sustainable We work across several arms of the • Ensuring intergenerational equity • Deliver planned shareholder returns. Victorian Government, including the by considering short-term and Department of Sustainability and long-term implications in all Environment and the Department of decision making Treasury and Finance. EPA Victoria and the Department of Human Services • Providing an environment where regulate the environmental and public employees are encouraged to health aspects of our business, and we achieve their full potential. work closely with the Essential Services Commission, the economic regulator of Victoria’s water industry. 2 Melbourne Water Annual Report 2004•05 MW_AnnualReport_05_PDF.qxd 5/10/05 6:37 PM Page 3 Infrastructure Our values • Ensure stringent regulatory • We recognise that we achieve obligations are met more by working collaboratively • Provide efficient and effective • We behave with integrity capital planning processes and maintenance programs • We attain excellence through creativity and innovation • Develop and implement efficient capital investment and operations • We celebrate our achievements programs and learn from our experiences • Minimise waste disposal and • We work with openness, maximise resource recovery. transparency and accountability. Our people Why we produced • Provide a safe and enjoyable work environment which brings out the this report best in people Melbourne Water’s Annual Report • Retain and attract a diverse, outlines how we have performed motivated, skilled and experienced in meeting our economic, social workforce and environmental responsibilities in 2004/05. It gives an overview • Encourage our people to develop of our performance in providing and share knowledge gained from a safe and reliable water supply, each other and stakeholders managing essential services • Implement a framework which such as sewerage and drainage, rewards employees’ performance protecting the environment, against the delivery of our working with the community and business objectives assisting the Victorian Government to achieve its policy objectives. • Ensure sustainable work practices. The Annual Report will be followed by Relationships a Sustainability Report, which outlines • Identify and meet customer service our strategies and initiatives for expectations ensuring a sustainable water future. • Develop enduring partnerships with We are committed to ensuring retail water businesses, developers the community is well informed and and other customers through open educated on the water cycle. and transparent communication The Annual Report is one of the • Build cooperation with all levels publications produced by Melbourne of government and regulators Water to achieve this goal. To view the report online, • Further develop programs to support visit melbournewater.com.au corporate social responsibility • Foster the exchange of knowledge with the community • Develop collaborative relationships with suppliers to gain support for our sustainability principles. 3 MW_AnnualReport_05_PDF.qxd 5/10/05 6:37 PM Page 4 Chairman and Managing Director’s report We are pleased to report that We substantially completed the • Improving environmental flows for Melbourne Water has had $160 million environmental improvement the Thomson and Macalister rivers. a successful year in meeting program at the Western Treatment Plant, The process and schedule for which increased our sewage treatment returning this water will be the challenges associated capacity to deal with growth, reduced determined in the Central Region with managing Melbourne’s greenhouse gas emissions and Sustainable Water Strategy water resources. facilitated recycling opportunities. • Working with City West Water, Our nitrogen discharge to Port Phillip Bay Stream flow into the main water supply industry, government and other was 2700 tonnes, which was better reservoirs during the year was 17% authorities to promote cleaner than the established target. Generating below average, and has been below production, and reduce the amount energy from biogases, a by-product of the long-term average for seven years. of salt coming into the Western sewage treatment, will eventually meet With this in mind, the Victorian Treatment Plant from industrial and 80% of the Plant’s energy needs. Government introduced permanent household waste by 10% water saving rules following the lifting Our infrastructure • Promoting the assignment of of Stage 2 restrictions in March 2005. Melbourne’s pooled source bulk water The water, sewerage and drainage entitlements to the retail water As part of our long-term planning, infrastructure we manage has a major businesses to strengthen the links we released a CSIRO report on the impact on the environment and public between management of water supply possible effects of climate change health. This year, we spent $182 million and demand. on our catchments and infrastructure. on projects to ensure this infrastructure An initial response to address the remains reliable, including substantial Underpinning all this work, and all work effects of climate change was the progress on replacing the ageing in the future, are the principles outlined announcement of the early Morang-Preston and Morang Outlet water in our strategy document, Sustainable recommissioning of Tarago Reservoir pipelines and lining and covering
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