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Melbourne Water Business Review MELBOURNE WATER BUSINESS REVIEW 2001/02 Front cover: Upper Yarra Reservoir; native grasses at Western Treatment Plant; water supply maintenance works at Tacoma Road, Park Orchards Melbourne Water Business Review 2001/02 1 MELBOURNE WATER BUSINESS REVIEW Contents Melbourne Water charter 2 Chairman and Managing Director’s report 3 Financial results 6 Managing our natural and built assets 8 Managing risk 16 Our customers 18 Planning for a sustainable future 24 Our people 31 Our commitment to the community 36 Corporate governance 40 Financial statements 45 Statement of corporate intent 69 Statutory information 72 – Publications 72 – Consultants 72 – Government grants 72 – National competition policy 72 – Freedom of Information 72 – Privacy legislation 73 – Energy and Water Ombudsman 73 – Whistleblowers protection and procedures 73 – Organisational chart 80 2 Melbourne Water Business Review 2001/02 Melbourne Water charter Melbourne Water is owned by the Victorian Government. We manage Melbourne’s water supply catchments, remove and treat most of Melbourne's sewage, and manage waterways and major drainage systems. Our drinking water is highly regarded by the community. It comes from protected mountain ash forest catchments high up in the Yarra Ranges east of Melbourne. We are committed to conserving this vital resource, and to protecting and improving our waterways, bays and the marine environment. We recognise our important role in planning for future generations. Our vision is to show leadership in water cycle management, through effective sustainable and forward-looking management of the community resources we oversee. We are a progressive organisation that applies technology and innovation to achieve environmentally sustainable outcomes. The business objectives established to realise our vision are to: – provide excellent customer service – operate as a successful commercial business – manage Melbourne’s water resources and the environment in a sustainable manner – maintain the trust and respect of the community. We also appreciate that achievements occur through the contribution of our people and through our values. We are people who: – recognise that we achieve more by working with others – feel privileged to be the custodians of our water resources – behave with integrity – attain excellence through creativity and innovation – celebrate our achievements and learn from our experiences. At Melbourne Water, we understand that engaging our stakeholders is the key to achieving our vision of leadership in water cycle management. Melbourne Water is a statutory authority. The responsible minister is the Minister for Environment and Conservation, the Honourable Sherryl Garbutt. Melbourne Water Business Review 2001/02 3 Chairman and Managing Director’s report Melbourne's protected We are pleased to report that Melbourne Water had a busy, water supply catchments to the north and east challenging and successful year. Our financial results were of the city cover some 140,000 hectares, most strong and we invested more than $98 million in upgrading of which is Mountain Ash forest. water supply, drainage and sewerage infrastructure. Considerable progress was also made on initiatives to protect and improve Melbourne’s waterways and the marine environment, and to ensure the sustainable use of our energy and water resources. 4 Melbourne Water Business Review 2001/02 Chairman and Managing Director’s report We participated in the development of key Victorian Protecting our waterways Government initiatives such as the Water Resources Strategy, Working in partnership with councils and other stakeholders, the Werribee Plains Vision, the Infrastructure Planning Council $5.5 million was invested to improve and protect our waterways report, the Metropolitan Strategy and the move to economic and $1.6 million was provided for a community partnership regulation of our business. to fence out livestock and revive rural waterways. More than The following is a snapshot of our performance during 200,000 native trees and shrubs were also planted. the year. A further eight stormwater management plans were initiated with councils to enable them to identify projects to protect our Meeting the challenge of prolonged drought waterways and bays from pollution. There are now 20 plans After six years of dry weather, inflows into Melbourne’s water in place. Each participating council has been provided with storages continued to be below average. During the year, with $20,000 as part of a $600,000 program. our retail water customers, we reviewed our joint industry Six councils worked with us to improve environmental Drought Response Plan, and developed a Drought Response practices at building sites to reduce stormwater pollution Protocol and Storage Recovery Plan. flowing to waterways and bays. The community responded positively to education and Stakeholders, including four councils and environmental information on water conservation and this, combined with organisations, were involved in a $2.6 million project to a cool summer, helped reduce Melbourne’s water consumption reduce litter and stormwater pollution in the Moonee Ponds to six per cent below the annual average for the past five years. Creek catchment. Melbourne Water is contributing $1 million to this project. Planning for a sustainable future Recycling 20 per cent of the effluent produced at our sewage Protecting the marine environment treatment plants by 2010 is our target and significant progress Melbourne Water is committed to achieving substantial in water recycling initiatives was achieved during the year. reductions in nitrogen discharge to our waterways and Port A successful demonstration trial of on-site water recycling Phillip Bay. One of the most significant capital works projects was run in conjunction with the City of Melbourne and the was the continuation of a $124 million environmental upgrade Department of Infrastructure in which sewage was pumped of our Western Treatment Plant at Werribee. The first major directly from a sewer main in South Yarra to a membrane- phase of this project won an environmental excellence award technology treatment plant. The treated water was used to from the Institution of Engineers (Victoria). irrigate a section of the King’s Domain gardens. Similar systems The upgrade, together with the construction of stormwater could be used to irrigate parks and gardens around Melbourne. treatment wetlands across Melbourne, is designed to reduce A positive start was made on a $30 million project to use nitrogen loads to Port Phillip Bay by 1000 tonnes annually. biogas – a by-product of the sewage treatment process – Seven wetlands were completed that will reduce annual nitrogen to generate our own electricity and reduce energy costs and loads to the Bay by 17 tonnes. greenhouse gas emissions by 24,500 tonnes a year at the Eastern The first stage of an ammonia reduction project was Treatment Plant. Using biogas enables us to replace imported completed at the Eastern Treatment Plant at Bangholme to electricity and minimise the use of diesel fuel at the plant. improve the quality of effluent discharged to Bass Strait. We We played a lead role in developing the Victorian developed a comprehensive sustainable resource management Government’s Water Resources Strategy – a blueprint for plan to upgrade the Eastern Treatment Plant. This $170 million managing Melbourne’s water resources to 2050 and beyond. plan, which followed extensive scientific research and Melbourne Water made a financial commitment of $800,000 community consultation, involves reducing flows to the plant, to this significant project. Other partners included the retail upgrading treatment and increasing water recycling. The water companies, the Department of Natural Resources and innovative plan is designed to protect the marine environment Environment, councils, the Australian Conservation Foundation, and provide increased opportunities for water recycling. It will the CSIRO and the Victorian Council of Social Services. providea case study for world’s best practice in sewage treatment plant operations. Melbourne Water Business Review 2001/02 Chairman and Managing Director’s report 5 Serving our customers Our financial results Our retail customers, City West Water, South East Water and We recorded strong financial results, with an operating revenue Yarra Valley Water, were supplied with 462,322 million litres of $480.2 million, which exceeded our plan by $10.2 million. of water during the year. Water was also supplied to Gippsland Our free cash flow of $310.4 million enabled us to invest Water, Southern Rural Water and Western Water. Samples $98.1 million in assets for the future, reduce our debt by taken of this water showed that 100 per cent was free of E. Coli $47.5 million and pay taxes and dividends of $106.5 million bacteria, exceeding our target of 98 per cent and national to our owner, the Victorian Government. Operating expenses guidelines. (before interest and income tax) were $218.2 million, which was lower than our plan by $8.2 million. Net profit after Health, safety and risk management tax was $130.3 million, which was better than our plan The Winneke Water Treatment Plant at Christmas Hills by $8.2 million. became Victoria’s first major hazards facility to gain a licence to operate under new Victorian Occupational Health and Our people Safety (Major Hazard Facilities) Regulations. The plant We would like to acknowledge the hard work and expertise stores liquefied chlorine gas to disinfect drinking
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