Gwmwater Report 2014 15

Contents Report of Operations 2 About GWMWater 4 Understanding Our Business 5 Our Board 6 Organisational Structure 9 How We Operate 10 Our Employees 11 Occupational Health and Safety 12 Water Usage 13 Bulk and Environmental Entitlements 16 Recreation Water 21 Statement of Obligations 22 Economic Sustainability 23 Social Sustainability 25 Major Non-Residential Water Users 26 Environmental Sustainability 27 Sustainable and Resilient Water Services Systems 28 Management Strategies 29 Greenhouse Gas and Energy Emissions 30 Performance Reporting 34 Independent Auditor Report 40 Risk Management Compliance Attestation 42 Financial Statements 43 Financial Statutory Certificate 2015 94 Auditors Financial Report 95 Disclosure Index 97 Service Area Map (inside back cover) GWMWater Annual Report 2014/15 Page 1 Report of Operations GWMWater has enjoyed another successful year of its post pipeline an innovative relocatable package plant designed and constructed era, further improving its bottom line as well as delivering on the by local contractors. With the completion of these projects, 91 triple bottom line objectives of the Wimmera Mallee region. The percent of our urban customers now receive water that meets the Wimmera Mallee Pipeline is a project delivered by GWMWater that regulatory standards of the Safe Drinking Water Act. carried the economic, social and environmental aspirations of the region. The benefits of the project continued to be realised during In the lead up to the Victorian State election, the then opposition the year. identified Lake Toolondo as a premier trout fishery and sought to identify how the lake could have greater certainty of water supply. The improved security and quality of water continues to provide To provide sufficient time for these issues to be considered, confidence for investment in the region. Luv a Duck has expanded GWMWater facilitated a water trade of 5,000 ML between its operation in Nhill, taking advantage of the upgraded water Iluka Resources and VRFish which ensured that Lake Toolondo quality being supplied to that community. The improved security would have sufficient water to sustain the trout fish population has also been the catalyst for investing in and assuring the for 2014/15. Joe Helper was appointed Chair of the Toolondo viticulture industry of the Landsborough Valley. Commitments Reservoir Recreational Fishing Advisory Group. Under its charter have also been made to expand the rural pipeline network to the the group is responsible for considering options that would enable farming communities of Pella and Quambatook North for stock the lake to have greater certainty of water supply consistent with and domestic purposes. its premier trout fishery status. The social fabric of the region has been enhanced by a piped Since 2010/11 the Wimmera Mallee region, including the Grampians water supply to nominated recreational lakes. These lakes provide catchment, has returned to a dry climate cycle. 2014/15 was the a point of communal gathering and have considerably enhanced driest year experienced since 2010/11 with the system receiving the liveability of the region. The coverage of recreation lakes only 27 percent of historic average inflows. From July 2014 across the area previously commanded by the channel network very little rainfall was experienced and as at 30 June 2015 the is now complete with the establishment of Walkers Lake as an Grampians reservoirs were holding a combined volume of 156,613 alternative to Lake Batyo Catyo and the success of the Ouyen ML or 28.1 percent. This is their lowest level at the time of this Lake proposal as an alternative to Lake Walpeup. GWMWater report since completion of the physical infrastructure of the has secured sufficient water in its recreation water allocation to Wimmera Mallee Pipeline in 2010. Access to carryover provides supply water at a subsidised rate using funds generated by the considerable certainty about water supply in coming seasons, Recreation Contribution Charge. but medium to long term reliability will be the subject of further assessment using the most recent climate science information. The environment has continued to be enhanced by the environmental watering program. The Wimmera and Glenelg Whilst construction of the Wimmera Mallee Pipeline is complete, Rivers received water in accordance with the environmental GWMWater has been fulfilling its commitment by delivering watering program developed by the Victorian Environmental projects that are agreed by the State and Commonwealth to Water Holder, in consultation with the Wimmera and Glenelg be consistent with the objectives of pipelining initiatives in the Catchment Management Authorities. Whilst the primary objective region. The decommissioning of the Wimmera Irrigation System of this program is environmental, water in the rivers also provides nominated by the Commonwealth government was completed in an environment for events such as the Dimboola Regatta and 2014/15. Contracts were awarded for Stage 1 of the Rural Pipeline the Horsham Fishing Competition. In 2014/15 the economic Intelligence Project that will see low cost telemetry installed on contribution of environmental water was enhanced by a payment all rural meters serviced by the pipeline network. Contracts were for the infrastructure used to deliver the environmental watering also awarded for the completion of the firefighting infrastructure program. project following agreement with the state government that this project was consistent with the original objectives of the Wimmera Donald, Wycheproof, Minyip, Rupanyup and Jeparit were all Mallee Pipeline Project. beneficiaries of water quality upgrades delivered during the year, utilising existing water treatment plant capacity in neighbouring towns. Our water quality improvement program was further enhanced by the upgrade of water quality in Quambatook using Page 2 GWMWater Annual Report 2014/15 Urban water consumption of 9,345 ML in 2014/15 was consistent with water consumption in 2013/14. This is 30 percent greater than urban consumption prior to the completion of the Wimmera Mallee Pipeline when most urban centres were subject to Stage 4 restrictions. The improved reliability of water supply has significantly enhanced the liveability of the region. This is indicative of the extent that rural domestic and stock customers are more reliant on pipeline water and the return to livestock production as an integral part of rural agricultural activities. The overall financial viability of GWMWater improved significantly in 2014/15. Free cash flow from operations was $21.6 million, $5.3 million better than the $16.3 million recorded in 2013/14. This result has been influenced by a combination of stronger operating revenue and improved operating efficiency. The improved viability is best demonstrated by the improved interest cover ratio which has increased from 2.8 times in 2013/14 to 3.4 times in 2014/15. The Wimmera Mallee region has a strong agricultural base that is primarily broad acre cereal production. By virtue of the pipeline solution and the improved reliability of the water supply, there has been a shift back to livestock. The opportunities identified by the business cases for pipelining solutions have started to be realised. Intensive agriculture, particularly in relation to poultry production, has expanded. The mineral sands developments are well advanced and viticulture opportunities have also been secured. The climate science that underpins the assessments of likely future of the Wimmera Mallee region under climate change will continue to present challenges for water supply management. We will continue to work with government and key stakeholders to ensure that these implications are well understood, and that we develop adaptive strategies to secure supply for the competing demands for water as well as reducing our carbon footprint. Peter Vogel Chairman Mark Williams Managing Director GWMWater Annual Report 2014/15 Page 3 About GWMWater Who We Are Grampians Wimmera Mallee Water Corporation (trading as GWMWater) is a government-owned Statutory Corporation established on 1 July 2004 under the Water Act 1989. The Hon Peter Walsh MLA, Minister for Water was the responsible Minister for the period 1 July 2014 to 3 December 2014. The Hon Lisa Neville MP, Minister for Environment, Climate Change and Water was the responsible Minister for the period 4 December 2014 to 30 June 2015. GWMWater has one of the largest geographic footprints of all Victorian water businesses, covering some 62,000 square kilometres or 25 percent of Victoria. The service area is similar in size to Tasmania and includes thirteen municipalities in full or in part. We service approximately 72,000 people living either on farms or in one of 71 urban centres across western Victoria. What We Do GWMWater is a vertically integrated water business directly involved in all aspects of the water cycle. We operate water and wastewater treatment plants in many of our 71 towns, utilise desalination technology, recycle 100 percent of wastewater and run pipelines, major storages, dams, weirs and pump stations to service our customers. We have responsibility under the Wimmera Glenelg Bulk Entitlement Order to perform the functions of resource manager and storage manager. GWMWater is also resource manager for groundwater and surface water and associated licencing. Our large service area presents major challenges in the provision of water and wastewater services. We harvest water in the Grampians, via groundwater

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