Enhancing Life and Liveability

Melbourne Water Annual Report 2 011–12 Contents

Overview 1 Chairman and Managing Director’s Report 2-3 Service delivery: 4 > Water 6 > Alternative water sources and Integrated water management 14 >  20 > Waterways 26 Corporate: 32 > Environmental stewardship 34 > Relationships 42 > Financial sustainability 46 > Organisational capability 54 Financial Report 58 Performance reporting 112 Statutory information 121 Overview

About us

Melbourne Water is owned by the Victorian Government. We manage catchments, treat and supply drinking and recycled water, remove and treat most of Melbourne’s , and manage waterways and major drainage systems in the and Westernport region. We consider social, environmental and financial effects and short-term and long-term implications in all our business decisions. Our customers include the metropolitan water retailers, other water authorities, land developers and businesses that divert river water. The 1.8 million households who receive waterways and drainage services are also our customers. We deliver our services in partnership with others including government agencies, local councils, catchment authorities, contractors and suppliers.

About this report Accessibility Melbourne Water’s Annual Report 2011–12 describes An accessible text format of this report is available on our our annual progress towards achieving our new vision of website at melbournewater.com.au. If you require this report, Enhancing Life and Liveability in the greater Melbourne region, or sections of it, in a different accessible format, please contact and how we met our regulatory obligations from 1 July 2011 Melbourne Water on 131 722 in , (03) 9679 7100 if calling to 30 June 2012. The Honourable Peter Walsh MLA, Minister for from interstate or email [email protected] Water, was the Minister responsible for Melbourne Water from 1 July 2011 until 30 June 2012. Our strategic guide The report reviews our performance against key performance Melbourne Water launched its new Strategic Direction indicators (KPIs) detailed in our Corporate Plan and KPIs that in March 2012. meet Ministerial Reporting Directions. We also report against sustainability or water industry-based indicators including Our new vision Enhancing Life and Liveability outlines The Global Reporting Initiative (GRI): Sustainability Reporting Melbourne Water’s commitment to do its part to improve Guidelines. The GRI Content Index and our Independent Assurance the quality of life within the greater Melbourne region. Statement are available on our website melbournewater.com.au The document guides and informs our decisions towards achieving this vision. Online document Melbourne Water’s Strategic Direction is available on As part of Melbourne Water’s commitment to sustainability, our website melbournewater.com.au a limited number of copies of this report will be printed (with 80 designated for the Victorian Parliament). An online version will be available on the Melbourne Water website melbournewater.com.au

Melbourne Water Annual Report 2011–12 1 Managing Director’s Report

The continued wet weather pushed water storages from 55.8% to 70% full for the first time since January 1998, which represented an increase of 257.8 billion litres in 2011–12.

The past year has been a combination of Rainfall in the major catchments in 2011–12 We are also close to finishing the delivering our core services, projects and was just over 30% above average, which Frankston Drainage Improvement project – maintenance programs and formalising delivered both the opportunity for storages the biggest single project we have to continue the recovery from long-term undertaken to improve flood protection. our vision for the integrated water future drought and the challenge of managing the The final stage of the $73M project, which of our city and region. disruptive impacts of flooding. began in 2009, is due to be completed in January 2013, and will better protect The release of our new Strategic Direction The continued wet weather pushed water Frankston (one of Melbourne’s lowest-lying in March was a big step in consolidating storages from 55.8% to 70% full for suburbs) from serious flooding during our work in recent years to progress the first time since January 1998, which severe wet weather. integrated water management from a represented an increase of 257.8 billion concept to a reality. litres in 2011–12. Remarkably, storages We were proud and humbled on several dropped just 0.1% over summer and occasions in 2011–12 to receive recognition The Strategic Direction and vision – autumn (a period in which they typically from our industry peers. Most notably, the Enhancing Life and Liveability – is largely shed 8%) due to unseasonably high rainfall. was runner-up in the prestigious underpinned by integrated water International River Prize, a great testament management and the fundamental The past 12 months has seen us draw close to the efforts of our Waterways team – approaches of a heightened customer to the culmination of an unprecedented who are excited to be hosting this year’s focus and need to increase collaboration era of capital investment in the International River Symposium where our with water retailers, local and State region’s water, sewerage and drainage city’s rivers and creeks will be showcased Government and the community to infrastructure. on the world stage. achieve shared outcomes. Two highlights were the completion of Other achievements included receiving The State Government’s newly formed the Northern Sewerage Project, to cater the International Association for Public Office of Living Victoria provides the for the rapidly growing northern suburbs Participation’s Organisation of the Year framework to achieve and deliver a shared and protect local waterways, and the (Australasia), which was well deserved water management vision. Melbourne Main Sewer Replacement which recognition for the work our people involved renewing the original 100-year- A constructive culture is critical to the have done through our Stakeholder old pipeline that serves Melbourne’s CBD delivery of our Strategic Direction, and a and Engagement Strategy, and winning and Docklands. review during the year demonstrated that the United Nations Association of we have a solid platform to strengthen We also entered the final phase of the ’s ‘Leadership in Sustainability our commitment to a safe workplace, $418M upgrade of the Eastern Treatment (large business)’ award for our corporate customer service and innovation. Plant in Melbourne’s south-east, which sustainability programs and achievements. will significantly improve the quality of Our people are our greatest resource the plant’s environmental discharge and and – through our Zero Harm philosophy increase the standard of recycled water – their safety is our highest priority. It produced at the plant to enable a far was with great sadness and shock that greater range of potential uses. When we experienced a workplace fatality at finished at the end of 2012, the upgrade the in December. will transform the plant into one of the The death of one of our colleagues Shaun Cox most sophisticated large-scale sewage brought home, in the most devastating Managing Director treatment facilities in the world. way, the importance of our unwavering commitment to safety.

2 Melbourne Water Annual Report 2011–12 Chairman’s Report

In its drive to improve customer service, the organisation undertook a comprehensive review of how the business understands and interacts with its customers and used these findings to develop and implement a new Customer Strategy.

The release of the organisation’s The Yarra River received the first of In 2009, the Essential Services Commission new Strategic Direction and vision, its reinstated environmental flows in (ESC) determined Melbourne Water’s prices Enhancing Life and Liveability, September. Flows of up to 200 million for 2009–10 to 2012–13, which accounted litres per day were released into the for the revenue needed to recover forecast in March was a 2011–12 milestone. river below the Upper Yarra – obligatory payments for the cost of the The Strategic Direction outlines the a significant increase from the regular desalination plant in 2011–12 and 2012–13. daily flow of 10 million litres per day. progression toward integrated water resource Delays in commissioning the plant meant management: planning and delivering water There was further good news for the we were not required to make these supply, waterways and sewage services health of Melbourne’s waterways in July payments in 2011-12, which resulted holistically and increasing the diversity with the establishment of the Victorian in the revenue collected from customers of water supplies including the use of Environmental Water Holder, a new being higher than our costs. Our draft stormwater, recycled water and desalinated independent statutory body that decides plan for the next five-year pricing water to cater for a growing population. on the best use of Victoria’s environmental period (2013–14 to 2017–18) outlined Integrating this water management water entitlements, helping protect the our intention to return this revenue approach with the design and development environmental values of Victoria’s river to customers, but it was clear from of communities provides multiple benefits systems and . community feedback that customers wanted the funds returned sooner. including the provision of alternative In 2011–12, Melbourne Water delivered fit-for-purpose water, more green open $547.1M of capital works including In response to customer concerns, spaces and healthy waterways and bays the completion of two major sewerage Melbourne Water has committed to for recreation and relaxation. projects critical to catering for the region’s returning the funds collected to customers Customers’ needs and expectations are growing population and protecting the as soon as possible, in conjunction with central to the organisation, and there health of waterways. the metropolitan water retailers and with oversight from the ESC. is always room for improvement in the The Northern Sewerage Project, a joint way services are delivered. In its drive to project with which I thank the Board and staff for all their improve customer service, the organisation began in 2007, was completed in work during 2011–12. undertook a comprehensive review of November, six months ahead of schedule how the business understands and and under budget. The replacement of In accordance with the Financial interacts with its customers and used a section of a century-old sewer main Management Act 1994, I am pleased to these findings to develop and implement from Port Melbourne to Docklands was attest that Melbourne Water Corporation’s a new Customer Strategy. completed on time in June 2012 and Annual Report 2011–12 is compliant with all statutory reporting requirements. This extensive process involved customer under budget. consultation which resulted in nearly With regard to our financial performance 4,000 sources of feedback, which proved in 2011–12, total cash returns to our invaluable in framing the strategy. shareholder were $289.3M ($173.1M in 2010–11). Net profit after tax was $269.9M ($157.8M in 2010–11). This includes $225M of revenue in early recovery of costs associated with construction of the Victorian Eleanor Underwood Desalination Plant (VDP). Chairman

Melbourne Water Annual Report 2011–12 3 Service delivery

6 Water 14 Alternative water sources and Integrated water management 20 Sewerage 26 Waterways

4 Melbourne Water Annual Report 2011–12 Our Aim Provide services that are valued by our customers.

We will do this by: > Providing high-quality, safe and reliable drinking water and fit-for-purpose water from alternative sources > Providing safe sewage transfer, treatment and disposal > Protecting and enhancing the health and amenity of waterways and bays > Managing flood risk > Adapting our assets to address climate change and variability > Planning, operating and maintaining our built and natural assets efficiently by incorporating innovative and whole-of-life system approaches > Providing for continuity of service by improving the way we plan for, respond to, and recover from extreme events.

Melbourne Water Annual Report 2011–12 5 Service delivery Water

6 Melbourne Water Annual Report 2011–12 Key Achievements

>> Met water quality targets >> Continued to develop the >> Worked with the Victorian for turbidity, aluminium and draft Water Supply Demand Government and water disinfection by-products Strategy for Melbourne retailers to review water >> Supported the Victorian in collaboration with the restriction schedules and Government’s Ministerial Victorian Government Drought Response Plans, and Advisory Council (MAC) to and metropolitan water developed an adaptive annual deliver on its vision of Living retailers, and in consultation Water Outlook approach Melbourne Living Victoria with the community based on lessons learnt during to improve the liveability >> Collaborated with the recent long drought of Melbourne and Victoria’s stakeholders to provide >> Continued to work with key regional cities through better advice on the desalination stakeholders and climate planning and management of water order volumes researchers to improve urban water systems supported by innovative our understanding of the optimisation modelling tools impacts of climate change and variability, including completion of a business- wide Climate Change Adaptation Action Plan

Disappointments Challenges

>>Failed to meet our target of less than >>Integrating desalinated water into >>Working with water retailers, 1% for measurable transfer losses of Melbourne’s water supply system to local councils and the development total water delivered (recording 1.27%), ensure customers continue to receive industry to generate integrated mainly due to an increase in operational high quality and reliable drinking water water management solutions losses (to maintain water quality objectives >>Maximising water from traditional >>Continuing research and assessment and test protocols which will result in catchments and while continuing of the impact of seasonal climate reduced losses in subsequent years) and to diversify our water sources including outlooks and long-term climate a tank and reservoir cleaning program stormwater and recycled water change projections on hydrology >>Failed to bring online >>Working with water retailers to develop >>Working with stakeholders to adapt our as a backup to other due to the annual Water Outlook and Action assets to climate change and variability water quality issues Plans to build Melbourne’s water supply security and resilience >>Working with the newly formed Office of Living Victoria, water retailers and stakeholders to review the draft Water Supply Demand Strategy and develop Melbourne’s first Metropolitan Integrated Water Cycle Strategy

Melbourne Water Annual Report 2011–12 7 Service delivery Water

Our water supply system Monthly average rainfall at Melbourne’s major harvesting reservoirs Melbourne Water’s supply system comprises: >>157,000 hectares of protected catchments in the Yarra Ranges MONTH) / MONTH) >>10 reservoirs with a total capacity of / 1,812 billion litres

CONSUMPTION (%) >>34 water treatment plants STORAGE VOLUME (%) RAINFALL (M M

>>1,062 kilometres of water mains STREAMFLOW (M L >>214 kilometres of aqueducts YEAR ML PER DAY >>64 service reservoirs. YEAR YEAR

Managing demand and supply Monthly average streamflow at Melbourne’s major harvesting reservoirs Storages continue to rise Good rainfall continued to boost our water storages in 2011–12 which reached 70% full for the first time since January

1998. Total reservoir storage was 55.8% MONTH) / MONTH)

/ or 1,010.9 billion litres at 1 July 2011, and this increased to 70.0% or 1,268.7 billion litres at 30 June 2012. Minor Plant Fuels (5.8%) Natural Gas (7.1%) CONSUMPTION (%) STORAGE VOLUME (%)

RAINFALL (M M Rainfall and streamflow in Melbourne’s Generated Electricity (16.7%) Vehicle Fuels (3.5%) catchments are significantly impacted by STREAMFLOW (M L climatic variations. Heavy rain coincided YEAR WTP ExpMLo PERrt (0.7 DAY%) Imported Electricity (38.0%) YEAR with back-to-back La Niña events in YEAR Hydro Renewable 2010–11 and 2011–12 with rainfall in Generated (3.2%) (24.2%) the major catchments in 2011–12 being 9.5% to 52.7% above average, with the Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) catchment weighted average being 31.2% Melbourne’s water storage above the long-term average. Due to increased rainfall and wet catchments, streamflow into the major harvesting reservoirs in 2011–12 was MONTH) / 27.2% above the long-term average. MONTH) / While this is lower than the 42.6% above average streamflow recorded in a very wet Minor Plant Fuels (5.8%) Natural Gas (7.1%)

CONSUMPTION (%) 2010–11 (the highest since 1993–94), the STORAGE VOLUME (%)

above average rainfall and streamflow saw RAINFALL (M M Generated Electricity (16.7%) Vehicle Fuels (3.5%) Melbourne’s total reservoir storage volume STREAMFLOW (M L holding steady over the 2011–12 summer/ WTP Export (0.7%) Imported Electricity (38.0%) autumn period. Storages started summer at YEAR ML PER DAY YEAR YEAR Hydro Renewable 65.1% (1,179.8 billion litres) and finished Generated (3.2%) Biogas (24.2%) autumn at 65.0% (1,178.6 billion litres). Storages typically decline around 8% over While the total storage volume has from 41.3% on 1 July 2011. The last time Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) the six-month summer/autumn period. increased significantly over the past couple Thomson Reservoir was at this volume was of years, it is still recovering from years in March 1998. of below average inflows between 1997 and 2009, which was characterised by two Climate variability and climate change severe droughts in 1997 and 2006. have a significant influence on Melbourne’s storage volumes, so Melbourne Water The Thomson Reservoir, which represents supports an active research program to about 60% of the total storage capacity improve understanding of climate risks availableM toinor Melbourne,Plant Fuels (5.8% )is the main and guide water managementNatural Gas and(7.1% )climate drought reserve. At the end of 2011–12, change adaptation across the business. Thomson Reservoir had recovered to 63.7%, anGen increaseerated Electr icofity more(16.7%) than 22% Vehicle Fuels (3.5%)

WTP Export (0.7%) Imported Electricity (38.0%) Hydro Renewable Generated (3.2%) 8 Melbourne Water Annual Report 2011–12 Biogas (24.2%)

Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) At the end of the 2011–12 year, Thomson Reservoir had recovered to 63.7%, an increase of more than 22% from 41.3% on 1 July 2011.

Melbourne Water water supply system

Goulburn River YEA N

TOOROURRONG RESERVOIR

YAN YEAN RESERVOIR WESTERN WATER O'SHANNASSY (Sunbury) RESERVOIR MAROONDAH RESERVOIR

SUGARLOAF RESERVOIR WESTERN WATER YARRA VALLEY WATER (Melton) THOMSON RESERVOIR MELBOURNE

SILVAN RESERVOIR CITY WEST WATER SOUTHERN RURAL WATER (Macalister District)

CARDINIA RESERVOIR

GIPPSLAND WATER (Neerim South)

Port Phillip Bay GIPPSLAND WATER SOUTH EAST WATER (Warragul)

Yea-Sugarloaf pipeline Water supply pipeline, aqueduct

French Water supply storage reservoir Island Water supply catchment area

Bass Strait Retail water area boundary Phillip Island

Annual streamflow at Melbourne’s major harvesting reservoirs (Upper Yarra, Thomson, Maroondah and O’Shannassy Reservoirs)

1,200 Long-term Average 2006–07 inflows (610.5 GL pa) lowest on record (180.0 GL) 1,000

1997–2011 Average (417.5 GL pa) 800

600

400 INFLOW TO STORAGE (GL) STORAGE TO INFLOW

200

0 1913/14 1916/17 1919/20 1922/23 1925/26 1928/29 1931/32 1934/35 1937/38 1940/41 1943/44 1946/47 1949/50 1952/53 1955/56 1958/59 1961/62 1964/65 1967/68 1970/71 1973/74 1976/77 1979/80 1982/83 1985/86 1988/89 1991/92 1994/95 1997/98 2000/01 2003/04 2006/07 2009/10

YEAR

Melbourne Water Annual Report 2011–12 9 Service delivery Water

Challenges of wetter weather Average daily water use for Melbourne

100% The main challenge of prolonged wetter 200 150,00 36.6% Yarra Valley Water 133,918 ML weather conditions lies in managing all the 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 water supply sources to ensure recovery of RAINFALL 2011–12 75% storages and security for future droughts. 150 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 MONTH) /

01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH)

50% Water can be transferred between some / 100 75,000 0.1% Gippsland Water 287 ML storages, but it still isn’t viable to connect 2010–2011 963 ML all storages together due to factors 01 JUL 2010 TO 30 JUN 2011 50,000 25% 50 CONSUMPTION (%) 26.4% 96,338 ML including elevation, distance and the STORAGE VOLUME (%) 2011–2012 25,000 frequency of extra harvesting availability. 998 ML RAINFALL (M M 01 JUL 2011 TO 30 JUN 2012 STREAMFLOW (M L 0% Some water also needs to be set aside 0 1.4% Western Water 5,108 ML 0 JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN for09 J ANenvironmental 10 JAN 11 JAN 12 flows. 0 250 500 750 1000 1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 100% TOTAL CONSUMPTION 365,559 ML YEAR ML PER DAY YEAR YEAR Other challenges include: >>Water quality in major storages and the impact storms have on existing water 2011–12 Retail water consumption quality by increasing sediment loading 100% 200 150,00 >>Lower water consumption, which 36.6% Yarra Valley Water 133,918 ML 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 results in lower flow velocity and RAINFALL 2011–12 increased sediment layers in pipework 75% 150 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 across Melbourne. Future drier weather MONTH) /

01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH)

conditions may result in sudden 1400 120050% 1000 / 100 75,000 0.1% Gippsland Water 287 ML sediment dispersal, causing turbidity 2010–2011 963 ML 1200 1000 50,000 events and customer complaints 800 01 JUL 2010 TO 30 JUN 2011 Minor Plant Fuels (6%) Vehicle Fuels (3%) Minor Plant Fuels (5.8%) Natural Gas (7.1%) 25% 50 CONSUMPTION (%) 26.4%1000 City West Water 96,338 ML STORAGE VOLUME (%) 800 2011–2012 25,000

998 ML RAINFALL (M M >>Greater spilling events of smaller 600 800 Other revenue Other expenses STREAMFLOW (M L Generated Electricity (16.7%) Vehicle Fuels (3.5%) 01 JUL 2011 TO 30 JUN 2012 Water (14%) Sewerage (76%) storages (Maroondah and O’Shannassy 6000% 0 1.4% Western Water 5,108 ML Biological assets revenue Finance costs 0 Reservoirs) resulting in flooding and 600 Developer charges, JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 400 0 250 500 750 1000 Administrative1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 contributions & 400 WTP Export (0.7%) Imported Electpublicricity (38 .0perception%) of lost harvest 100%400 TOTAL CONSUMPTION 365,559 ML YEAR Water ML PER DAY Repairs & maintenance YEAR YEAR Other (1%) contributed assets 200 >Hy>dMelbournero Renewable Water has been able to Waterways charges 200 Sewerage Employee benefits Generated (3.2%) 200 Biogas (24.2%) offset some of its large power usage by Bulk sewage services Drainage Operational 0 operating several mini hydro-electricity Melbourne 0Water and the three Residential daily per capitaBulk water water services 0 Corporate Depreciation & amortisation 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 Shaft Diesel (0.3%) Hydro Recovered Genplants,erated (0.6% which) use the normal transfer of metropolitan water retailers collaboratively consumption for Melbourne in 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 water into service reservoirs to generate developed a process to provide advice was 149 litres compared to 140 litres in power. Lower demand for water caused to the Victorian Government’s 2012–13 2010–11. by wetter conditions has resulted in annual desalination water order. lower flows, which are less than the Melbourne Water led the development of Melbourne Water met water quality flows required to operate the generators. innovative optimisation modelling tools to targets for turbidity, aluminium and support this advice. Further improvements disinfection by-products in 2011–12. 1400 1200 1000 Preparing for desalination will be made to these tools to provide We work closely with the water retailers to 1200 1000 input toM theinor Pl2013ant Fue lsdesalinated (6%) water order. Vehicle Fuels (3%) Minor Plant Fuels (5.8%) Natural Gas (7.1%) 800 The Victorian Desalination Plant is being consistently meet stringent requirements in 1000 800 developed by the Victorian Government the distribution of safe, high quality water. 600 800 Other revenue Other expenses in conjunction with the AquaSure Generated Electricity (16.7%) Vehicle Fuels (3.5%) Water Wconsumptionater (14%) and quality Sewerage (76%) Biological assets revenue 600 Finance costs consortium. When complete, the plant Melbourne’s water supply system is 600 Developer charges, 400 Administrative Melburnians continued to conserve managed according to Hazard Analysis and contributions & 400 will enable three more regional water WTP Export (0.7%) Imported Electricity (38.0%) 400 Water Repairs & maintenance water inOther 2011–12, (1%) with low average daily Critical Control Point (HACCP) principles, contributed assets authorities to be connected to Melbourne’s Hydro Renewable Waterways charges Sewerage 200 Employee benefits consumption of 998 million litres per day. 200 200 water supply system. , South which uses audits and accreditation Generated (3.2%) Bulk sewage services Drainage Operational This is lower than the 1,029 million litres Biogas (24.2%) Gippsland Water and Westernport Water to ensure quality management from 0 Bulk water services 0 Corporate 0 Depreciation & amortisation will be able to increase the security of average daily consumption in the last five collection, treatment and distribution Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 their supply by accessing the Melbourne years, and significantly lower than the to customers. system when required. They will join 1,320 million litres per day in the 1990s. Melbourne Water’s existing customers of While consumption has increased City West Water, South East Water, Yarra compared to the 963 million litres per Valley Water, Western Water and Gippsland day in 2010–11, this may be attributed Water. Therefore, integrating the Victorian to a combination of lower monthly total Desalination Plant into Melbourne’s rainfall, higher average monthly maximum water supply system will involve new temperature and more hot days (above institutional arrangements as well as 30°C) over the 2011–12 summer as well physical assets. as easing of restrictions from Stage two to Stage one from 1 December 2011.

10 Melbourne Water Annual Report 2011–12 This year’s consumption of 365,559 million litres is similar to levels last seen in the early 1970s

Financial year consumption

600,000

500,000

400,000

300,000

200,000

100,000 CONSUMPTION (ML/year)

0 2003 – 2004 1951–1952 1955 – 1956 1959 – 1960 1963 – 1964 1967 – 1968 1971 – 1972 1979 – 1980 1987 – 1988 1991 – 1992 1995 – 1996 1999 – 2000 2007 – 2008 2011 – 2012 1983 – 1984 1975 – 1976

YEAR

Retail water consumption Environmental sustainability Water Supply Demand Strategy Melbourne Water supplied 365,559 million Sustainable water use The Water Supply Demand Strategy litres of drinking water to the water (WSDS), developed jointly by Melbourne retailers in 2011–12. This compares with Melbourne Water supported and is Water, South East Water, City West 351,761 million litres in 2010–11 and working with the Victorian Government’s Water and Yarra Valley Water, is a 50-year 361,362 million litres in 2009–10. Ministerial Advisory Council (MAC) to strategy for balancing the supply of and help deliver its Living Melbourne Living demand for water in Melbourne. This This year’s consumption of 365,559 million Victoria vision to improve the liveability strategy is one of the key inputs into our litres is similar to levels last seen in of Melbourne and Victoria’s regional cities next Water Plan which sets out funding the early 1970s (refer to ‘Financial Year through better planning and management for the upcoming regulatory period Consumption’ graph). of urban water systems. The benefits of (commencing 2013–14). these changes include healthier urban Water restrictions eased waterways, greener open spaces, reduced Throughout 2011–12, work continued urban heat island effect, future water on a new WSDS, including a community Increased water supply reserves led the security, and less reliance on rural water. Victorian Government to ease Melbourne’s research project to better understand the water restrictions from Stage two to Stage needs of Melburnians, and investigations A MAC Implementation Plan recommends of potential water efficiency opportunities one on 1 December 2011. This included changes to the way water is managed to increased watering times for and and sources of fit-for-purpose water as part ensure Melbourne’s future water needs are of integrated water cycle management. council sporting grounds, and allowing met, in the face of continued population lawn watering which was prohibited in growth and an uncertain climate. The new WSDS will be reviewed during Stage two. 2012–13 as an input into the first The Victorian Government has also With water restrictions low, rivers received Metropolitan Integrated Water Cycle established the Office of Living Victoria Strategy for Melbourne. their full environmental water entitlements (OLV) to drive reform through an in 2011–12. Extra environmental flow immediate focus on integrated water cycle Sustainable water strategies releases of 16 billion litres (11 billion litres planning. Melbourne Water will support for Thomson River and 5 billion litres the work of the OLV which complements Sustainable water strategies set out to for Yarra River) were made in addition our vision of Enhancing Life and Liveability secure water supplies for consumption and to normal releases to waterways from in the Melbourne region. environmental purposes over a 50 year Melbourne’s dams and weirs. period. The Central Region Sustainable Water Melbourne Water supports the Strategy 2006 (CRSWS) set out a series of On 1 July 2011, the Victorian Government’s desire to ensure that actions to 2055 to deliver sustainable water Environmental Water Holder (VEWH) water is used more than once wherever use and management objectives. was established as a new independent possible. Increased use of recycled water statutory body to decide on the best and other alternative water sources is vital The objectives of the CRSWS are addressed use of Victoria’s environmental water to achieving a more sustainable city (see through the Water Supply Demand Strategy entitlements. The VEWH works with Alternative Water Sources chapter, pages and the Healthy Waterways Strategy. Melbourne Water and the catchment 14-19 for detailed information on water For further information on Melbourne management authorities to ensure recycling initiatives). Water’s role in balancing consumption and environmental water entitlements are environmental needs, see the Alternative used to achieve the best environmental Water Sources chapter, pages 14-19 and the outcome with the water that is available. Waterways chapter pages 26-31.

Melbourne Water Annual Report 2011–12 11 Service delivery Water

Water supply to growth areas Partnership with Yarra Valley Water Drought response and water outlook for Melbourne Melbourne Water, City West Water, South Melbourne Water and Yarra Valley Water East Water, Western Water and Yarra Valley have formed a partnership to help identify Melbourne Water has been working with Water worked together to develop cost- and reduce the amount of leakage in the the Victorian Government, VicWater and effective, growth-servicing plans to supply water transfer system. water retailers to review drought response water to Melbourne’s growth areas. The and water management initiatives plans outline how projected growth over Melbourne Water is also helping Yarra for Melbourne based on community the next 20 years will be serviced by new Valley Water understand and manage consultation, experience of managing the infrastructure so that Melbourne Water its Non-Revenue Water (NRW), which dry period between 1997 and 2009, and continues to meet its commitments to amounts to about 12% of the volume lessons from the recent water restrictions retail water customers. of water supplied. implementation. The review has resulted in: Water conservation – A NRW Working Group has been formed to: >>Revised water restriction schedules and System losses and repairing leaks permanent water savings rules following >>Develop a shared level of understanding a statewide VicWater review Melbourne Water’s target is that measurable of the elements of NRW >>Development of a new Water Outlook transfer losses are less than 1% of total >>Work together to reduce the component water delivered. This year we failed to approach to support implementation of of NRW that exists within Melbourne the Drought Response Plans meet the target (recording 1.27%), mainly Water’s wholesale transfer system due to an increase in operational losses >>Revision of the water retailers’ Drought and a tank and reservoir cleaning program: >>Ensure robustness and confidence Response Plans and Permanent Water in the bulk water billing process and Savings Plans. >>Several large reservoirs have been calculation of leakage. cleaned and inspected this year as part Melbourne Water has contributed to Over the last 12 months, the working of a normal maintenance and operation VicWater’s review of the existing four- group’s investigation program has included regime to meet water quality and asset stage restriction schedule and permanent trials of novel leak detection methods and management requirements. The tank water saving rules used throughout some innovative field validation of billing and reservoir cleaning program has fully Victoria. The review drew on experiences meters using salt tracer tests. Results to resumed after being placed on hold from water management during the date have confirmed the accuracy of the or reduced in frequency due to water recent drought and community feedback. major billing meters. The working group restrictions during the drought The revised schedule is broadly similar was recently expanded to involve all to previous restriction schedules and >>The Tarago Treatment Plant was shut metropolitan water retailers. permanent water saving rules. Key changes down due to high turbidity readings in Yan Yean Reservoir disappointment include consistency in watering start times August 2011, resulting in water losses and consistency in automatic and manual while performance adjustments were Yan Yean Reservoir is Melbourne’s oldest watering systems aimed at promoting made to bring the treatment plant storage reservoir and is used to supply community acceptance and adherence back online most of the city’s northern suburbs. to water restrictions. >>Flushing frequency trials were Under normal conditions, it provides backup conducted in the Winneke Preston Main to both Sugarloaf (Winneke Treatment Melbourne Water also participated in the during the year to address summer peak Plant) and Greenvale reservoirs if either joint development of a new Water Outlook flows and water quality requirements. is unavailable or has restricted operation. approach with the Victorian Government A fortnightly flushing regime without and water retailers through the Water water loss was subsequently established Although Yan Yean Reservoir is a treated Supply Demand Strategy (WSDS) for to most effectively manage this asset. supply, it has a reputation for being Melbourne. An annual Water Outlook, to This regime has replaced the previous difficult to bring online as it can have be published each year on 1 December, annual flushing and scouring regime and a slight earthy taste, resulting in some will indicate the overall level of system will result in water savings every year customer complaints. security based on the storage volume at 30 November each year in relation to >>Losses from aqueducts in 2011–12 were This was particularly evident during three zones: High, Medium and Low zones. significantly lower than the previous a Winneke Treatment Plant outage in These zones will be used to determine year. Losses were mainly the by-product November 2011 when Yan Yean water appropriate water management measures. of major capital works at Toorourrong was judged unsuitable as an alternative Reservoir which required the Silver and supply after a day of testing. Another The annual Water Outlook will provide Wallaby Aqueducts to be removed from trial was attempted in February 2012 the community with water use and supply service for most of the year. but customer complaints made Yan Yean information. It will outline various demand supply untenable and it was ceased after management and supply augmentation Overall, a small proportion of the water one week. actions which may include water losses across the Melbourne Water system restrictions, alternative supply projects were due to water main leaks and major Even though Melbourne Water and Yarra and water efficiency programs that will water main renewal works. Our pipe repair Valley Water developed a streamlined be undertaken in the next few years. crews based at Olinda and Healesville fixed process for testing Yan Yean water, The adaptive approach will provide more 111 water main leaks. it remains problematic and further flexibility to respond to water shortages investigations are underway to improve and changing climate conditions, rather the treatment process. than rely on the existing predefined trigger levels for each stage of restrictions.

12 Melbourne Water Annual Report 2011–12 Melbourne Water is continuing to work collaboratively with climate researchers and industry partners to improve understanding of the risks and impacts of climate change and variability, and to implement an adaptation strategy.

Melbourne Water will continue to work The second project is analysing recent Office water use closely with the Victorian Government climate patterns and assessing the range and water retailers on a cooperative and of uncertainty in projected annual rainfall Melbourne Water met its office water coordinated approach to drought response, and river flows under climate change. Both use target in 2011–12, with consumption and to achieve more transparent and projects will help to inform decision-making of 7,152 litres per full-time equivalent resilient water resource planning in the for the sustainable management of water employee per year, compared to a target face of climate variability, population resources. Melbourne Water is also involved of 7,700 litres per full-time equivalent growth and shifting community expectations. in the AdaptWater Project led by the Water employee per year. In terms of office Services Association of Australia (WSAA) to space, corporate water use equates to 473.73 litres per square metre. This data Adapting to climate variability develop a climate change risk quantification and adaptation tool. is collected for the 100 Wellington Parade Melbourne Water is continuing to work head office and includes water used for collaboratively with climate researchers and A Climate Change Reference Group has air-conditioning cooling towers. been established within Melbourne Water industry partners to improve understanding We relocated our head office from East of the risks and impacts of climate change to set direction and review climate change adaptation activities. A Climate Change Melbourne to Docklands over a three week and variability, and to implement an period in June 2012. This affected our adaptation strategy. Risk Register and associated Adaptation 1 Action Plans form a key part of our planning annual water use calculations . We are an industry partner in two Australian for climate change and are updated on an Research Council (ARC) Linkage Projects led annual basis. by the University of Melbourne. One project aims to provide reconstructions of historical We will continue to work closely with our annual rainfall, streamflow, temperature and customers, stakeholders, hydro-climate pressure variations data for south-eastern researchers such as the CSIRO and the Australia to put recent climate variations in Australian Bureau of Meteorology to use the a longer-term context. latest climate and hydrological information to build Melbourne’s water supply-demand resilience by diversifying our sources.

1 Actual water use for June 2012 at the East Melbourne office was omitted from the annual result calculations and then an averaged amount for June was added based on the monthly average of the previous 11 months. Incorporating actual June figures would have led to lower actual water use than the current averaged-out result

Melbourne Water Annual Report 2011–12 13 Service delivery Alternative water sources and Integrated water management

Strategic Goals

Our Aim We will do this by: >> Managing the water supply system to meet Contribute to a more >> Collaborating with customers and stakeholders urban, environmental sustainable, prosperous, and agricultural needs liveable and healthy to investigate new and community by planning diverse water resources >> Sustainably managing and delivering water supply, >> Contributing to further catchments to protect waterways and sewage integration between water resources services holistically. water planning and urban >> Undertaking effective development planning long-term planning with >> Taking opportunities to stakeholders to meet achieve multiple benefits the needs of a growing from our natural and population and address the built assets forecast impacts of climate change and variability.

14 Melbourne Water Annual Report 2011–12 Key Achievements

>> Worked with the water >> Provided support for >> Worked with City West retailers to prepare the various Integrated Water Water to establish site first draft of the Water Management (IWM) regional works for the building of Supply Demand Strategy strategies and strengthened their salt reduction plant for Melbourne relationships around these at the Western Treatment >> Provided input to the Living (e.g. Water Initiatives 2050, Plant (WTP), so salt-reduced Melbourne, Living Victoria Strategy for West, Northern recycled water can be Ministerial Advisory Council Growth Area IWM Strategy, supplied to growth areas consultation process Yarra Valley Water Healthy of west Werribee Rivers Strategy) >> Supported the establishment of the Cooperative Research Centre for Water Sensitive Cities to deliver integrated water management research

Disappointments Challenges

>>The demand for recycled water was low >>Integrating all sources of water to in 2011–12 due to above average rainfall. diversify supply, improve climate Despite this lower demand, Melbourne resilience and promote fit-for-purpose Water’s capacity to supply recycled use to keep potable quality water water remains unchanged available for drinking >>Managing recycled water salinity in the west of Melbourne >>Completing and implementing the Investment Framework to allow cost sharing and IWM project benefits across organisations >>Investigating the impacts of urban development on groundwater >>Keeping pace with the speed of urban development and supporting the Growth Areas Authority (GAA) to develop IWM plans

Melbourne Water Annual Report 2011–12 15 Service delivery Alternative water sources and Integrated water management

Benefits for communities, industry, Integration of alternative We are working with the water retailers, agriculture and the environment water sources the Department of Sustainability and Environment, the Department of Treasury Melbourne Water is committed to Regional and Local Integrated Water and Finance, and the Essential Services collaborating with customers and Management Strategies Commission to support the development stakeholders to plan and deliver water Melbourne Water, South East Water and of this Common Economic Evaluation supply, waterways and sewage services Framework (as recommended by the Living holistically by using alternative water Southern Rural Water have developed an integrated water strategy – Water Melbourne, Living Victoria Ministerial sources including stormwater, rainwater Advisory Council). and recycled water. Initiatives 2050 – to guide investment in water projects in Melbourne’s south-east. Alternative water schemes and water This more integrated approach to water efficiency programs deliver benefits management will contribute to a more Projects that contribute to the vision of a ‘productive, liveable and sustainable’ across the whole water cycle and to a sustainable, prosperous, healthy and wide range of beneficiaries. The Evaluation liveable community. region by 2050 have been identified in collaboration with local councils. An Framework provides an opportunity to Drinking quality water makes up less implementation plan is being developed work cooperatively and systematically than one-third of Melbourne’s total to outline a program of staged works. with all beneficiaries as business cases are water demand. The Department of Health developed. It also facilitates a process for requires drinking quality water to be used As part of a new Strategy for the West, agreement to co-invest where appropriate. Melbourne Water, City West Water, for indoor taps, showers and selected Underpinning this work was Melbourne industrial uses. Southern Rural Water and Western Water are collaborating on a scoping study to Water’s investment in research to Alternative water sources that have been identify regional-scale opportunities for determine the benefits of integrated treated to ensure they are fit-for-purpose integrated water management. approaches to water management and can be used for toilet flushing, laundry use, how to quantify these for inclusion in domestic gardens, parks and gardens, some Melbourne Water has helped Yarra Valley business cases. Over the last 12 months, environmental purposes, industry and Water complete a Northern Growth Area Melbourne Water contributed to research peri-urban agriculture. Taking this approach Integrated Water Management Strategy projects conducted by the Cities as to meeting demand enables Melbourne and a Healthy Rivers Strategy. Both Water Supply Catchments program at to preserve finite high quality water for businesses will also work together on a Monash University and the Australian specific uses. scoping study to identify other regional- Water Recycling Centre of Excellence. scale opportunities for integrated water There are multiple direct and indirect management. Integration with urban planning benefits associated with developing Melbourne Water works closely with Melbourne Water is supporting the alternative water sources and increasing integration of water and urban planning fit-for-purpose water use including: 38 local councils across the Port Phillip and Westernport region. Many of these in a number of ways, including: >>Community – healthy open spaces and councils have developed integrated water >>Identifying potential reforms to facilitate sports fields, a reduced urban heat island cycle plans to identify opportunities better integration of water management effect and improving the resilience of to harvest alternative water sources from and urban land use planning, in support the water supply system to climate local assets, reduce demand for potable of a review of Victoria’s planning policy change and variability water and improve the management and statutory framework of urban stormwater. An example of >>Economic – opportunities for growth, these plans is the City of Kingston’s >>Creating an Urban Development especially in industry and agriculture Integrated Water Cycle Strategy, which Strategy to better leverage urban >>Environment – increasing the amount of was completed in 2012 with assistance planning functions to achieve integrated water available for environmental flows, from Melbourne Water. water management outcomes in and reducing the impact of discharges consultation with the Growth Areas such as stormwater and treated Common Economic Authority, local government and the wastewater. Evaluation Framework water retailers Melbourne Water is working with local The Water Supply Demand Strategy >>Working to better integrate councils and water retailers to deliver sets out a draft approach to assessing Melbourne Water’s Developer Service stormwater harvesting projects for the merits of investments in alternative Schemes process with the Growth residential and open space end uses. water schemes and water efficiency Areas Authority’s Precinct Structure programs. It also outlines a process Planning process and integrated water We are also working with City West Water, for cost sharing and recovery where management options analysis Southern Rural Water, South East Water there are multiple beneficiaries from >>Working with the Growth Areas and the Water Infrastructure Group to an integrated investment. provide customers with recycled water Authority, local government and the produced at our wastewater treatment water retailers to identify integrated plants. This recycled water is used for water servicing options for some of open space irrigation, agriculture, and the ‘fast-track’ Precinct Structure Plans for residential dual pipe schemes. in Melbourne’s growth areas.

16 Melbourne Water Annual Report 2011–12 Melbourne Water is committed to collaborating with customers and stakeholders to plan and deliver water supply, waterways and sewage services holistically by using alternative water sources including stormwater, rainwater and recycled water.

Stormwater harvesting Melbourne Water is also working with Recycled water Places Victoria and City West Water on Under the Water Act 1989, Melbourne Riverwalk Estate, which is a new residential Managing water quality Water is delegated responsibility for the development planned for Werribee that will and reliability of supply licensing of surface water from waterways showcase best practice integrated water Melbourne Water continues to work in some catchments and from its own management. works, which includes the requirement with the water retailers to reduce salt to licence stormwater. discharges to sewer and is reviewing the Managed aquifer recharge Salinity Reduction Strategy with the aim There are currently 17 active stormwater of providing fit-for-purpose recycled water licences issued by Melbourne Water, Managed aquifer recharge is the actively for customers. predominantly to councils and sports managed recharge of water to aquifers clubs, totalling 720 million litres. for subsequent recovery and use, or The objective of the Salt Reduction environmental benefit. Water deposits Strategy review is to fill knowledge gaps Melbourne Water continues to work are made in times of surplus (commonly and determine the lowest community with local councils and water retailers on during winter) and extraction of the stored cost options for salt management. The stormwater projects including Yarra Valley water occurs during peak demand times process will be informed by analysis to Water and Manningham City Council to when traditional supplies struggle to meet establish the salinity and sodicity impacts service the Doncaster Hill Principal Activity demand (summer). of recycled water and the cost for its Centre. This development will integrate management. The review will also include reticulated stormwater and recycled water Multi-year balancing is also possible for an infiltration study to identify sources of into the existing urban setting. long-term storage. Typically, managed salt infiltration into the Hobson’s Bay Main aquifer recharge involves the capture and Sewer catchment. An engagement plan Melbourne Water, Yarra Valley Water use of treated stormwater or recycled has been developed and will be used to and Moreland City Council are working water to recharge an aquifer for future identify and incorporate stakeholder views together to treat stormwater from two recovery and use. in the revised strategy. existing drains to service the Central Coburg precinct and surrounds. Melbourne Water is continuing to partner with A duplicate Class C pipeline at WTP has City West Water on the West Werribee Aquifer been constructed to increase the flexibility Melbourne Water, the City of Melbourne, Storage and Recovery Trial. Managed aquifer of the plant’s recycled water system, the City of Port Phillip, the Department recharge is proposed as a key component of and ensure a more reliable supply can be of Sustainability and Environment, Office City West Water’s West Werribee Dual Pipe maintained to customers. of Living Victoria, Places Victoria, South Scheme. The potential for managed aquifer East Water and City West Water are recharge is being investigated as an option Melbourne Water has supported City West collaborating on the Southbank Structure for storing excess salt-reduced recycled water Water to develop the proposed Altona Plan. This plan is investigating the use of by operating City West Water’s salt reduction Stage two Recycled Water Scheme, which, recycled water in buildings for non-potable plant (located at WTP) at full capacity when approved, would supply Class A demands and treating all stormwater throughout the year. This would balance short- water from WTP to industrial customers generated in the area by 2040. term seasonal demands as well as ensure in the Altona precinct. security of supply for the coming decades.

Melbourne Water Annual Report 2011–12 17 Service delivery Alternative water sources and Integrated water management

Melbourne Water’s Recycling Schemes

N

YARRA VALLEY WATER

CITY WEST WATER

Western Treatment Plant

Eastern Treatment Plant

SOUTH EAST WATER Port Phillip Bay

Werribee Irrigation District Western Port Werribee Tourist Precinct

French Eastern Irrigation Scheme Island South Eastern Outfall Sewer Treatment Plant on-site use Bass Strait Boags Rocks Phillip Retail Water Business boundary Island

Melbourne Water has also supported South In addition, 16,500 million litres Supply to City West Water East Water, Southern Rural Water and local of recycled water was provided for councils to develop a pre-feasibility study conservation purposes in the Ramsar-listed Melbourne Water supplied 152 million to assess the benefits of the proposed wetlands (18,723 million litres last year). litres of Class A recycled water to City Bunyip Food Belt scheme, in which Class A Including the conservation flow, 18% of West Water (132 million litres last year) recycled water from the Eastern Treatment Melbourne Water’s treated wastewater for the Werribee Employment Precinct, Plant (ETP) would be supplied to food from both WTP and ETP was recycled. MacKillop College and standpipes for producers in Melbourne’s south-east. water carters. City West Water’s demand The project is currently being managed Supply to Southern Rural Water for recycled water will continue to grow by local councils. with new demand coming from their West Melbourne Water supplied 9 million litres Werribee Dual Supply Scheme expected to Water recycling west of Melbourne of Class A recycled water to Southern come online in late 2013. Rural Water (1,789 million litres last WTP supplied 23,168 million litres of year). The 9 million litres was supplied to In the Werribee Employment Precinct, recycled water to customers in 2011–12 customers in the Werribee Tourist Precinct recycled water is used by City West Water’s (11,249 million litres last year). This (43 million litres last year). commercial customers for wash-down, comprises 23,007 million litres of recycled industrial processes at Melbourne Water’s water used onsite (9,328 million litres No Class A recycled water was supplied to Hoppers Crossing Pump Station and open last year), mostly Class C water for growers in the Werribee Irrigation District space irrigation. During the year, 98 million pasture irrigation and land and salinity (1,746 million litres last year). Above litres was supplied to City West Water for management, and 161 million litres of average rainfalls for the last two years this precinct (94 million litres last year). Class A recycled water supplied to Southern reduced the demand for irrigation water Rural Water and City West Water for offsite and any supplementary demand was met City West Water was supplied with 22 million customers (1,921 million litres last year). by use of river water. litres of recycled water for MacKillop College (16 million litres last year). Water carters were supplied with 32 million litres of recycled water from City West Water standpipes at WTP (22 million litres last year) for a range of applications.

18 Melbourne Water Annual Report 2011–12 There are currently 17 active stormwater licences issued by Melbourne Water, predominantly to councils and sports clubs, totalling 720 million litres.

Recycled water volumes Actual 2010–11 Actual 2011–12 Forecast 2011–12 ML %* ML %* ML %* Onsite recycling 9,328 2.8 23,007 7.2 30,000 9 Supply to Southern Rural Water Werribee Irrigation District 1,746 0.5 0 0.0 10,650 3 Werribee Tourist Precinct 43 0.0 9 0.0 200 0.0 Supply to City West Water West Werribee Dual Pipe Project 0 0.0 0 0.0 0 0.0 Werribee Employment Precinct 94 0.0 98 0.0 360 0.0 MacKillop College 16 0.0 22 0.0 50 0.0 Water tankers / standpipes 22 0.0 32 0.0 200 0.0 WTP Total 11,249 3.4 23,168 7.2 41,460 13 Eastern Treatment Plant Onsite recycling 14,597 4.3 14,331 4.4 13,800 4 Supply to Water Infrastructure Group Eastern Irrigation Scheme 1,666 0.5 3,089 0.96 5,000 2 Supply to South East Water South Eastern Outfall 478 0.1 719 0.2 1,600 0 ETP total 16,741 5.0 18,139 5.56 20,400 6 Total recycled 27,990 8.3 41,307 12.9 61,860 19 Treated wastewater 335,764 323,545 available for recycling Conservation flows at WTP 18,723 5.6 16,500 Total incl. conservation flow 46,713 13.9 57,807

*Refers to percentage of treated wastewater produced at Melbourne Water’s treatment plants ML = million litres

Water recycling east of Melbourne Supply to Water Infrastructure Group Supply to South East Water ETP at Bangholme currently produces Class Melbourne Water supplied 3,089 million litres Melbourne Water supplied 719 million C recycled water. This year 18,139 million of Class C recycled water (1,666 million litres litres of Class C recycled water to South litres of recycled water (16,741 million last year) to the Water Infrastructure Group. East Water via the South Eastern Outfall litres in 2011–12) was supplied from ETP, This was supplied for treatment to Class A pipeline (478 million litres last year). including 14,331 million litres onsite recycled water for use in the Eastern (14,597 million litres last year). Irrigation Scheme. The pipeline transports recycled water from ETP and smaller South East Water Work is close to completion on the upgrade The Eastern Irrigation Scheme operates treatment plants to Boags Rocks on the of the plant to Class A quality water (see under the brand TopAq, a wholly owned Mornington Peninsula. Sewerage chapter page 22). The upgrade subsidiary of Water Infrastructure Group. will enable recycled water to be used for TopAq distributes recycled water to more South East Water customers along the a broad range of non-drinking applications than 80 customers for horticulture, open pipeline use this recycled water for including toilet flushing, watering sports space irrigation and industrial processes. agricultural and horticultural activities, grounds and irrigating vegetables. root crop irrigation, flower growing, drip TopAq also supplies South East Water with irrigation of vineyards, and for watering golf recycled water for dual pipe schemes in courses and sports grounds. There are now residential developments where the water 50 customers using recycled water from is used for toilet flushing, watering, the South Eastern Outfall (53 last year). streetscape and open space irrigation.

Melbourne Water Annual Report 2011–12 19 Service delivery Sewerage

20 Melbourne Water Annual Report 2011–12 Key Achievements

>> Completed the Northern >> Completed the Western >> Developed an alternative Sewerage Project six Treatment Plant (WTP) wet strategy to building an months ahead of schedule weather capacity upgrade expensive new sewer and under budget to reduce and used this during several at Ringwood South to sewage overflows to Merri rainfall events improve the health of and Moonee creeks >> A major upgrade of the Dandenong Creek >> Completed the Melbourne Eastern Treatment Plant (ETP), >> Completed a Biosolids Main Sewer Replacement on which will benefit the marine Strategy and identified time and under budget environment at Boags Rocks commercial/research >> Met all compliance and increase opportunities proposals for the beneficial obligations for effluent for recycled water, is on track use of biosolids discharged from our sewage to be completed by the end treatment plants of 2012

Disappointments Challenges

>>Failed odour complaints target >>Managing a significant number of wet weather sewage overflows >>Delayed completion of new aeration tanks at ETP (to meet population-based >>Rehabilitating the Eastern Drop Structure load growth and support ammonia on Hobsons Bay Main Sewer in a ‘live’ reduction) due to substantial defects sewer environment to facilitate the requiring rectification construction of an air treatment facility >>Reviewing our Odour and Corrosion Strategy to account for issues including the impacts of reduced sewer flows on odour-causing compounds >>Ensuring we are positioned to take advantage of new markets for resources produced from sewage and biosolids

Melbourne Water Annual Report 2011–12 21 Service delivery Sewerage

Melbourne Water’s Recycling Schemes

N

YARRA VALLEY WATER

CITY WEST WATER

HOBSONS BAY MAIN

Western Treatment Plant

Mordialloc No.2 PS Mordialloc No.1 PS Bondi Rd PS Eastern Treatment Plant

Port Phillip Bay SOUTH EAST WATER

Melbourne Water Western Port sewerage pipeline Retail Water Business boundary French Island Melbourne Water sewerage pump station SOUTH EASTERN OUTFALL Sewerage system outlet Bass Strait Phillip Sewer Treatment Plant Island

Our sewerage system Eastern Treatment Plant Powering the plant Melbourne Water’s sewerage system A major upgrade of ETP in Melbourne’s The introduction of tertiary treatment at consists of: south-east is nearing completion. Built in ETP requires additional power at the site to 1975, the plant will be transformed into complement on-site generation from biogas >>402 kilometres of sewers one of the most sophisticated large-scale harvesting. A second high-voltage feeder >>9 sewage pumping stations facilities in the world. was constructed and commissioned in 2011 to supply this power. The second feeder also >>ETP at Bangholme and WTP at The project will deliver significant provides an important backup to ensure that Werribee environmental benefits by improving the critical plant operations can continue if the quality of the treated effluent discharged >>9 air treatment facilities. supply from one feeder is lost. at Boags Rocks and raising the standard of Melbourne Water treated a total of recycled water produced at the plant. Treating waste solids and 320,067 million litres of sewage at ETP and WTP in 2011–12. This was similar to Once completed, the plant will treat more 2010–11 flows (325,308 million litres) due than 100 billion litres of wastewater to Suspended solids in raw sewage entering ETP primarily to ongoing above average rainfall. Class A recycled water standard each are allowed to settle in large tanks to form year using advanced tertiary treatment a layer of primary sludge in a process called About 44% of this sewage was treated processes including biological media sedimentation. The sewage then undergoes at ETP and 56% was treated at WTP. filtration, and disinfection using ozone, secondary treatment involving a biological ultraviolet light and chlorine. process to break down organic material and remove nutrients. Waste-activated sludge The project is being delivered by the is generated from this process. Eastern Tertiary Alliance – a partnership between Baulderstone, UGL Infrastructure, Black & Veatch, KBR and Melbourne Water. Commissioning will occur in the second half of 2012, and the project remains on track to be fully operational by the end of the year.

22 Melbourne Water Annual Report 2011–12 A major upgrade of ETP in Melbourne’s south-east is nearing completion. Built in 1975, the plant will be transformed into one of the most sophisticated large-scale sewage treatment facilities in the world.

The primary sludge and the thickened for completion by September 2013. The Renewable energy waste-activated sludge are pumped to increased costs and time delays are being eight large tanks (8 million litres each) addressed with the project manager, Lagoon covers are being progressively called digesters where around 45% of designer and constructor. replaced at WTP to capture more biogas the solids are converted into biogas for the generation of renewable energy (predominantly ). The biogas is Reliability program and to help reduce odour. The 115 East used on site to generate renewable energy. Lagoon cover reached the end of its service A targeted reliability program is underway life and was removed in early 2012. This Increases in Melbourne’s population at ETP. This program identifies repetitive work also included dredging of a significant have resulted in higher levels of solids failures with mechanical and electrical amount of surface sludge that had requiring treatment in the digesters and equipment and then undertakes root accumulated under the covers. a need for increased digestion capacity. cause analysis. The root cause analysis A primary sludge thickening facility was provides an action plan that reduces Works to replace and double the existing commissioned in late 2011 which has future breakdowns. This program reduces area covered across the 55 East Lagoon freed up volume in the digesters equivalent maintenance costs and ensures the plant’s have started with two segments of the to an additional two digesters. ongoing reliability. new cover installed. The new cover will be four times the size of the MCG and Aeration tank works Western Treatment Plant is expected to be completed in 2013. It forms part of an overall plan to increase A contract was awarded for the construction Wet weather capacity upgrade biogas capture and production of of four additional aeration tanks in February renewable energy at the plant. 2007 to support the successful conversion Major sewage channel duplication work of existing aeration tanks to an ammonia to accommodate increases in peak sewage These works will enable the plant to be reduction process, and provide for ongoing flows following significant rainfall events nearly self-sufficient in its power needs population-based load growth to ETP. was completed at WTP in late 2011. and to export any excess electricity to other Melbourne Water sites, reducing A number of defects relating to the The increased sewage inflow capacity system-wide power costs and greenhouse construction of the concrete aeration has been used on several occasions since gas emissions. tanks are now evident. The rectification completion, with peak flows reaching of these defects has caused delays to the 1,773 million litres a day. project. Construction of the four additional aeration tanks was due to be completed by The wet weather treatment capacity has January 2009. The project is now scheduled increased to 2,500 million litres a day.

Melbourne Water Annual Report 2011–12 23 Service delivery Sewerage

Recycled water pump station Delivered jointly by Melbourne Water Large pump assessments and pipeline (Stage one) and Yarra Valley Water (Stage two), the new sewers provide additional Melbourne Water relies on large pumps Construction of a new recycled water capacity for Melbourne’s fast-growing to successfully transfer sewage and water pump station and pipeline was completed northern suburbs including Epping around its extensive distribution network. in 2012. The project improves reliability and Craigieburn and will protect the Due to the critical nature of sewerage in the delivery of both Class A and Class C downstream health of the Yarra River recycled water to customers. system pumps at Hoppers Crossing, and Port Phillip Bay from sewer overflows Brooklyn and ETP, and water pumps at following rainfall events. Yering Gorge, a condition assessment Transfer system The 8 kilometre long deep-tunnelled sewer strategy was implemented to maximise Sewerage transfer capacity has been on Stage one connects into the existing the life of the assets. improved by the recently completed sewerage system near the at It was concluded these assets are robust Melbourne Main Sewer Replacement and Coburg and the in and can have an extremely long operational the Northern Sewerage Project which will Pascoe Vale. life with minimal changes to existing help reduce sewage spills into waterways maintenance regimes. Nominal operating during wet weather. The 4.5 kilometre long, deep-tunnelled sewer on Stage two runs from Carr Street, life of the pumps, based on empirical Melbourne Main Sewer Replacement Coburg North to L.E. Cotchin Reserve in evidence drawn from analysis of other Reservoir, receiving sewage flows from the similar large assets, was 100 years. The replacement of a section of a century- existing sewerage system in Fawkner. A $5.5M capital investment is expected old sewer main from Port Melbourne to to be required to address renewals over Docklands was completed in June 2012, Ringwood Sewer Strategy to a period of 10 years across all four sites. on time and under budget. improve Dandenong Creek Managing corrosion and odour Marking the culmination of four years of An alternative strategy is being tunnelling and construction, the new sewer implemented for the Ringwood South Melbourne Water received 14 odour main replaces a 2.3 kilometre section of Sewer site at Dandenong Creek to provide complaints related to the sewerage transfer Melbourne’s original brick-lined sewer built a more cost-effective approach for system this year. This was two less than in in the 1890s. The new Melbourne Main improving the local environment and to 2010–11, but more than our target of 10. Sewer will triple sewerage capacity and cater avoid building an expensive new sewer. These odour complaints were due to a for inner-city growth for the next century. Given that a new sewer would cost an range of reasons, predominantly manhole A 100-metre long boring machine was estimated $100M, other options to covers being dislodged by traffic or used to construct the tunnel under the improve the overall health of Dandenong grass cutting activities as well as normal CBD and build the new main up to 12 metres Creek were examined. discharge of sewer gases from vent stacks underground. A major component of the or ventilation associated with works being project was a 140 metre pipeline under the An ecological health study conducted in undertaken in the sewer network. Yarra River that took specialist divers and consultation with EPA Victoria, South East An enhanced proactive maintenance engineers two years to build. Water and Yarra Valley Water revealed wet weather sewage overflows did not have a program and implementation of An additional 1.9 kilometres of smaller significant impact on the creek’s health but improvement actions from our Odour branch and reticulation sewers were also other sources of pollution, such as runoff and Corrosion Strategy will reduce the constructed, connecting Port Melbourne from industrial areas, did have an impact. likelihood of future odour complaints. residents into the new system. These pollutants will be the focus of a Works to address sewer corrosion and program to improve the health Northern Sewerage Project odour from the Eastern Drop Structure of the waterway. (EDS) manhole on the Hobsons Bay Main The Northern Sewerage Project was Several environmental improvements were Sewer are continuing. The EDS allows completed in November 2011, six months also identified to offset any impacts on the sewage from the city fringe and bayside ahead of schedule and under budget. creek of further overflows from the sewer areas to drop down and flow beneath the system during high rainfall events. Yarra River. The EDS handles about 175 The project involved the construction of million litres of sewage a day and is the 12.5 kilometres of new sewer tunnels in Up to $12M has been set aside for capital main crossing point for sewage on the way Melbourne’s densely-populated northern works to deliver pollution abatement and to WTP. suburbs. Commencing in August 2007, amenity and ecology improvements for works took place 24 hours a day, six days Dandenong Creek as part of the first stage To address odour complaints from per week. of the strategy. neighbouring development, the ventilation fan used to extract foul air from the EDS The project has been formalised in was turned off for 12 hours a day in 2002. a Memorandum of Understanding This reduction in ventilation resulted in between EPA Victoria and Melbourne significant corrosion impacts within the Water and will result in a better financial drop structure. and environmental outcome than the traditional ‘big sewer’ approach.

24 Melbourne Water Annual Report 2011–12 The replacement of a section of a century-old sewer main from Port Melbourne to Docklands was completed in June 2012, on time and under budget.

From 2007, projects have been Two private sector proponents have been Sewer mining progressively implemented to rehabilitate identified as potential beneficial users the EDS. These works, on a live sewer, of biosolids from ETP. These proponents In 2009, the Melbourne Metropolitan are very challenging and have to be will commence feasibility studies in Sewerage Review identified the need for undertaken in stages to ensure they are early 2012–13. Melbourne Water aims to a modelling tool capable of analysing the completed safely. achieve annual beneficial use of 28,000 dry system-wide effects (energy consumption, tonnes of biosolids (approximately 100% greenhouse gas emissions, nutrient and About $8M has been spent on restoring of ETP annual production) by 2018. water flows) of sewer mining and localised the EDS to date. Works are nearing sewage treatment. completion to remove corroded elements, The strategy also recommends continued install an overflow weir to reduce the research into the impacts of stockpiling at Since 2009, Melbourne Water has updated release of corrosive gases, and fit an access WTP and continued support for emerging its hydraulic model to include recent urban platform for penstock maintenance. Other biosolids beneficial use technologies. growth and sewage quality analysis. planned works include provision of an Air Biosolids reuse target During 2011–12, these initiatives were Treatment Facility at an estimated cost of consolidated into the Strategic Sewerage $20M, followed by rehabilitation of other Melbourne Water has a target to reuse Assessment Tool. This tool will be used to civil structures within the EDS, costing 90,000 tonnes of ‘clay rich’ biosolids from support the development of integrated about $3M. ETP by 2013. Due to the clay composition water cycle strategies in Melbourne. of these biosolids, they are particularly Managing biosolids suited for use as a structural fill material. Melbourne Water updated its Biosolids Although there was no reuse of these Strategy in 2011–12. The strategy biosolids in 2011–12, Melbourne Water recommends identifying beneficial uses is continuing to work with Victorian for biosolids from ETP given the significant Government agencies and private sector impacts of continued stockpiling at that site. construction companies to identify opportunities for the use of this material.

Melbourne Water Annual Report 2011–12 25 Service delivery Waterways

26 Melbourne Water Annual Report 2011–12 Key Achievements

>> Met a target for total >> Fully met service standards >> Implemented a new community satisfaction set out in our Customer approach to stormwater with waterways Charter for Waterway quality funding (Living >> Made good progress Diversion Services for the Rivers) that improves local on developing Flood second consecutive year government capacity to Management Plans with >> Completed internal and deliver stormwater quality local councils external consultation on drafts treatments that consider whole-of-water-cycle >> Released a significant volume of the Healthy Waterways and Stormwater strategies functions and liveability of water specifically to outcomes benefit the environmental >> Extended our stakeholder health of the Yarra River network on sustainable >> Worked with leading research institutes to trial >> Yarra River was runner-up in stormwater management to include water retailers and new pollution tracking and the prestigious International catchment management River Prize EPA Victoria – partnerships that will deliver more technologies >> Completed construction opportunities for integrated of a new weir at Dights Falls stormwater management on the Yarra River, despite with enhanced liveability wet weather delays outcomes

Disappointments Challenges

>>A target of reducing known intolerable >>Integrating flood management with flood risks by 10% by 2013 will only broader stormwater quality and quantity be partially achieved management and overall integrated water management >>Progress has been slower than anticipated on completing the Bunyip >>Developing systems and managing Main Drain Rehabilitation project expectations about water quality during and after large rainfall events >>Meeting the growing needs of urban development in a way that considers waterways, regional drainage and floodplain management

Melbourne Water Annual Report 2011–12 27 Service delivery Waterways

Waterways and Drainage Systems

N

MARIBYRNONG CATCHMENT

YARRA RIVER CATCHMENT

WERRIBEE CATCHMENT

DANDENONG CATCHMENT

Drainage Pumping Station Retarding Basin WESTERNPORT CATCHMENT Port Phillip Bay Wetlands Channel (Modified Waterway) Western Underground Drain Port Bay Natural Waterway

River Basin Catchments

Bass Strait Waterways and Drainage Boundary

Our waterways and Implementing the current Healthy Waterways Strategy drainage system Regional River Health Strategy Work is progressing on a crucial new Melbourne Water is the caretaker of river Melbourne Water invested almost $26.2M strategy to help maintain and manage health in the Port Phillip and Westernport in streamside works this year to protect 8,400 kilometres of rivers and creeks region. In this role, we manage: and improve river health. These works throughout greater Melbourne. involved removing and managing weeds >>8,400 kilometres of rivers and creeks across 1,310 kilometres, revegetating Melbourne Water’s new Healthy Waterways >>1,473 kilometres of drains 281 kilometres of land along waterways Strategy (2013–18) will be used as a guide and stabilising eight sites subject to erosion. to protect the environmental health of our >>344 constructed waterway treatment waterways and the amenity they provide, systems and wetlands Our River Health Incentives Program making Melbourne a better place to live. >>300 monitoring stations on waterways provides funds and support for landowners Due to the high community value placed and drains and managers to improve the health of on waterways as places for recreation, land adjoining waterways. We provided relaxation and enjoyment, the strategy will >>157 urban lakes. 964 grants this year valued at $4.19M include specific targets to improve these (compared to 872 grants valued at social values. Improving river health $3.61M in 2010–11). The Healthy Waterways Strategy will Melbourne Water works with many Under our Stream Frontage Management ensure funds are directed to protecting organisations, groups and individuals Program, we provided $2.56M to support and enhancing high value areas and that look after waterways, and the plants a record 725 projects on private property, maintaining appropriate levels of service in and animals that depend on a healthy constructing 107 kilometres of fencing along line with customer expectations. river environment. They include local waterways to exclude livestock and planting councils, landowners, community groups, more than 246,000 native seedlings. Melbourne Water consulted extensively with developers, farmers, government agencies interested landowners, community groups, and research institutions. We also funded 125 Community Grant government agencies and local councils waterway management projects totalling when developing the strategy to ensure $590,000 and supported public land broad customer and stakeholder support. managers through 114 Corridors of Green projects totalling $969,000.

28 Melbourne Water Annual Report 2011–12 Melbourne Water’s new Healthy Waterways Strategy (2013–18) will be used as a guide to protect the environmental health of our waterways and the amenity they provide, making Melbourne a better place to live.

Water quality Threatened Catchments Program Dights Falls project Melbourne Water is working to improve The Threatened Catchments Program is Works to build a new weir at Dights the health of waterways by developing trialling a number of measures to mitigate Falls on the Yarra River in Abbotsford are sustainable stormwater management the hydrological impacts of stormwater. complete, with a new fishway also nearing practices in collaboration with our Recent highlights include: completion. stakeholders. >>Launch of the ‘Tanks for Helping The project started in late 2010 to replace Now in final draft form, our Stormwater Program’, in partnership with South East an old weir that was at the end of its useful Strategy not only outlines the impacts Water and Knox City Council, introducing life and acted as a barrier to fish migration. of stormwater but looks at potential best practice stormwater management opportunities for stormwater harvesting at more than 200 homes in the Dobsons In 2011, Dights Falls experienced some of and provides a framework to plan for Creek Catchment in Olinda its highest flows in 50 years, which caused projects that will achieve desired outcomes. construction to stop for eight months. >>Industry-leading sediment control Works resumed in January 2012 and the ‘Living Rivers’ is a Melbourne Water measures on two unsealed roads (Old project team made significant progress. program that operates in partnership Coach Road and Farnsdons Road) in the Water has now started flowing over the with 38 local councils to identify needs Yarra Ranges to protect the headwaters new weir, returning the Yarra upstream and deliver sustainable stormwater of . to its normal river level conditions. management outcomes. Over the past 12 A challenge for the Threatened months, Living Rivers has provided $4.56M Design of the new weir replicates Catchments Program is to successfully the historic structure of the original in project support to local government for work with developers to achieve genuine strategic and structural projects aimed at weir dating to early days of European water sensitive development without settlement. One of the most significant building capacity to deliver sustainable policy and regulatory backing. stormwater management. conservation projects undertaken by Tackling pollution at the source Melbourne Water, we worked closely with Projects funded through Living Rivers Heritage Victoria, the Wurundjeri people, address key elements of total water Melbourne Water’s ‘Hot Spot program’ the cities of Yarra and Boroondara, river cycle management including improved seeks to address eight chronic pollution users and environment groups to preserve stormwater quality, improved waterway hot spots (faecal or toxicant) within the the heritage of the site. health, and liveability. Examples of projects Westernport and Port Phillip catchments. include streetscape works within the Little The new fishway is on track to be completed Stringybark Creek catchment (with Yarra The program focuses on problems at by spring 2012 and will boost native Ranges Shire Council); Kalparrin Gardens, the source through a combination migratory fish numbers and species diversity. Chelsworth Park and Dewinton Reserve of education, behaviour change and stormwater harvesting projects (with enforcement activities (in contrast to Yarra River weed control Banyule City Council); Edinburgh Gardens its inception as a capital works program). Melbourne Water has undertaken raingarden and harvesting project (with City This year’s highlights include: $2M of works to control more than of Yarra); and development of stormwater >>Initiation of a hot spot tracking program 60 types of weed along a 20 kilometre implementation targets and integrated with the Centre for Aquatic Pollution stretch of the Yarra River between Plenty water management strategies for the cities Identification and Management (CAPIM) River in Templestowe and Dights Falls of Boroondara, Nillumbik, Yarra Ranges Shire, to investigate the sources of pollution to in Abbotsford. Brimbank, Casey, and Frankston. five waterways Controlling weeds will allow native Wallan >>Completion of a pilot project in gum trees, wattles and bottlebrush to Work is now complete on a $1.5M wetland partnership with the cities of Yarra and regenerate more successfully, helping at Wallan Community Park. Melbourne, City West Water and EPA protect and improve significant areas Victoria, that targeted food businesses of vegetation. In time, the project will The result of more than four years of on Victoria Street, Richmond and parts improve water quality and increase the consultation and planning with Mitchell of Melbourne’s CBD ‘Hot Spot program’. numbers of native fish, platypus and . Shire Council and the local community, A challenge for the ‘Hot Spot program’ is Melbourne Water has also carved 30 the 7,000 square metre wetland will help ensuring that appropriate enforcement improve the health of Wallan Creek by nesting hollows into condemned trees occurs when polluters are identified and along the Yarra River to provide a safe reducing the amount of nitrogen and other they fail to change their behaviour. pollutants being carried in stormwater. The haven for birds, such as Crimson Rosellas project is expected to prevent about 180 and Red-rumped Parrots, and Ringtail and Melbourne Water has established a Brushtail possums. The hollows will also kilograms of nitrogen and 44 kilograms of partnership with EPA Victoria to provide phosphorous from entering Wallan Creek benefit Australia’s largest owl species, the technical assistance to the review of the Powerful Owl. every year. Best Practice Environmental Guidelines for Stormwater to ensure that future More than 35,000 aquatic plants and stormwater management projects reflect shrubs were planted in the wetland to best practice. A challenge for this project capture and treat pollution and help create will be ensuring that appropriate standards habitat for native fish and wildlife. are adopted.

Melbourne Water Annual Report 2011–12 29 Service delivery Waterways

Investing in research the reservoir’s construction, improving As of June 2012, we had issued 17 storm- habitat for fish and macroinvertebrates, water licenses for a total of 720 million During 2011–12, Melbourne Water invested and improving the condition of streamside litres and are working with a number of more than $1.5M on research to foster vegetation. A further release of water was councils – including Bayside, Banyule, Casey, strategic decision-making in waterway made over the warmer summer months Maribyrnong and Brimbank – on proposals management as well as increase the to improve water quality in the lower Yarra within their areas to irrigate sporting effectiveness and efficiency of our activities. when natural streamflows decline and river grounds and public open spaces. These new Areas of research include urban stormwater temperatures increase. schemes will be finalised over the coming months as proponents that have received harvesting and treatment, development More environmental flows are planned of water resource modelling and decision Federal funding for their schemes only have for the next 12 months to build on until June 2013 to build them. support tools, control of aquatic and these improvements in the river’s health. riparian weeds, aquatic ecotoxicology Environmental flows will also greatly In 2011–12, we also developed new and pollution management, wildlife improve the outlook for vulnerable and guidelines for stormwater harvesting conservation, climate change impacts on important native animals such as Macquarie on Melbourne Water drainage assets. waterways, functioning of estuaries and perch and platypus by providing habitat, These guidelines help industry and other environmental flows. increasing food sources (water bugs) and proponents to understand Melbourne One of the highlights of the year was the encouraging migration and breeding. Water’s requirements for the design, release of the Western Port Environment construction and maintenance of diversion Science Review and the commencement Waterway diversions structures for harvesting stormwater. of an integrated environment research Melbourne Water manages about 1,900 Service standards program to inform strategic management licensed waterway diverters that extract of Western Port Bay. Melbourne Water met all of the service water from the Yarra River, Maribyrnong standards set out in its Customer Charter for River, Stony Creek, Kororoit Creek, Laverton Diversion Services for the second successive Environmental flows Creek and Skeleton Creek catchments. Water year. The number of applications received is used mainly for agricultural, industrial, The Victorian Environmental Water Holder in total was similar to last year however commercial, domestic and stock purposes. (the Water Holder) was established on we managed to improve performance, with 1 July 2011 to oversee the planning and Wetter than average weather conditions 98.6% of applications determined within the delivery of Environmental Entitlements prevailed for most of the year resulting specified time limits. across the state. in lower water demands and good The Water Holder adds transparency to flows in major waterway catchments. Flood management decision-making around environmental Consequently, there were only limited periods of pumping restrictions put in As part of implementing key objectives water delivery through the issuing of an of the Flood Management and Drainage annual Seasonal Watering Plan. place on the Yarra River and similarly limited bans and restrictions applied to the Strategy, Melbourne Water has continued The Water Holder holds three entitlements major sub-catchments. Compliance issues to collaborate with local councils and the in the Port Phillip and Westernport region: were largely confined to following up with Victorian State Emergency Service on a the Yarra Entitlement; the Tarago and Bunyip owners on dam safety issues. program of 38 local Flood Management Entitlement; and the Werribee Entitlement. Plans by 2013. This has involved work Melbourne Water is responsible for Melbourne Water has worked hard to with 30 councils to date, including 12 managing these entitlements on behalf improve its customer focus throughout in 2011–12. of the Water Holder. 2011–12, carrying out more than 300 programmed site visits to diversion Following on from this work, the Victorian Yarra environmental flows customers on top of our normal meter State Emergency Service has continued to reading and unprogrammed visits. engage local councils on the development The Yarra River has long supplied the or updating of local Flood Emergency majority of Melbourne’s drinking water and The Diversions Management Advisory Plans along with the delivery of FloodSafe the city’s reliance on the river increased Committee was reformed and expanded and StormSafe community education and during the drought, which meant less water to include additional licence holder input awareness programs for residents in known for the environment. and we met our Keilor Diverters Advisory flood locations. Group in February to discuss both water In September 2011, Melbourne Water and payment options for users in the Keilor Melbourne Water continued to make released the first significant volume of area, which has declined markedly as a good progress on the Frankston Drainage water from the Upper Yarra Reservoir farming area since the recent drought. Improvement project, the largest and most specifically targeted to benefit the complex flood mitigation project we have environment. Flows of up to 200 million Stormwater licensing ever undertaken. litres per day were released into the river below the Upper Yarra Reservoir – Although demand has waned slightly The three-stage project is a $73M a significant increase from the regular as a result of wetter weather conditions, investment to reduce the risk of flooding daily flow of 10 million litres per day. several new stormwater harvesting in Frankston’s central activity district schemes were licensed during 2011–12 and protect significant public and private Monitoring showed this release achieved and a number of other schemes are infrastructure. Stages one and two are now its objectives of flushing out sediment that proposed across urban areas. complete, with stage three underway and had accumulated in the stream bed since scheduled for completion by June 2013.

30 Melbourne Water Annual Report 2011–12 Melbourne Water met all of the service standards set out in its Customer Charter for Diversion Services for the second successive year.

Flood risk target The final stage of the works from 11 Mile Guiding urban growth Road to 13 Mile Road on the southern Delays in obtaining stakeholder approvals bank of the Bunyip Main Drain will Development planning will mean the target of reducing known complete the major components of the Melbourne Water received $66M in intolerable flood risks by 10% by 2013 rehabilitation program and increase the will only be partially achieved. developer contributions in 2011–12 capacity of the drain. ($52.8M in 2010–11). Although good progress has been made as a However, work on this final stage is yet to These contributions are paid to Melbourne result of structural works in Frankston (a 7.3% commence. We have been working through reduction once complete), there are no other Water to fund infrastructure and water complex State and Federal approvals to quality projects identified in development major structural works underway to deliver ensure appropriate mitigation and controls the remaining 2.7% of the 10% target. services schemes, and are required to provide are in place for local flora and fauna, a safe level of flood protection in developing A number of small-scale projects are particularly for the endangered Southern areas and protect the health of waterways. nearing completion, or will be completed Brown Bandicoot. Works are anticipated to by 2013, and non-structural works could start in late 2012. It was another big year for capital expenditure in developer works, with make some contribution but they will not Retarding Basins Strategy make up the full margin. $76M spent on more than 200 projects Melbourne Water manages more than ($68.8M for 156 projects in 2010–11). Bunyip Main Drain 200 flood retarding basins across its Developers constructed an additional Progress has been slower than anticipated catchment areas that reduce flood risks $21M of Melbourne Water assets, bringing on completing the Bunyip Main Drain to people and property. the total asset value for the year to $97M. Rehabilitation project between the Princes These retarding basins are managed We approved and implemented 19 new Highway and Cora Lynn. The upgrade is in accordance with the Statement of designed to increase flood protection for development services schemes to guide Obligations (which is an instrument of urban development and planning in urban local properties, roads and bridges and the Water Act 1989 issued by the Victorian reduce the risk of embankment and levee growth areas to the north, west and Minister for Water) and with regard to south-east of Melbourne. failure in the drain. guidelines from the Australian National The program of works started in 2001 and Committee on Large Dams. A major focus for the year was our work with the Growth Areas Authority, local councils, has included levee reconstruction, bed Melbourne Water has developed a strategy stabilisation, bank structural rehabilitation, water retailers and the land development to ensure its retarding basins are managed industry to ensure infrastructure is in willow and weed management, and in line with the Statement of Obligations. revegetation. place in Melbourne’s growth areas to During the year, we completed spillway provide flood protection, manage stormwater capacity assessments on 24 retarding runoff, protect waterways, and facilitate basins while another eight retarding basin water sensitive urban design and integrated assessments are underway. water management.

Melbourne Water Annual Report 2011–12 31 Corporate

32 Melbourne Water Annual Report 2011–12 34 Environmental stewardship Protect the natural environment and ensure resource availability for future generations

42 Relationships To be valued by our customers and stakeholders, and a business of choice for our partners

46 Financial sustainability Maintain financial viability and increase business value

54 Organisational capability Strengthen the capability of the organisation to deliver better customer and community outcomes

Melbourne Water Annual Report 2011–12 33 Corporate Environmental stewardship

Strategic Goals

Our Aim We will do this by: >> Using natural resources efficiently Protect the natural >> Meeting environmental environment and ensure obligations and minimising >> Minimising, recycling resource availability for environmental impacts and reusing wastes future generations. >> Conserving biodiversity >> Preserving and promoting >> Responding to climate cultural heritage change and variability >> Encouraging our suppliers through mitigation measures and partners to apply sustainable business practices.

34 Melbourne Water Annual Report 2011–12 Key Achievements

>> Won the United Nations >> Completed a Waste to Association of Australia Landfill Strategy (UNAA) World Environment >> Consolidated most of our Day Award for ‘Leadership in office-based operations into Sustainability’ one of the most sustainable >> Achieved our renewable and efficient buildings of its energy target kind in Australia >> Succeeded in reducing our >> Met our targets for office greenhouse gas emissions water, energy and paper use and waste to landfill

Disappointments Challenges

>>Did not progress investigations into >>Maximising value from the sale of greenhouse gas emissions at our Renewable Energy Certificates and the sewage treatment plants as rapidly purchase of offsets to meet our 2018 as anticipated greenhouse target >>Did not progress investigations into >>Continuing to improve system a replacement Greenhouse and Energy methodologies to more accurately Data Management System as quickly estimate emissions from our sewage as anticipated treatment plants. Undertake measurement of emissions for the plants to confirm these estimates >>Minimising waste volumes and converting waste to valuable resources >>Protecting Aboriginal heritage as we deliver on-the-ground projects >>Improving biodiversity and ensuring it continues to be protected and conserved on land and waterways managed by Melbourne Water

Melbourne Water Annual Report 2011–12 35 100% 200 150,00 36.6% Yarra Valley Water 133,918 ML 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 RAINFALL 2011–12 75% 150 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 MONTH) /

01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH)

50% / 100 75,000 0.1% Gippsland Water 287 ML 2010–2011 963 ML 01 JUL 2010 TO 30 JUN 2011 50,000 25% 50 Corporate CONSUMPTION (%) 26.4% City West Water 96,338 ML STORAGE VOLUME (%) 2011–2012 25,000

998 ML RAINFALL (M M

01 JUL 2011 TO 30 JUN 2012 STREAMFLOW (M L 0% 0 Environmental 1.4% Western Water 5,108 ML 0 JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 0 250 500 750 1000 1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 stewardship 100% TOTAL CONSUMPTION 365,559 ML YEAR ML PER DAY YEAR YEAR

100% 200 150,00 36.6% Yarra Valley Water 133,918 ML 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 RAINFALL 2011–12 75% 150 Our commitment Energy by Use 2011–12 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 MONTH) / Melbourne Water is committed to 01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH) 50% / 1001400 120075,000 1000 0.1% Gippsland Water 287 ML protecting and conserving natural assets 2010–2011 963 ML and using natural resources sustainably. 1200 100050,000 01 JUL 2010 TO 30 JUN 2011 800 M2inor5% Plant Fuels (6%) Vehicle Fuels (3%) Minor Plant Fuels (5.8%) Natural Gas (7.1%) 50

CONSUMPTION (%) Our Environment Policy specifies actions 26.4% City West Water 96,338 ML 1000 STORAGE VOLUME (%) 2011–2012 25,000800

998 ML RAINFALL (M M and outcomes to achieve maximum 600 800 Other revenue STREAMFLOW (M L Other expenses Generated E01lect JULric 2011ity (16.7% TO 30 JUN) 2012 Vehicle Fuels (3.5%) net environmental benefits to society Wat0%er (14%) Sewerage (76%) 0 600 1.4% Western Water 5,108 ML Biological assets revenue 0 Finance costs and promotes sustainable resource 600 JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 0 250 500 750 1000 1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APRDeveloper 12 MAY charges, 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 400 Administrative contributions & 400 100% TOTAL CONSUMPTION 365,559 ML management and use. YEAR WTP ExpMLo PERrt (0.7 DAY%) Imported Electricity (38.0%) 400 YEAR YEAR Water Repairs & maintenance Other (1%) contributed assets 200 Hydro Renewable Waterways charges 200 Sewerage Employee benefits We have an Environmental Management Generated (3.2%) 200 System certified to the International Biogas (24.2%) Bulk sewage services Drainage Operational 0 Bulk water services 0 Corporate 0 Depreciation & amortisation Standard ISO 14001, which establishes Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 management requirements to protect the environment, prevent pollution and improve environmental performance. We also use our Stakeholder, Environment Energy by Source 2011–12 and Public Health Assessment process and Triple Bottom Line Guidelines 1400 1200 1000 to help assess and plan for potential 1200 1000 Minor Plant Fuels (6%) Venvironmentalehicle Fuels (3%) impacts from our activities Minor Plant Fuels (5.8%) Natural Gas (7.1%) 800 1000 while balancing community benefits 800 600 800 Other revenue Other expenses and meeting efficiency requirements for Generated Electricity (16.7%) Vehicle Fuels (3.5%) Water (14%) Sewerage (76%) Biological assets revenue 600 Finance costs public spending. 600 Developer charges, 400 Administrative contributions & 400 WTP Export (0.7%) Imported Electricity (38.0%) 400 Water Repairs & maintenance Other (1%) contributed assets 200 Managing climate change Hydro Renewable Waterways charges 200 Sewerage Employee benefits Generated (3.2%) 200 and variability challenges Biogas (24.2%) Bulk sewage services Drainage Operational 0 Bulk water services 0 Corporate 0 Depreciation & amortisation A variable and changing climate could Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 have a significant impact on the capacity of Melbourne Water to deliver its services effectively. We are implementing several initiatives to ensure we are well placed Energy and greenhouse gas Our performance to adapt and respond to these risks management (refer to page 13 for more information Melbourne Water uses significant on adaptation initiatives). To minimise the potential impacts of amounts of energy to deliver water and climate change on our business and on sewerage services to its customers and Due to the potential impact of climate the people of Victoria, Melbourne Water the community. We are among the top change on our business, Melbourne Water has introduced a number of mitigation 15 electricity users in Victoria and the is committed to reducing its contribution strategies. top 150 in Australia. to total greenhouse gas emissions. Mitigation measures aim to avoid As a business we have committed to In 2011–12, we used 1.390 million emissions, improve energy and resource actively managing our own contribution to gigajoules of energy (compared to efficiency, reuse waste and substitute greenhouse gas emissions by establishing 1.602 million gigajoules in 2010–11) traditional sources of energy with cheaper a target to reduce net greenhouse gas and emitted total net greenhouse gas energy generated on site. emissions to zero by 2018 and increasing emissions including: the use of renewable energy. >>Water treatment and pumping We completed a comprehensive 64,501 tCO2e Greenhouse and Renewable Energy Strategy in 2008–09 to identify how our >>Wastewater treatment targets could be met most efficiently. Most 342,042 tCO2e of the actions in this strategy have now >>Transport been achieved and a new strategy is being 3,602 tCO2e developed. The new strategy will consider the issues raised by the Carbon Pricing >>Other energy use (including offices) Scheme, the purchase of emission permits 11,869 tCO2e and offsets and methods to further reduce >>Offsets purchased greenhouse gas emissions. 60,726 tCO2e Melbourne Water spent $22.9M this year on energy compared with $23.1M in 2010–11.

36 Melbourne Water Annual Report 2011–12 Melbourne Water achieved a 50.2% reduction in greenhouse gas emissions this year compared with 2000–01 emissions, exceeding the 42% target.

Melbourne Water water supply system with mini hydro electric stations

to Goulburn River N

Upper Yarra Upper Yarra SugarloafSugarloafSugarloaf Preston PrestonPreston YARRA VALLEY WATER

OlindaOlinda

CITY WEST WATER MelbourneMelbourne Thomson NottingNotting SilvanSilvanSilvan Hill HillHillHill Mt View Mt View

CardiniaCardinia

Port Phillip Bay SOUTH EAST WATER

Western Port Mini hydro electric power station Water supply pipeline, aqueduct Water supply storage reservoir Water supply catchment area Bass Strait Retail water area boundary

Greenhouse gas emissions Discussions with the Department of Since commissioning six mini hydro- Climate Change, through the Water electricity plants at our reservoirs, Melbourne Water achieved a 50.2% Services Association of Australia, continued Melbourne Water has investigated sites reduction in greenhouse gas emissions this this year to support development for additional mini-hydros and identified year compared with 2000–01 emissions, of system methodologies that more five suitable sites. These projects are in exceeding the 42% target. accurately represent emissions from our their design phase. sewage treatment plants. Emissions during the year totaled Energy efficiency studies 361,288 tonnes of carbon dioxide Securing on-site energy sources equivalent. This included renewable energy Melbourne Water submitted its certificates purchased to achieve the Melbourne Water operates biogas-fuelled fourth public report under the Federal renewable energy target, using our own generation facilities at its Eastern and Government’s Energy Efficiency renewable energy, and offsetting emissions Western Treatment Plants (ETP and WTP). Opportunities program, which requires from office energy use (3,783 tCO2e), During 2011–12, the ETP power station large energy-using businesses to conduct vehicle fuels (3,372 tCO2e) and air travel generated 134,645 gigajoules of electricity, energy efficiency studies to identify and (230 tCO2e) by employees. 39% of ETP’s need. The WTP power station evaluate energy saving opportunities. (owned and operated by AGL) generated National Greenhouse and Energy 233,710 gigajoules of electricity, 84% of This year’s report examined Reporting System WTP’s need, including 9,850 gigajoules implementation of efficiency exported to the grid. improvements at WTP, ETP and the We report to the Federal Clean Energy Winneke Treatment Plant. Completed Regulator under the National Greenhouse Our use and generation of renewable in December 2011, the report found and Energy Reporting System (NGERS). energy was 676,899 gigajoules in 2011–12 the potential cost savings associated Under NGERS methodologies, Melbourne (763,454 gigajoules in 2010–11). The with implementing several identified Water emitted 420,000 tonnes of amount of renewable energy we used and opportunities at the three plants carbon dioxide equivalent in 2009–10 generated as a proportion of total energy was $800,000 per year. Projects with and 451,035 tonnes in 2010–11. Our was 48.5%. total savings of $350,000 have been preliminary estimation of 2011–12 implemented to date. emissions is 422,015 tonnes of carbon However, we had to surrender 43,709 dioxide equivalent. renewable energy certificates to achieve our target of 60% of renewable energy used or exported as a percentage of total energy used.

Melbourne Water Annual Report 2011–12 37 Corporate Environmental stewardship

The opportunities mentioned in the report Sustainability in our workplace Offsetting corporate emissions include upgrading blowers and making operational changes in the secondary Leader in sustainability We offset our emissions related to vehicles, office electricity use and employee air treatment process, upgrading and Melbourne Water won a prestigious optimising pumps, and changing valve travel. In 2011–12, this amounted to about national sustainability award, the United 7,385 tonnes of carbon dioxide equivalent. pressure settings associated with the Nations Association of Australia (UNAA) sewerage treatment plant digesters. World Environment Day Award for Paper ‘Leadership in Sustainability’. At the end of 2011–12, more than 96% Paper use at Melbourne Water has of Melbourne Water’s electricity use had The award recognised Melbourne Water’s dropped, with 7.7 reams/FTE/year in been audited. Melbourne Water is currently coordinated approach to embedding 2011–12 against a target of 9.6 reams/ developing its second energy efficiency sustainability across the organisation FTE/year (compared with 8.1 reams/FTE/ strategy, the Energy Productivity Strategy. and highlighted our achievements relating year in 2010–11)3. Since 2006–07, there Environmental Resource Efficiency Plans to energy and greenhouse gas reduction, has been a 27.7% reduction in annual renewable energy production, an office paper use per FTE. In 2011–12, Melbourne Water has three sites that are industry-first sustainable fleet policy, Melbourne Water continued to ensure all required to participate in EPA Victoria’s award-winning sustainable procurement of its office copy paper was 100% recycled Environmental Resource Efficiency Plans practice, office sustainability programs and made from post-consumer-waste. program – Winneke Treatment Plant, ETP and many more initiatives. and WTP. Waste to landfill Meeting our office sustainability targets Annual progress on work done to Office waste to landfill targets were met implement these plans is reported to Melbourne Water met all of its in 2011–12. They were 33.1% below our the EPA, as required. The actions being sustainability targets in 2011–12 for water, baseline data, measured in 2006–07. We implemented are intended to reduce energy, paper and waste to landfill. We have recorded 13.4 kilograms/FTE/year compared energy and water use and waste, with most key performance indicators to measure with our target of 17.2 kilograms/FTE/year actions having greater than the mandated office-based sustainability performance. and 11.7 kilograms/FTE/year in 2010–11. three-year payback period requirement. Melbourne Water promotes sustainability Office waste was measured at the Hoppers Crossing Pumping Station was through upgrades of offices (Sustainable following locations: 100 Wellington granted an exemption from the program Sites) and behavioural change by Parade, 126 Wellington Parade because recycled water has largely employees (OfficeSmart). (levels 2, 4, 6), Western Treatment Plant, replaced the use of drinking water for Eastern Treatment Plant, Brooklyn, South OfficeSmart members are represented, and Eastern Regional Office and Winneke. pump cooling. encourage sustainable behaviours, at all Corporate Licence major Melbourne Water sites including the Recycling and compost facilities are widely Docklands office, ETP, Brooklyn, Winneke available at all large Melbourne Water sites Melbourne Water signed up for a Corporate Treatment Plant, WTP and Tarago Reservoir. and all sites with more than 10 FTEs have Licence with EPA Victoria in January 2012. ‘commingle’ recycling and compost/organics This combined the two discharge licences for Office energy recycling. There are also recycling collection ETP and WTP into a single licence and added Energy use at Melbourne Water’s former stations at the five largest sites for difficult a sustainability commitment. The benefits East Melbourne offices (100 Wellington to recycle items such as batteries, light from having a Corporate Licence include: Parade and level 6 at 126 Wellington Parade) globes, CDs, DVDs and corks, helping to further reduce our waste to landfill. >>Improved clarity on broader decreased to 1,583.4 kilowatt hours in 2011– environmental issues 12 (1,704.5 kilowatt hours in 2010–11). We Sustainable procurement recorded 3.3 megawatt hours (MWh) per >>Inclusion into a regulatory framework full-time employee (FTE) per year compared In June 2012, Melbourne Water engaged of those environmental issues that are to a target of 4.2 MWh/FTE/year.2 a new stationery supplier to provide encouraged by EPA Victoria but not environmentally preferred and cost- prescribed Our employees were encouraged to effective products, including many with a reduce their office energy use through a >>More consistent discharge standards high recycled content. About half of the series of awareness campaigns and energy commonly used stationery in our offices is >>Improved relationship with EPA Victoria consumption was further reduced at the East now sustainable, which is more than double Melbourne offices when the IT data centre the percentage previously purchased. >>Additional flexibility and reduced red tape. was relocated to a new site. The Accredited Licence status for WTP has Melbourne Water’s new office in Docklands been retained in the conversion process. is designed and built to be more energy efficient and will help us continue to reduce our energy use.

2 Actual office energy use for June 2012 was omitted from the annual result calculations and an averaged amount for June was added based on the monthly average from the previous 11 months. This was due to the staged, 3-week head office move in June 2012. Incorporating actual June figures for the East Melbourne offices would have led to lower actual energy use than the reported amount. 3Actual office paper use for June 2012 was omitted from the annual result calculations and an averaged amount for June was added based on the monthly average from the previous 11 months. This was due to the staged, 3-week head office move in June 2012, during which time the paper use results did not reflect actual use. Paper use data is collected from office paper purchased at Melbourne Water’s offices at the following locations: 100 Wellington Parade, 126 Wellington Parade, 112 Wellington Parade, Eastern Treatment Plant, Western Treatment Plant, Brooklyn, Healesville, Winneke, Tarago and Sunbury.

38 Melbourne Water Annual Report 2011–12 Melbourne Water has consolidated most of its office-based operations into one of the most sustainable and efficient buildings of its kind in Australia.

Sustainable buildings In 2011–12, Melbourne Water’s IT data Waste to Landfill Strategy centre was relocated to a new facility to Melbourne Water has consolidated most of meet our growing IT requirements. During Melbourne Water produces a significant its office-based operations into one of the the planning and development of this range and volume of wastes as part of most sustainable and efficient buildings of data centre, the focus was on minimising delivering waterways, water and sewerage its kind in Australia. whole-of-life costs and reducing services. Some of these wastes are currently disposed to landfill, which results in This major relocation project took place in environmental impact. An innovative cooling system that uses cooler outside significant (and growing) costs. Reducing June 2012 and involved moving nearly 750 this waste could achieve cost savings and staff from four offices in East Melbourne air to regulate the inside temperature will reduce power consumption. environmental and social benefits for the to a newly-constructed 6 Star Green Star business and the wider community. building (as designed) at 990 La Trobe During the year our South East Regional Street, Docklands. The consolidation Office was officially awarded a 5 Star A Waste Management Review, completed of operations will enable increased Green Star ‘Office as Built’ certified in 2010, identified all future waste streams sustainability through less water and rating from the Green Building Council of volumes and costs, and recommended energy use. Australia. This rating recognises ‘Australian the development of a Waste to Landfill Strategy. This strategy was developed in The new building is expected to enhance Excellence’ in environmentally sustainable building practices. consultation with EPA Victoria and the business efficiency by enabling better water retailers and completed in 2011. collaboration between various business The building incorporates solar panels, units which were previously spread certified timber products and recycled During 2011–12, Melbourne Water across several locations. Greater business materials, the use of waste heat from the continued to seek solutions to convert efficiency has also been achieved by taking treatment plant for heating and cooling, all of its wastes into more valuable advantage of competitive lease costs rainwater harvesting for gardens and toilet resources. This search resulted in Melbourne at Docklands consistent with Victorian flushing, and water sensitive landscaping. Water looking outside its business to Government planning policy to consolidate other waste managers in an effort to find activity centres. technological synergies, cost-effective and environmentally sound solutions and markets for reusing its waste products.

Melbourne Water Annual Report 2011–12 39 Corporate Environmental stewardship

Melbourne Water Biodiversity

N

MARIBYRNONG CATCHMENT

YARRA RIVER CATCHMENT

WERRIBEE CATCHMENT

DANDENONG CATCHMENT

Biosites of Regional, State, National Port Phillip Bay and International Significance on or adjacent to Melbourne Water Land WESTERNPORT CATCHMENT RAMSAR Wetland Western Port Biosite or Waterways Site of Biodiversity Significance Parks Victoria Land DIWA Wetland Primary River Basin Catchment Waterways & Drainage Boundary Bass Strait Melbourne Water

Protecting biodiversity Biodiversity Strategy Biodiversity conservation management Melbourne Water is a significant Melbourne Water’s Biodiversity Strategy Melbourne Water manages two Ramsar- landholder and waterways manager ensures a consistent approach to listed wetlands of international importance within the Port Phillip and Westernport biodiversity management across the and 44 other properties identified as region. We actively develop and implement organisation and sets priority actions sites of biodiversity significance. These strategies and projects that support for improvement. Some of the actions sites contain biological communities or biodiversity, in compliance with the undertaken in 2011–12 included: populations of rare or threatened species Victorian Biodiversity Strategy. of plants and animals. >>Developing a Code of Practice for Native Vegetation in conjunction with The Ramsar-listed WTP is one of the most metropolitan water retailers. This code important refuges for waterfowl in Victoria. is in line with the template developed It also supports migratory shorebird by VicWater and endorsed by the populations, a significant population of Department of Sustainability and the nationally endangered Growling Grass Environment in 2011 Frog, and native grassland areas containing the endangered Spiny Rice-flower. >>Preliminary scoping relating to Carbon Farming Initiative opportunities and Several research projects were initiated other biosequestration trends have or continued during 2011–12 to improve been examined and will be incorporated our knowledge and understanding of into the Greenhouse Strategy review ecosystem functioning at WTP. Our >>Better coordination between management of the site includes water Melbourne Water’s different management as well as fox, cat, rabbit and business units to benefit all sites weed control programs. of biodiversity significance. The Ramsar-listed Edithvale-Seaford Wetlands are included within the larger Carrum Wetlands Important Area. This includes the ETP and several adjacent wetland areas.

40 Melbourne Water Annual Report 2011–12 Melbourne Water’s Biodiversity Strategy ensures a consistent approach to biodiversity management across the organisation and sets priority actions for improvement.

These wetlands are most important Cultural heritage There have been some challenges for waterbird and wetland vegetation regarding the practicalities of communities but also support a Melbourne Water continues to develop implementing the current legislation and community of microbats. A Discovery and strengthen its relationship with considering cultural heritage up-front as Centre has been established at the site Registered Aboriginal Parties (RAPs) and part of the planning process. There have to educate students and the community Traditional Owner groups to ensure we also been challenges with regard to the about the importance of wetlands and the protect Aboriginal heritage as we deliver risks associated with small maintenance plants and animals they support. on-the-ground projects. works in restricted timeframes. However, we have overcome these challenges by Vegetation assessments were undertaken We also work hard to hear and understand what is important to Traditional Owners continuing to work closely with Native at 10 other Melbourne Water sites of Title, RAP and Traditional Owner groups. biodiversity significance to record and about the land and waterways we manage monitor the quality of their vegetation. on behalf of the Victorian community. Melbourne Water continues to update The importance of cultural heritage management plans for its sites of to Melbourne Water is detailed in our biodiversity significance. During 2011–12, Strategic Direction, where we commit this work focused on developing a strategy to preserving and promoting cultural for the protection and enhancement of heritage. This is further embedded in our biodiversity values across the Hallam policies and procedures such as the RAP- Valley floodplain. The effectiveness of endorsed Cultural Heritage Risk Matrix, the our biodiversity management program Indigenous Cultural Heritage Guidelines, is assessed through monitoring of key and a commitment to cultural awareness fauna and flora. training for our employees.

Melbourne Water Annual Report 2011–12 41 Corporate Relationships

Our Aim

To be valued by our customers We will do this by: >> Seeking and respecting and stakeholders, and a business >> Strengthening relationships customer and stakeholder of choice for our partners. with customers, stakeholders views in our decision-making and suppliers >> Collaborating widely >> Developing a deeper to find better solutions understanding of our through knowledge sharing customers’ needs and genuine partnership.

42 Melbourne Water Annual Report 2011–12 Key Achievements

>> Developed and started to >> Awarded ‘Australasian >> Working on a long-term implement a Customer Organisation of the Year’ vision for Strategy to ensure we by the International and the surrounding continue to improve the Association for Public area in consultation with way we respond and relate Participation, recognising stakeholder organisations to customers the work our people and the local community >> Forged better relationships have done through >> Completed dam safety and coordination among our Stakeholder and works at Toorourrong organisations responsible Engagement Strategy Reservoir with sensitivity for flood and drainage to community concerns – management preserving its heritage and recreational values

Disappointments Challenges

>>Failed to achieve a 100% performance >>Reflecting on the results of our target of responding to complaints reputation survey to ensure we continue referred to the Energy and Water to improve our relationships with Ombudsman (Victoria) in a timely customers and stakeholders manner (scored 97%) >>Improving flood management planning in conjunction with local councils and increasing community education and preparedness for floods >>Working with communities and local councils around major project sites to help deliver community legacy projects within agreed timelines

Melbourne Water Annual Report 2011–12 43 Corporate Relationships

Building strong relationships Reputation survey reveals room Stakeholder engagement to improve Melbourne Water’s success in achieving its In October 2011, Melbourne Water new vision of Enhancing Life and Liveability In September 2011, Melbourne Water was named the inaugural Australasian depends on building strong partnerships commissioned an independent research Organisation of the Year by the and relationships with customers and consultant to assess its reputation among International Association of Public stakeholders. We are committed to listening customers and stakeholders and to measure Participation (IAP2). The IAP2 promotes to their needs, being responsive and pooling its reputation in comparison with global values and leading practices associated our knowledge and expertise to create benchmarks. with involving the general public in better solutions. decisions that impact on their lives. The research was undertaken to obtain Melbourne Water’s new Strategic an assessment of our effectiveness in the The award recognised Melbourne Water Direction, Customer Strategy and following key business areas: for developing and embedding a corporate Stakeholder Engagement Strategy affirm Stakeholder Engagement Strategy within its commitment to open communication, >>Performance (financial management, the organisation as well as helping build the meaningful engagement and high quality efficiency and growth) capacity of our people and project partners. customer service. >>Products/services (quality of service Many Melbourne Water projects and Customer Strategy embeds new mindset delivery, value for money, responsiveness) programs impact on the lives of the >>Innovation (leading) community we serve, and we recognise The importance of strong relationships has that effective engagement in planning long been acknowledged at Melbourne Water. >>Workplace (safety, fair, equal) and delivery phases provides benefits for We understand that working together >>Governance (open and everyone involved. transparent, ethical, fair) with our customers, stakeholders and The development of the Stakeholder partners is essential to help achieve our >>Citizenship (environmentally Engagement Strategy has resulted in vision of Enhancing Life and Liveability. responsible, community impacts) clear benefits to the organisation, but This commitment is demonstrated in our also awareness that we still have room >>Leadership (organisation, clear vision). evolving organisational culture and clearly to improve. How and when we involve stated in our new Strategic Direction. From the 1,700 surveys completed, customers and stakeholders in our Our Customer Strategy was framed using Melbourne Water’s overall reputational decision-making is a continuing focus. nearly 4,000 pieces of feedback from score was 63.7 out of 100, which is customers, stakeholders and partners, and categorised as ‘average’ and is in line Community engagement from diverse sources such as our Reputation with the global average for utilities Understanding and advice for Survey results, the Water Services Association companies. The research highlighted flood-hit communities of Australia benchmarking report, and inconsistency in the way Melbourne Water feedback from the Strategic Direction process. is perceived by both stakeholders and customers, demonstrating opportunities Engaging with other agencies, councils and the community about flooding is integral To ensure a ‘customer focus’ mindset for improvements in our relationships to reducing the impacts of flooding in the was embedded across the organisation, with these groups. greater Melbourne region. we implemented a series of change management strategies. This included There was also recognition across all groups (including employees) that Melbourne Melbourne Water continued to engage and conducting organisation-wide workshops provide advice to councils and property where customers could provide honest and Water should be more focused on innovation and that communication owners, especially in the east and south- detailed feedback. We held panel discussions, east of the region, following above-average master classes with management, launched with a number of our biggest customer groups needs to be more responsive, rainfall and consequent flooding in 2011 internal behavioural change campaigns, and June 2012. developed individual and team-level Action consultative and timely. Plans and wrote a Customer Strategy Survey results have already been used to Melbourne Water attended information that will complement our Stakeholder inform development of Melbourne Water’s sessions hosted by councils and local Engagement Strategy. new Strategic Direction, specifically in members of Parliament, helping to forge improved relationships and coordination By generating awareness of the importance the areas of customer focus, commercial acumen, innovation and adaptability. among the organisations responsible for of customer relationships and building flood and drainage management. Through a commitment to improving those Working with our retail water customers these sessions, we have been able to gather relationships, we will improve satisfaction information to help update data, improve for our customers, stakeholders and partners. Melbourne Water collaborates closely with flood management planning with councils, water retailers including City West Water, provide advice, and help people better South East Water, Yarra Valley Water and understand the flood risks in their area. Western Water. Our VicSES sponsorship for community We are working with water retailers education and awareness supported a on the 2013-18 Water Plan to consider door knocking campaign targeting 10,000 the best way of delivering services to flood prone properties, aimed at increasing customers, taking into account the needs homeowners’ preparedness for floods. of Melbourne’s growing population.

44 Melbourne Water Annual Report 2011–12 Melbourne Water Customer Mindset Visual Expanding our online presence As more people embrace digital communications, Melbourne Water continues to improve communication, engagement and customer service via its online presence. We launched a free Android application for storage levels in December 2011 which has been downloaded 2,241 times and receives a 4.7 out of 5 star user rating. Our free iPhone application continues to be popular with 39,887 downloads and a 4 out of 5 star user rating. Work continues on the upgrade of our external websites to provide more relevant and useful information and services to our customers and stakeholders, and to make our websites easier to use.

Community education Melbourne Water has updated and expanded its educational tools over the last year to provide the community with information on waterways and other areas of our business. New videos and interactive activities were created to support learning about natural and constructed wetlands. We also developed a model for use in schools and at festivals and community events that demonstrates the principles of integrating use and management of water in urban areas. These resources will support capacity building programs on aspects of the urban water cycle. The development of Flood Management However, when Melbourne Water began its Plans with councils has assisted in engagement activities, it was apparent it was Educational garden wins award identifying flood prone areas and helped still a very difficult time for the community define responsibilities around flood and and we had clearly underestimated the Melbourne Water joined forces with three drainage management – leading to better personal connection local people felt towards metropolitan water retailers, the Department planning and coordination of urban Park. of Sustainability and Environment, ® development and required drainage. Savewater! and landscape designer, Phillip Significant community concerns were raised Johnson, to produce an award winning garden Partnering with local government with Melbourne Water and the project on integrated water management at the was subsequently delayed again due to a 2012 Melbourne International Flower and After seeking feedback from local heritage approval process initiated by local Garden Show. government, Melbourne Water implemented residents. We later provided the community a number of initiatives to make it easier for with the reassurances and information they The educational display was designed to council staff to get the information they sought, including heritage preservation and change people’s expectations about how need from us, including what we offer by interpretative signage at the park. water is managed in the urban landscape, way of services, guidelines and assistance. creating a vision of integrated water In 2011–12 we: We worked hard to ensure the final product management and the contribution water tied in with Parks Victoria’s rehabilitation makes to urban liveability. >>Distributed Waterways Local Updates for works and left a space that respected the 38 municipalities in the region – these are park’s heritage and recreational values. Energy and Water Ombudsman reports on activities funded principally by Melbourne Water has since received the Waterways and Drainage Charge numerous compliments on the care and The Energy and Water Ombudsman >>Introduced a single-point email address respect taken to preserve these values. (Victoria) investigates and resolves dedicated to council enquiries disputes between Victorians and their Plan for Sugarloaf Reservoir’s future energy and water service providers. >>Conducted a seminar on Melbourne Water Melbourne Water is one of 21 Victorian Melbourne Water is developing an integrated funding, capacity building and partnership water businesses that are members Place Plan for Sugarloaf Reservoir and the opportunities – attracting participants of the scheme. from 27 councils. surrounding area known as the Christmas Hills district. This year we responded to 61 investigated During the year we also continued to engage cases, 31 more cases than the previous The aim of the Place Plan is to provide a long- with councils about our capital works projects year. Inquiries covered issues including term vision for the future of the reservoir and ongoing management of built and maintenance and building overlay, and the surrounding area, and to identify the natural assets. developments, drainage maintenance, objectives necessary to create that future. water licensing, flood management, jetty Community concerns respected Melbourne Water engaged with a wide range access, jetty replacement, early recovery at Toorourrong Reservoir of stakeholders and the local community on of desalination costs and property damage. the draft plan. Dam safety works at Toorourrong Reservoir We are working to resolve two of these re-commenced after being put on hold in The inclusion of individuals and organisations cases which remain open – one relating 2009 due to the . that have a role and interest in the reservoir to proposed development works, the other is essential to ensure the plan is practical and to maintenance. relevant for all.

Melbourne Water Annual Report 2011–12 45 Corporate Financial sustainability

Our Aim

Maintain financial viability We will do this by: >> Continuously improving and increase business value. >> Maintaining sound financial business productivity governance >> Earning a commercial >> Operating efficiently and return on investments. managing commercial risk effectively >> Investing prudently and efficiently

46 Melbourne Water Annual Report 2011–12 Key Achievements

>> Cash returns to government >> Efficiency in the delivery of of $289.3M capital projects including >> Delivered a net profit after the Melbourne Main Sewer tax expense of $269.9M Replacement which was under budget >> Return on equity of 5.9% >> Improved business support >> Successfully delivered for incidents, during events $547.1M of capital works, and training mostly through our alliances >> Improved risk reporting to the Board to enable more efficient risk governance >> Developed and implemented an innovative maintenance cost model

Disappointments Challenges

>>Delay in the commissioning of the >>Clarifying regulatory requirements Victorian Desalination Plant resulted and customer priorities for our next in significant financial impacts. This Water Plan (2013–18), including included early recovery of revenue from appropriately managing the significant customers that was originally intended financial impacts associated with to fund the plant’s operation, which has the implementation of and delay since been delayed in commissioning of the Victorian Desalination Plant – while still demonstrating financial sustainability >>Continuing to demonstrate operational efficiency to our stakeholders >>Continued delivery of significant capital works on time and within budget, which provide value for money to our customers and other stakeholders

Melbourne Water Annual Report 2011–12 47 100% 200 150,00 36.6% Yarra Valley Water 133,918 ML 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 RAINFALL 2011–12 75% 150 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 MONTH) /

01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH)

50% / 100 75,000 0.1% Gippsland Water 287 ML 2010–2011 963 ML 01 JUL 2010 TO 30 JUN 2011 50,000 25% 50 CONSUMPTION (%) 26.4% City West Water 96,338 ML Corporate STORAGE VOLUME (%) 2011–2012 25,000

998 ML RAINFALL (M M

01 JUL 2011 TO 30 JUN 2012 STREAMFLOW (M L 0% 0 1.4% Western Water 5,108 ML Financial 0 JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 0 250 500 750 1000 1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 100% TOTAL CONSUMPTION 365,559 ML YEAR sustainability ML PER DAY YEAR YEAR

100% 200 150,00 36.6% Yarra Valley Water 133,918 ML 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 RAINFALL 2011–12 75% 150 Financial performance Operating Revenue ($M) 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 MONTH) / 01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH) During 2011–12, Melbourne Water 50% / 100 75,0001400 1200 1000 0.1% Gippsland Water 287 ML made cash payments to the Victorian 2010–2011 963 ML Government of $289.3M (compared with 50,0001200 1000 01 JUL 2010 TO 30 JUN 2011 800 25% Minor Plant Fuels (6%) Vehicle Fuels (3%) M50inor Plant Fuels (5.8%) Natural Gas (7.1%)

CONSUMPTION (%) $173.1M in 2010–11). This consisted of 26.4% City West Water 96,338 ML 1000 STORAGE VOLUME (%) 2011–2012 25,000 800

998 ML RAINFALL (M M $118.5M in dividends (paid in arrears on 600 STREAMFLOW (M L 800 Other revenue Other expenses 01 JUL 2011 TO 30 JUN 2012 Generated Electricity (16.7%) Vehicle Fuels (3.5%) 0% Water (14%) Sewerage (76%) 0 2010–11 financial results), income tax 600 1.4% Western Water 5,108 ML 0 Biological assets revenue Finance costs equivalent payments of $133.4M, a financial 600 JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 0 250 500 750 1000 1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 DeveloperAPR 12 MAY charges, 12 JUN 12 400 Administrative contributions & 400 100% TOTAL CONSUMPTION 365,559 ML YEAR ML PER DAY WTP ExpYEARort (0.7%) Imported Elaccommodationectricity (38.0%) levy of $34.0M and local 400 YEAR Water Repairs & maintenance Other (1%) contributed assets government rate equivalents of $3.6M. 200 Hydro Renewable Waterways charges 200 Sewerage Employee benefits Generated (3.2%) 200 Biogas (24.2%) We also incurred expenditure to the Bulk sewage services Drainage Operational 0 Bulk water services 0 Corporate 0 Depreciation & amortisation Shaft Diesel (0.3%) Hydro Recovered VictorianGenerated (0.6% Government) of $19.4M in land 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 tax ($14.2M in 2010–11) and $4.1M in payroll tax ($4.1M in 2010–11). Delays in the commissioning of the Victorian Desalination Plant had a Operating Expenditure ($M) significant impact on our financial 1400 1200 performance. In 2009, the Essential 1000 Services Commission (ESC) determined 1200 1000 Minor Plant Fuels (6%) Vehicle Fuels (3%) Minor Plant Fuels (5.8%) Natural Gas (7.1%) Melbourne Water’s prices for 2009–10 to 800 1000 800 2012–13, which accounted for the revenue 600 800 Other revenue Other expenses Generated Electricity (16.7%) Vehicle Fuels (3.5%) needed to recover forecast obligatory Water (14%) Sewerage (76%) Biological assets revenue 600 Finance costs 600 payments for the desalination plant in Developer charges, 400 Administrative contributions & 400 2011–12 and in 2012–13. WTP Export (0.7%) Imported Electricity (38.0%) 400 Water Repairs & maintenance Other (1%) contributed assets 200 Hydro Renewable Waterways charges 200 SewerageDelays in commissioning the plant Employee benefits Generated (3.2%) 200 Biogas (24.2%) Bulk sewage services Drainagemeant we were not required to make Operational 0 Bulk water services 0 Corporatethese payments in 2011–12, which 0 Depreciation & amortisation 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) resulted in the revenue we collected from 2007–08 2008–09 2009–10 2010–11 2011–12 customers being higher than our costs by approximately $225.0M, generating a higher than anticipated profit after tax of $269.9M ($157.8M in 2010–11). Total assets increased to $10,034.1M Financial Sustainability Strategy In agreement with the water retailers at 30 June 2012 from $9,754.5M at 30 June 2011. This increase is mainly due Melbourne Water’s vision of Enhancing Life and with oversight from the ESC, we and Liveability is underpinned by providing have committed to returning the funds to the investment of $547.1M ($753.1M in 2010–11) in capital works. efficient, affordable and valued services to collected to customers. all customers and stakeholders. Total liabilities increased to $5,495.1M Operating revenue for 2011–12 was However, changes in our operating $1,240.2M ($997.3M in 2010–11). The at 30 June 2012 from $5,379.7M at 30 June 2011. This increase is mainly environment from time to time can key reason for this increase on last year is challenge our ability to achieve this. increased water, sewerage, and waterways due to an increase in interest-bearing liabilities (borrowings) of $217.0M due Global economic volatility, the introduction and drainage revenue resulting mainly from of desalinated water and affordability higher prices approved by the ESC in our to the funding required to deliver our capital works program. pressures are among several recent drivers current Water Plan. The increased revenue that have led to the need for Melbourne was primarily intended to fund the Victorian We achieved a return on equity of 5.9% Water to continue to improve its financial Desalination Plant’s operational costs (that compared with 3.6% in 2010–11 and our performance. have now been deferred as a result of delays target for 2011–12 of ≥ 0.5%. This increase in commencement) as well as fund our is mainly due to the increase in net profit This was highlighted as part of a review operating and capital expenditures. after tax as explained above. performed by Deloitte during the current financial year. The key findings Operating expenditure was $867.4M Our gearing ratio of 45.8% (45.3% in of this review were that the costs of ($783.3M in 2010–11). The key drivers 2010–11) and our interest cover (cash) these investments, combined with the for the increase, compared to last year, ratio of 3.7 times (2.8 times in 2010–11) financial obligations of the new Victorian include increased finance expenses were also better than our target ranges of Desalination Plant, have placed pressure (due to higher borrowings required to ≤ 66.9% and ≥ 1.5 times (respectively). on Melbourne Water’s key measure of fund the capital works program), increased financial sustainability – its credit rating. depreciation and amortisation expenses Maintaining a good credit rating is critical (due to increased asset base following to ensuring the costs associated with capital works) and increased defined Melbourne Water’s borrowings remain low benefit superannuation fund expenses and don’t impact on the price customers (due to a book loss on the value of the pay for our services. fund as a result of lower bond rates and decline in share market conditions).

48 Melbourne Water Annual Report 2011–12 100% 200 150,00 36.6% Yarra Valley Water 133,918 ML 1992–1999 STREAMFLOW 30 YEAR LTA 1,320 ML RAINFALL 30 YEAR LTA 01 JUL TO 30 JUN 1992-1999 (8 YEAR AVERAGE) 125,000 STREAMFLOW 2011-12 RAINFALL 2011–12 75% 150 35.5% South East Water 129,908 ML 2007–2011 1,029 ML 100,000 MONTH) /

01 JUL 2007 TO 30 JUN 2011 (5 YEAR AVERAGE) MONTH)

50% / 100 75,000 0.1% Gippsland Water 287 ML 2010–2011 963 ML 01 JUL 2010 TO 30 JUN 2011 50,000 25% 50 CONSUMPTION (%) 26.4% City West Water 96,338 ML STORAGE VOLUME (%) 2011–2012 25,000

998 ML RAINFALL (M M

01 JUL 2011 TO 30 JUN 2012 STREAMFLOW (M L 0% 0 1.4% Western Water 5,108 ML This year, $547.1M of capital works were delivered through projects 0 JAN 97 JAN 98 JAN 99 JAN 00 JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 0 250 500 750 1000 1250 1500 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11 DEC 11 JAN 12 FEB 12 MAR 12 APR 12 MAY 12 JUN 12 100% TOTAL CONSUMPTION 365,559 ML YEAR ML PER DAY includingYEAR teams working on the Melbourne Main Sewer Replacement, YEAR Northern Sewerage Project and Eastern Treatment Plant upgrade.

Capital Expenditure ($M) conflicts of interest. These documents are regularly updated. The Corporate Secretary

1400 1200 maintains a Register of Director’s1000 Interests and a register of gifts and invitations 1200 1000 Minor Plant Fuels (6%) Vehicle Fuels (3%) Minor Plant Fuels (5.8%) Natural Gas (7.1%) accepted by directors or employees.800 1000 800 In maintaining a safe and healthy600 working 800 Other revenue Other expenses Generated Electricity (16.7%) Vehicle Fuels (3.5%) environment, the Board has approved Water (14%) Sewerage (76%) Biological assets revenue 600 Finance costs 600 Developer charges, behavioural and workplace policies400 for Administrative contributions & 400 WTP Export (0.7%) Imported Electricity (38.0%) 400 Water specific purposes, such as occupational Repairs & maintenance Other (1%) contributed assets 200 Hydro Renewable Waterways charges 200 Sewerage health and safety and discrimination. Employee benefits Generated (3.2%) 200 Biogas (24.2%) Bulk sewage services Drainage These policies are distributed and widely Operational 0 Bulk water services 0 Corporate publicised to our employees for their0 Depreciation & amortisation Shaft Diesel (0.3%) Hydro Recovered Generated (0.6%) 2007–08 2008–09 2009–10 2010–11 2011–12 2007–08 2008–09 2009–10 2010–11 2011–12 information and assistance. 2007–08 2008–09 2009–10 2010–11 2011–12 Our governance procedures Melbourne Water’s policy is to adopt In response to the findings, Melbourne Efficient asset management appropriate corporate governance practices Water is preparing a Financial Sustainability and regularly review them to ensure we Strategy which outlines the objectives, An innovative maintenance cost model are up-to-date with best practice. operating activities, governance structure has been developed and implemented to ensure sustained levels of service from and key performance indicators necessary to This year the Board held its first Community Melbourne Water’s extensive mechanical achieve the aim of financial sustainability as Forum in compliance with the Water and electrical asset base. set out in Melbourne Water’s new Strategic Industry Code of Practice endorsed by the Direction, and to bring a commercial focus This integrated approach to forward former Minister for Water on 5 October to all of its activities. planning considers preventative 2010. This increased the transparency of its maintenance, breakdown maintenance and operations and improved its engagement Efficiency through collaboration renewal requirements through application with the community. The Board Community of a defined Asset Management Strategy. Forum is planned to be an annual event. This year $547.1M of capital works were delivered through: It includes the development of a As part of these improvements, all Board probabilistic model of unscheduled members now receive papers in electronic >>Project teams working on the Melbourne maintenance costs based on historical data, form. A structured approach to Board Main Sewer Replacement, Northern the impact of newly constructed assets, and development (both at a Board and individual Sewerage Project and Eastern Treatment consideration of forecasted asset growth. Board member level) has also been adopted. Plant upgrade Risk management >>System bundled projects through These enhancements have enabled Melbourne Water to understand and quantify program alliances. These alliances bring Melbourne Water adopts a balanced uncertainty in the preparation of budgets, together skilled and experienced people approach to risk management that which has provided a basis for challenging from the design and construction considers its commercial, social and program costs within a risk-based context. industries to enhance innovation and environmental responsibilities with increase operational efficiency regard to short-term and long-term goals. >>Minor works through maintenance Corporate governance and risk management Risk management is used to ensure service partners Melbourne Water understands its business >>Other traditional project arrangements. Ethics and values risks and manages them consistently. Melbourne Water’s directors and employees Effective and efficient management of risk Strong governance is critical to the success is central to the achievement of our vision. of the alliance model. In 2011–12, we are committed to operating ethically and continued independent validation of in the best interests of customers, the Melbourne Water adopts a ‘whole of project cost estimates; managed an audit Victorian Government, employees, suppliers business’ approach by considering risks on program to ensure compliance with policy, and other stakeholders. The Board has a group, team and project basis. Trends and procedures and agreed commercial terms; adopted a Director’s Code of Conduct. commonalities are also identified across and administered a continual improvement these areas. program, performance/value reporting and All directors, managers and employees post-project reviews. are expected to perform their duties with To effectively manage risks across the integrity and honesty. This expectation organisation, risk assessments are conducted extends to dealing with each other, on a regular basis to identify the: customers, suppliers and the community. Melbourne Water employees and managers >>Likelihood or probability of a risk occurring must comply with Melbourne Water’s Code >>Consequence of a risk occurring of Conduct, which was updated this year. >>Effectiveness of mitigating strategies Policies and procedures exist for in place to manage risks. directors and employees in relation to the identification of actual and potential

Melbourne Water Annual Report 2011–12 49 Corporate Financial sustainability

Corporate governance and risk Insurance and incident Statements of Obligations management continued management framework Two Statements of Obligations, issued by The capital prioritisation process uses risk To assist with mitigating the commercial, the Minister for Water pursuant to Section assessment as a key tool for determining social and environmental impact of risk 4I of the Water Industry Act 1994, are the need for, and relative timing of, events, Melbourne Water has many control applicable to Melbourne Water: investments. Operational risks are measures in place including an emergency managed daily by the organisation and and incident management framework and 1) The Statement of Obligations applicable through specialised management systems. a comprehensive insurance portfolio. from July 2004 formalises Melbourne Water’s obligations in relation to the Strategic risk As part of this framework, Melbourne Water performance of functions and exercise has developed emergency management of powers including the areas of: To assist in the strategic management of and contingency plans, which are regularly risks at an organisational level, Melbourne tested and reviewed. >>The Water Plan Water has identified key strategic risks and >>Governance and risk management assessed each risk based on the current In addition to local emergency risk level. management arrangements, Melbourne >>Planning and service delivery Water assists in the development of >>Environmental management Melbourne Water actively manages industry response plans and protocols. We >>Waterways and drainage strategic risk with a strong focus on work with water retailers and government >>Reporting continuous improvement. Our risks will departments/agencies that assign roles and continue to be managed through a Risk responsibilities in the event of large-scale >>Compliance. Management Framework comprising major incidents. These plans are also tested and 2) The Statement of Obligations applicable elements such as: certified management reviewed with water retailers. from 1 July 2009: systems; appropriately skilled people and sound operational procedures; a robust Audits and risk reviews (a) Imposes obligations on Melbourne capital works program; sound technological Water in relation to our water supply Melbourne Water continually reassesses its applications such as our Supervisory function established under section risk profile through external reviews by subject Control and Data Acquisition (SCADA), 171B of the Water Act 1989, and the matter specialists and a comprehensive risk- Asset Management and GIS systems; and exercise of our powers. close working relationships with the water based internal audit program. (b) Clarifies Melbourne Water’s role as industry, government departments, local In addition to these reviews, Melbourne manager of the Melbourne headworks government, customers, developers and Water undertakes quarterly self-assessments system in relation to the obligations the community. on the current management of risks and of the metropolitan water retailers as the identification of new or emerging risks Melbourne Water has identified the holders of certain water entitlements. following key strategic risks: and opportunities. The results of these reviews are presented to the Board via its On 26 March 2012, the Minister for Water >>Health, safety and security of people, Audit and Corporate Risk Committee, which issued an amendment to this Statement of property and environment actively oversees Melbourne Water’s risk Obligations, the purpose of which was to >>Environmental damage to Melbourne’s management processes. set out the new rules for the future use of the North-South Pipeline. waterways/bays Attestation on Compliance with the Australian >>Financial and governance framework /New Zealand Risk Management Standard Melbourne Water’s Board monitors >>Recycled water (quantity and quality) compliance with these Statements of I, Eleanor Underwood, certify that: >>Engaging, understanding and Obligations and reports any significant working with key stakeholders >>Melbourne Water Corporation has non-compliance to the Minister. and the community risk management processes in place consistent with the Australian/New >>Water supply Zealand Risk Management Standard >>Water quality (AS/NZS ISO 31000:2009) >>Asset lifecycle >>An internal control system is in >>Capital delivery place that enables the executive to understand, manage and satisfactorily >>Impact of flood on the community control risk exposures >>2018 greenhouse target >>The Audit and Corporate Risk Committee >>Recruiting, developing and verifies this assurance retaining our employees >>The risk profile of Melbourne Water >>Delivering obligations in the Water Plan Corporation has been critically reviewed >>Biosolids and by-products within the last 12 months. (quantity and quality).

Eleanor Underwood Chairman Melbourne Water Corporation

50 Melbourne Water Annual Report 2011–12 Board of Directors In making new appointments to the Board, Pursuant to a Statement of Obligations the Victorian Government ensures the issued by the Minister, the outcomes of The Minister for Water, in consultation Board has the necessary combination these performance reviews are reported to with the Treasurer, appoints the directors of skills and experience. The Managing the Treasurer and the Minister. The Board of Melbourne Water for terms of up to four Director is appointed by the Board, of Directors currently comprises a non- years and the Victorian Government sets subject to the approval of the Minister in executive Chairman, five non-executive their remuneration. Directors are eligible consultation with the Treasurer, for a term directors and the Managing Director. for reappointment for subsequent terms. of up to five years. Annual reviews are conducted of the performance of the Board as a whole and of individual members.

Eleanor Underwood Warren Hodgson Terry Larkins Chairman Director PSM Director Eleanor Underwood took up the position of Warren Hodgson was appointed to the Board on Chairman in April 2010. Ms Underwood came to 1 July 2008. Mr Hodgson was previously Secretary, Terry Larkins was appointed to the Board on Melbourne Water after serving 10 years on the Department of Innovation, Industry and Regional 1 January 2004. He was appointed Chairman of South East Water Board, including five years as Development, and before that, Under Secretary, Western Water in 2001. Mr Larkins has extensive its Chair. Before that, she was Deputy Chairman Department of Treasury and Finance. Mr Hodgson experience in the water industry and local of South Gippsland Water and a Director of has a background in the manufacturing industry, government including as Secretary of the former Audit Victoria and the Water Training Centre. Ms qualifications in science and engineering, Gisborne Water Board and Chief Executive of the Underwood is a management consultant with and is a graduate of the Australian Institute of Shire of Gisborne. He has been a member of the private sector experience in general management, Company Directors. VicWater Board since 2005 and Chair from 2007– accounting and marketing. She has also worked as 08. He is active in a number of community groups a senior academic planner at RMIT University. in health services, conservation and education.

Peter Vines Maria Wilton Dana Hlavacek Director (Deputy Chairman) Director B. Com (Hons), M.Acc, FCA, GAICD Director Peter Vines was appointed to the Board in Maria Wilton was appointed to the Board on October 2005. Mr Vines has held chief executive 1 October 2009. Ms Wilton is a chartered Dana Hlavacek was appointed to the Board on and executive management positions in the financial analyst with 20 years experience in 1 October 2011. Ms Hlavacek is a finance energy and infrastructure sector, including the investment management industry. She was executive with considerable experience with the directorships in various utility companies in Director of the Transport Accident Commission treasury of Rio Tinto and, prior to that, KPMG. She is Australia and internationally. Mr Vines holds Board until 30 June 2009. Ms Wilton is also a Governor of the Arts Centre Melbourne Foundation qualifications in civil engineering, economics and the Managing Director of Franklin Templeton and is also on the board of RSPCA Victoria. management. He is a member of the Australian Investments Australia Ltd. Ms Hlavacek is a member of the Salvation Army Institute of Company Directors and a member Corporate and Philanthropic Committee and of the of the Institute of Engineers, Australia. Brotherhood of St Laurence’s Audit Committee.

Shaun Cox Merran Kelsall Mary Anne Hartley SC Managing Director B.Com (Hons), FCA, MBA BA (Hons), LLB (Hons) Former Deputy Chairman Director Shaun Cox commenced as Managing Director of Melbourne Water on 8 March 2011. Shaun Merran Kelsall was appointed to the Board on Mary Anne Hartley was appointed to the Board is currently a Board member (and former Chair) 1 January 2001. Ms Kelsall is an independent on 1 July 2002. A barrister, she was appointed as a of the Smart Water Fund and the Water Services company director and consultant. Senior Counsel on 24 November 2009. Ms Hartley Association of Australia. He holds a degree in was a director of several government corporations civil engineering, a Masters of Engineering and Ms Kelsall resigned from the Board on in the maritime and energy sectors. Technology Management and is an Adjunct 30 September 2011. Professor at the University of Queensland. Before Ms Hartley resigned from the Board on joining Melbourne Water, Mr Cox held the position 6 October 2011. of Managing Director of South East Water and Chief Executive Officer of Gold Coast Water.

Melbourne Water Annual Report 2011–12 51 Corporate Financial sustainability

Powers and accountability Key features of the Board’s activities: People and Safety Committee Melbourne Water operates under the >>It has formal Board meetings 11 This committee assists the Board in Water Act 1989. times a year, undertakes site visits fulfilling its responsibilities relating to and participates in business strategy human resources issues, remuneration, Melbourne Water has two current by-laws, workshops with Melbourne Water’s and workplace health and safety. For Water Supply Protection No 1 (2006) and leadership team details of directors’ and executives’ Waterways, Land and Works Protection and remuneration, refer to pages 104-107 >>Monthly updates on Board activities are Management (2009). of the Financial Statements. made available to all employees The Minister for Water has delegated At 30 June 2012, the committee powers of management under the Water >>Regular strategy workshops are held with relevant stakeholder groups comprised Maria Wilton (Chairman), Act relating to licensed private water Terry Larkins, Dana Hlavacek and Eleanor diversions from waterways to Melbourne >>A structured induction program exists Underwood. A report about the activities Water, effective as of 1 July 1999. The for new Board and committee members of the committee in fulfilling its charter is Water Act and by-laws can be purchased prepared biennially. from the Information Victoria bookshop, >>Development opportunities are made 356 Collins Street, Melbourne (telephone available for Board members on an Environment and Public 1300 366 356). ongoing basis Health Committee >>Conflicts of interest are declared and a The Honourable Peter Walsh MLA, Minister director does not participate in decisions This committee assists the Board in fulfilling for Water, was the Minister responsible where such a conflict exists its responsibilities relating to environmental for Melbourne Water from 1 July 2011 sustainability and public health. to 30 June 2012. Melbourne Water >>Directors have the right to seek works with officers of the Department independent professional advice, At 30 June 2012, the committee comprised of Sustainability and Environment and at Melbourne Water’s expense, in Terry Larkins (Chairman), Eleanor Underwood the Department of Treasury and Finance. connection with their duties and and Rob Joy (independent member). A report Statutory and other reports are provided responsibilities about the activities of the committee in fulfilling its charter is prepared biennially. covering Melbourne Water’s performance >>Declarations of pecuniary interest against the objectives and performance by directors are made annually, Capital Projects and Asset indicators in the Corporate Plan. with procedures for updating that Performance Committee information between declarations Primary responsibilities This committee assists the Board in >>There is an annual review of Board fulfilling its governance responsibilities Melbourne Water’s Board has adopted performance. a charter that defines its role and relating to the planning and delivery of responsibilities within the legislative Committees capital projects. framework provided by the Water Act and The Board has four sub-committees, each At 30 June 2012, the committee other applicable legislation including the comprised Peter Vines (Chairman), Terry Public Administration Act 2004. The Board comprising at least three non-executive directors, who meet periodically to focus Larkins, Warren Hodgson and Eleanor makes plans to achieve specific objectives, Underwood. A report about the activities which include: on audit and corporate risk, people and safety, environment and public health, of the committee in fulfilling its charter >>Achievement of long-term outcomes and capital planning and delivery. The is prepared annually. based on a triple bottom line approach Managing Director attends meetings of committees by invitation. The Board >>Approval of budgets together with approves each committee charter. key performance indicators linked to objectives Audit and Corporate Risk Committee >>Approval of annual financial statements This committee assists the Board in and monitoring of performance against fulfilling its responsibilities relating to risk objectives and risks management, financial management and >>Monitoring of safety, health and operational control practices, and compliance environmental standards and with relevant laws and regulations. management systems. At 30 June 2012, the committee comprised The Board has ratified aCorporate Warren Hodgson (Chairman), Peter Governance Policy. Vines, Maria Wilton, Eleanor Underwood and Dana Hlavacek. A report about the activities of the committee in fulfilling its charter is prepared annually.

52 Melbourne Water Annual Report 2011–12 Melbourne Water’s vision of ‘Enhancing Life and Liveability’ is underpinned by providing efficient, affordable and valued services to all customers and stakeholders.

Organisational structure

Managing Director

Shaun Cox

General Manager, General Manager, General Manager, General Manager, General Manager, General Manager, General Manager, General Manager, Operations & Waterways Strategic Planning Communications Business Services People & Safety Capital Delivery Asset Planning Maintenance & Community Relations

Tony Antoniou Chris Chesterfield Ben Furmage Anne Randall Malcolm Haynes Leigh Keath David Morse Paul Pretto until 25 May 2012 until 23 March 2012

David Ryan Linda Herron from 25 June 2012 from 4 June 2012

Melbourne Water Annual Report 2011–12 53 Corporate Organisational capability

Strategic Goals

Our Aim We will do this by: >> Promoting diversity and flexibility to attract and Strengthen the capability >> Continuing to build a collaborative culture retain a motivated of the organisation to and skilled workforce deliver better customer >> Supporting and encouraging and community outcomes. our people to take >> Fostering a learning responsibility for health organisation that and safety collaborates in research, embraces emerging >> Developing a high- thinking and adapts to performing organisation new technology that values innovation, customer service and >> Using innovative commercial and technical technological solutions to expertise improve the effectiveness and efficiency of business processes.

54 Melbourne Water Annual Report 2011–12 Key Achievements

>> Implemented a new >> A biennial survey confirmed >> Introduced a program to Strategic Direction with progress is continuing help people transition to the aim of Enhancing to be made in building a retirement which is helping Life and Liveability in the constructive organisational the organisation retain Melbourne region culture valuable knowledge >> Continued to implement >> Launched a new graduate >> Engaged with multiple engagement programs to program designed to stakeholders on strategic support innovation and meet the future needs research projects for the strengthen organisational of the business Western Port area capability to deliver better customer service and community outcomes

Disappointments Challenges

>>Recorded 20 (employee and contractor) >>Improve health and safety performance lost time injuries (LTIs), including one by continuing the focus on: a zero harm fatality, failing to meet our zero target culture; being clear about roles and responsibilities; and agreement to upgrade the safety management system to AS4801, with certification by June 2013 >>Continuing to build a strong organisational culture with a focus on customer service, commercial acumen and innovative thinking >>Encourage and support our people to share research, knowledge and experience, and to embrace emerging thinking and adapt to new technology

Melbourne Water Annual Report 2011–12 55 Corporate Organisational capability

New Strategic Direction The great sadness and shock we While innovation survey results show experienced due to the death of one the Corporate Innovation KPI was met Melbourne Water launched a new of our colleagues has made us more for 2011–12, further opportunities were Strategic Direction in March 2012 after determined to make the safety of our highlighted in the detailed findings and extensive consultation with its customers, people our highest priority. the program review. Work has started on stakeholders and employees. a strategic improvement plan to target The organisation’s new vision, Enhancing Public safety specific innovation initiatives for all Life and Liveability, outlines Melbourne business groups. Water’s commitment to do its part to Melbourne Water aims to ensure all improve the quality of life within the its assets and activities are effectively Our workforce greater Melbourne region. Melbourne is managed to protect the community from continually rated by international agencies risk to their health and safety. To achieve Melbourne Water continues to attract as one of the most liveable cities in the this objective, Melbourne Water applies and retain a diverse, motivated and skilled world. Melbourne Water is dedicated to its Risk Management Framework to workforce, bringing required talent into the working with others to provide safe and its Asset Management and Safety organisation through a variety of measures. Management systems. secure water, sewage, waterways and These initiatives include engaging drainage services to uphold and enhance This year a serious public safety incident graduates, trainees and vacation students, Melbourne’s liveability. occurred when, without authority to do and facilitating a range of development so, a member of the public accessed one opportunities such as job rotations and Constructive culture of Melbourne Water’s assets. The person secondments between internal teams sustained serious injury which resulted in and external organisations. Our measures Melbourne Water introduced a culture them being hospitalised. encourage people to understand and change program in 2005, with regular engage with the organisation, develop their measuring of progress confirming the This incident has prompted a broad review full potential and support the delivery of organisational culture has noticeably into how Melbourne Water currently organisational outcomes. improved over the last seven years. The manages public safety risk associated with program helps guide our approach to its assets. Workforce distribution delivering business activities and underpins our behaviour when working constructively By the numbers with employees, partners and stakeholders. Innovation At 30 June 2012: To support our ability to supply efficient The culture program is integrated services in a complex environment, into Melbourne Water’s new Strategic >>Our total workforce was 834 Melbourne Water introduced a program (compared with 841 at 30 June 2011) Direction and key strategic documents of initiatives to boost innovation in late (e.g. Customer Strategy). It also informs 2010. This included an innovation toolkit >>The average age of Melbourne Water business activities, such as performance containing resources for creative thinking employees was 42 years (41.8 at and development planning, and employee and team problem-solving, and an online 30 June 2011) engagement strategies. software tool (the Idea Pool) to allow people >>The proportion of women in our Our progress was measured again in 2012 to share their ideas across the business. workforce was 32.9% (33.1% at 30 June 2011). and demonstrated we have maintained a A review of innovation initiatives constructive organisational culture since was undertaken this year and several The May 2012 Australian Bureau of 2009. All teams within Melbourne Water improvements were made to strengthen the Statistics Labour Force report shows received data on their own results and program. Innovation skill-building workshops female participation in the Electricity, are creating action plans to determine were conducted and a communications Gas, Water and Waste Services Industries opportunities for improvement. program introduced to share innovation at 25%. Melbourne Water continues to examples and success stories. provide a wide range of flexible working Safe and healthy workplace arrangements and a constructive culture The Innovation Assessment Group, which to attract women to its workforce. During Melbourne Water is aiming to ensure all its reviews ideas submitted to the Idea Pool, 2011–12, 44% of accepted job offers were activities are supported by a constructive has refined the assessment process with from women. culture and a commitment to zero harm the aim of improving the efficiency and in the workplace where the safety of transparency of decision-making. In 2011–12: people is paramount. An annual innovation survey was >>The average age of new starters We failed to achieve our goal of zero lost completed in May 2012, with results was 33 years (35.9 in 2010–11) time injuries (LTIs) for employees and showing an improvement in employee >>162 roles were filled, 70 by internal contractors on behalf of Melbourne Water assessment of how innovation candidates (151 roles filled in 2010–11) in 2011–12, with 20 LTIs (compared with contributed to Melbourne Water’s 15 last year). The most serious incident business performance. Our employees’ >>Turnover was 7.4% (8.1% in 2010–11), resulted in the fatality of a person at the rating of the tools, resources, collaborative which is within Melbourne Water’s Eastern Treatment Plant. office spaces and techniques available to accepted range and industry norms. generate, develop and progress ideas also improved over the year.

56 Melbourne Water Annual Report 2011–12 The organisation’s new vision, Enhancing Life and Liveability, outlines Melbourne Water’s commitment to do its part to improve the quality of life within the greater Melbourne region.

Melbourne Water workforce distribution Research and technology 2011–12 2010–11 2009–10 To ensure Melbourne Water continues to provide high quality services, research and Male Female Male Female Male Female development is undertaken to enhance Executives 42 10 48 9 42 8 knowledge for strategic purposes and improve efficiency through scientific Technical/professional 361 216 352 214 348 206 excellence, innovation and the adoption Operational 142 1 148 2 148 3 of new technology. Administration 12 48 15 53 18 55 Key initiatives in 2011–12 included: Total 559 275 563 278 556 272 >>Western Port Environment Scientific Total male Review: The review, ‘Understanding the 834 841 828 and female Western Port Environment: a summary of current knowledge and priorities for future research’, was publicly released in March Management training Information technology 2012. Since then, several of the high priority strategic research projects have A new manager training program was Melbourne Water’s production data facility commenced launched in 2011 as part of Melbourne moved to a purpose-built centre during Water’s ongoing commitment to developing the last year and is scalable to support the >>A mangrove planting project continued, a high-performing organisation. The Manager organisation’s projected needs for the next which was aimed at reducing severe Essentials Program is designed to enhance a 15 years. This move eliminated operational coastal erosion along the north-eastern manager’s ability in the areas of workplace costs associated with leasing data centre shores of Western Port Bay. More than relations, leadership and people skills. floor space. 20,000 mangrove seedlings have so far been planted and the project has been Sustainable design is a feature of the The first two modules of the Program developing and improving techniques new centre, which includes an innovative ‘Managing Employee Performance’ and used for mangrove revegetation at close cooling system that uses outside air to ‘Managing Diverse Teams’ were well to their most southerly global distribution received with more than 60 managers regulate the inside temperature. There participating. These modules will run again has already been a reduction of up to >>Investigation of the presence and in 2012, alongside modules on recruitment 40% in power consumption compared nature of the protozoan parasite and managing sick or injured employees. to the previous data facility. The centre Cryptosporidium in native and feral also delivers a doubling of data storage animals continued in our protected water Graduate development program capacity and real time synchronisation supply catchments. Results support of production and disaster recovery Melbourne Water’s unfiltered status This year saw the development and launch storage. The migration of IT systems and >>Melbourne Water is now involved of a new graduate program designed to infrastructure to the new centre was in the Australian Water Recycling meet Melbourne Water’s future business rigorously managed, without disruption Centre of Excellence, with a position needs. The program focuses on developing to Melbourne Water’s business or to on the Research Advisory Council and capabilities the organisation will need our customers. within a workforce planning program. representation on a major project To boost the organisation’s decision- to set national validation guidelines In addition to technical development, making capacity, an integrated for recycled water, aimed at ensuring graduates complete a year-long learning information program is underway science-based sensible guidance program to help improve capabilities in areas to improve efficient access to quality >>Work continued on a major research such as self-awareness, communication, information. This includes implementation building relationships and leadership. Action program aimed at better understanding of an information governance framework, the impact of toxicants including learning is integral to the program and 18 the creation of an enterprise information graduates took part this year. pesticides on aquatic ecosystems in model, and renewal of the enterprise waterways through the Victorian Centre Transition to retirement document management system. for Aquatic Pollution Identification and Management, which opened in 2010 A transition to retirement program was Several other projects were completed developed and launched in 2011–12. This to enhance organisational capability in >>Melbourne Water has been a successful program is designed to achieve outcomes for 2011–12. These included moving our partner in 15 Australian Research people who are close to retirement and for geospatial information from legacy Council grants, resulting in $6.8M retaining key knowledge within the business. proprietary files to an industry-leading of funding in addition to Melbourne platform – providing the capability for this Water’s contribution of $2M. This year, 57 employees received assistance data to be accessed from a greater range with transitioning to retirement, not only of devices and systems. We also upgraded from a financial point of view but also from our desktop environment to Windows a health and lifestyle perspective. In return, 7/Office 2010 and delivered enhanced employees are helping Melbourne Water productivity tools to our people. understand how it can keep older workers engaged and healthy and ensure their knowledge and skills are retained.

Melbourne Water Annual Report 2011–12 57