TABLE OF CONTENTS 2 About this report 3 About us 4 CEO’s review 5 Chairman’s outlook 6 Performance highlights 8 Review of operations 20 SunWater organisational structure 21 SunWater Board 24 SunWater executive management team 26 Directors’ report 28 Auditor’s independence declaration 29 Financial report 68 Corporate governance 72 Compliance in key areas 74 Summary of other SCI matters 76 Scheme statistics 79 SunWater dam statistics 80 Glossary 82 SunWater operations and infrastructure 2016 ABOUT THIS REPORT This Annual Report provides a review of SunWater’s financial and non-financial performance for the 12 months ended 30 June 2016. The report includes a summary of activities undertaken to meet key performance indicators as set out in SunWater’s Statement of Corporate Intent 2015–16 (SCI). The SCI represents our performance agreement with our shareholding Ministers and is summarised on pages 8 to 18, 74 and 75. This annual report aims to provide accurate information to meet the needs of SunWater stakeholders. An electronic version of this annual report is available on SunWater’s website: www.sunwater.com.au We invite your feedback on our report. Please contact our Corporate Relations and Strategy team by calling 07 3120 0000 or email [email protected]. 2 SUNWATER ANNUAL REPORT 2015-16 ABOUT US SunWater Limited owns, operates and facilitates the development of bulk water supply infrastructure, supporting more than 5000 customers in the agriculture, local government, mining, power generation and industrial sectors. The map at the back of this report illustrates The main operating companies within SunWater’s water supply network also SunWater’s extensive regional presence SunWater, and their activities, include: supports Queensland’s mining sector, in Queensland and highlights our existing • Eungella Water Pipeline P/L (EWP) supplying water to some of Queensland’s infrastructure network, including: owns and operates a 123 km-long largest mining operations. • 19 major dams; pipeline and associated pumping SunWater delivers water to a range of • 63 weirs; equipment that transports water other large commercial clients including • 82 major pumping stations; from Eungella Dam near Mackay power stations, water boards, regional • 3100 kilometres of pipelines and open to Moranbah, principally for use by councils and businesses. channels; and the mining industry. EWP also owns and operates 116 km of Eastern and SHAREHOLDERS • 740 km of drains. Southern Spur pipelines that take SunWater Limited (SunWater) is a VISION AND VALUES water from the Eungella Water Pipeline Queensland Government Owned and the Burdekin–Moranbah Pipeline Corporation, established under the OUR VISION: to be Australia’s most to coal mines and related users in the Government Owned Corporations Act respected and valued bulk water supplier. northern Bowen Basin. 1993 (Qld) and a registered water service In the short term, our ambition is to • North West Queensland Water provider under the Water Act 2000. continue to deliver safe, efficient and Pipeline P/L (NWQWP) owns and Our shareholding Ministers, as at reliable water services to our customers. operates a 113 km-long pipeline and 30 June 2016, are: In the longer term, we strive to be associated pumping equipment that • The Honourable Curtis Pitt MP, recognised as a national water provider, transports water from Lake Julius Treasurer, Minister for Aboriginal and offering innovative ways of securing water near Mount Isa to the Ernest Henry Torres Strait Island Partnerships and for the future and tackling the critical Mine and a number of rural users. Minister for Sport. challenges of regional water supply. NWQWP also owns and operates the Cloncurry Pipeline, a 38 km extension • The Honourable Mark Bailey MP, Our business success is ultimately based pipeline from the NWQWP to the Minister for Main Roads, Road Safety on our workforce. We strive to build township of Cloncurry for domestic and Ports and Minister for Energy, a culture of integrity and excellence and industrial supply. Biofuels and Water Supply. and our values underpin our thinking, decision making and daily interactions. • Burnett Water P/L (BW) owns and operates Paradise Dam and Kirar SunWater’s values are: Weir in the Burnett River catchment • delivering outstanding service; and 147,261 megalitres (ML) of water • working safely; allocations which are being offered for • taking responsibility; sale/lease. • working together; CUSTOMERS • being open to change; and • respecting others. SunWater’s water supply network delivers water security to some of Australia’s KEY BUSINESS biggest agricultural and industrial producers. SunWater’s core business includes: Queensland has the largest area of agricultural land of any Australian state • bulk water storage and distribution; and is the nation’s largest producer of • water infrastructure development; sugar cane, tropical fruits, tomatoes and • water facilities management; capsicums. The State is also a major • customer water account management producer of cotton, beans, lettuce, and billing; pumpkins, mushrooms and herbs. • flood hydrology, hydraulics and flood Agriculture accounts for approximately management; and 67 per cent of total water consumption • specialist consultancy services in Queensland and irrigated agriculture including design and design review accounts for around 36 per cent of the services. State’s total agricultural production. SUNWATER ANNUAL REPORT 2015-16 3 CEO’S REVIEW “Diversity of thought and challenging the status quo is fundamental to making water work for our customers” SunWater has continued to deliver on our goals of service reliability, will continue to shine a light on every customer touch point and ask safety and efficiency to achieve a solid result for our customers and ourselves how we can do it better. shareholders in FY16. EMPLOYEE PERFORMANCE Operating under a new management structure, we have successfully One of our greatest achievements in FY16 has been reducing our total delivered on our strategy of financial performance, quality stakeholder recordable injury frequency rate from 4.18 down to 1.37. This feat is a consultation and increasing the skill and motivation of our people. culmination of many years of continuous safety improvements and the Our continued improvement in reliable and efficient asset management unwavering advocacy of our past and present leadership. planning was reaffirmed with our asset refurbishment and enhancement Now that the bar has been raised, our challenge will be to uphold this program achieving more than $800,000 in operational efficiencies. exceptional standard in workplace safety for all staff and contractors. DELIVERING OUR FY16 STRATEGY WORKPLACE DIVERSITY Diversity of thought and challenging the status quo is fundamental to STRENGTHENING OUR INFRASTRUCTURE NETWORK making water work for our customers. For the first time in our history we Maintaining the integrity of our infrastructure network was the have achieved equal gender representation at our executive level, with cornerstone of capital investment in FY16. More than $12M was 60 per cent female representation on our Board of Directors and 50 per invested in the Dam Safety Improvement Program, which included cent in the executive leadership team. Overall, female representation significant progress in the refurbishment of Paradise and Fairbairn dam has increased from 22 per cent to 25 per cent, bringing new energy spillways. Investing in ongoing assessment and improvement of our $13 and perspective to all aspects of our operations. Furthermore, our billion bulk water and pipeline assets is essential to delivering a safe and commitment to gender pay equity was reaffirmed with a Board review of reliable service, and will remain a priority in the coming years. our remuneration system reporting gender pay equity at all levels. COMMUNITY EDUCATION AND PREPAREDNESS OUR FOCUS FOR FY17 We have made significant progress on our commitment to deliver key Operational excellence and sustainability are two strategic objectives for recommendations from the Inspector General Emergency Management SunWater in FY17 and beyond. review. An Emergency Management Response Program was developed to improve our flood prediction and forecast modelling capabilities. Listening to our customers’ needs and responding with more flexible Although in its infancy, the Program is achieving world-class advances in management will be our highest priority. To do so, we will need to community flood preparedness. In November, we launched the SunWater be agile, embrace change and be able to work in the ever changing App for smartphones, which is providing real-time operational and economic and climatic conditions that occur. We also need to ensure emergency updates to communities living near SunWater dams, weirs and we focus our operations to continue to be safe and productive for our waterways. people, our shareholders and our customers. QUALITY CUSTOMER SERVICE I would like to thank our executive and senior leadership teams and all of our people at SunWater for their unwavering loyalty, hard work and Our focus throughout the year has been to ensure we provide better commitment to safety. I am confident that we can accept the challenges information to customers to help them make informed business and opportunities for the year ahead. decisions. Transparency of our works expenditure program has been significantly improved, and we have developed tools to better support irrigation customers to plan and manage their water