SYDNEY WATER ANNUAL REPORT 2002 ‘Water is life, and it sustains our lives. It is precious, because it is finite.’* The finite supply of water is central to the long-term development of Sydney and its surrounding areas of the Blue Mountains and the Illawarra. It is an issue for us all to think about. Over the next 20 years it is likely that Sydney’s population will increase by around 700,000. Where these people live and the water services they require are critical issues for Sydney’s sustainable water supply. Sydney Water customers have been supportive of the need to conserve water. As our population grows, careful water use will become even more important. How far will customers go to willingly conserve their water? How much water should be retained for supplementing river flows? Our understanding of this issue is growing and it is likely we will need to provide more water for our rivers in the future. * Chairman, Sydney Water in a speech to the Committee for Economic Development of Australia (CEDA), July 2002. The impact of global warming is beginning to become evident, with indications that there is the potential for climate changes to further limit the amount of available water. Wastewater is the water we return to the environment after treatment at a sewage treatment plant. The quality of treated wastewater affects the quality of our rivers, harbours and beaches. Pollution of the environment is unacceptable. Treated adequately, wastewater or even stormwater could be seen as an alternative supply for industry, our rivers and even some non-drinking household uses like watering the garden. The cost of treatment and customers’ willingness to pay for this are also key issues determining when and where recycling can be applied. Some answers will lie in new technologies for sewage treatment and water collection and treatment. Are customers ready to adopt new technologies? Will communities accept that the same technologies won’t work for everyone? At the heart of these issues is the fact that public health should never be compromised. Whether it is safe drinking water or a safe living environment, these are non-negotiable issues in balancing our future water needs. OCTOBER 2002 CONTENTS 2 LETTER TO THE SHAREHOLDING MINISTERS The Hon Michael Egan MLC 3 CORPORATE PROFILE Treasurer, Minister for State Development and Vice President of the Executive Council 3 VISION, VALUES, OBJECTIVES Level 33 4 AREA OF OPERATIONS MAP Governor Macquarie Tower 5 ABOUT SYDNEY WATER 1 Farrer Place – WATER –SEWERAGE SYDNEY NSW 2000 – DRAINAGE The Hon JJ Della Bosca MLC 6 FROM THE CHAIRMAN Special Minister of State and Assistant Treasurer 7 FINANCIAL HIGHLIGHTS Level 33 8 MANAGING DIRECTOR’S REPORT – Governor Macquarie Tower SUMMARY REVIEW OF OPERATIONS – LEARN, GROW AND BE A 1 Farrer Place SUCCESSFUL BUSINESS SYDNEY NSW 2000 – IMPROVE CUSTOMER SERVICES – DELIVER RELIABLE, QUALITY PRODUCTS AND SERVICES – INNOVATION Dear Treasurer and Minister 16 CORPORATE PLAN KEY PERFORMANCE INDICATORS REPORT OF PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2002 18 CASE STUDIES PROTECT PUBLIC HEALTH – BUNDEENA–MAIANBAR SEWERAGE SCHEME We are pleased to submit the Annual Report of Sydney Water – DRINKING WATER QUALITY Corporation, covering the year ended 30 June 2002, for PROTECT THE ENVIRONMENT presentation to Parliament. – BLUE MOUNTAINS STREAMS – BOTANY WETLANDS MANAGEMENT The Annual Report was prepared in accordance with Section 24A BE A SUCCESSFUL BUSINESS of the State Owned Corporations Act 1989 and the Annual – LEAKAGE REDUCTION Reports (Statutory Bodies) Act 1984. – PROCUREMENT REFORM 24 OPERATING LICENCE PERFORMANCE The Financial Statements for 2001–02, which form part of the STANDARDS Annual Report, have been submitted to and certified by the 26 PRINCIPAL STATISTICS Auditor-General of New South Wales. 27 MAJOR WORKS IN PROGRESS 28 RESEARCH AND DEVELOPMENT Yours sincerely – CONTINUING MAJOR RESEARCH AND DEVELOPMENT ACTIVITIES – COMPLETED MAJOR RESEARCH AND DEVELOPMENT ACTIVITIES 30 DIRECTORS’ REPORT – CORPORATE GOVERNANCE – BOARD COMMITTEES – ATTENDANCE AT BOARD AND LETTER TO THE TO SHAREHOLDINGLETTER MINISTERS COMMITTEE MEETINGS 2001–02 32 BOARD MEMBERS Gabrielle Kibble 34 MANAGEMENT BIOGRAPHIES CHAIRMAN OF THE BOARD – ORGANISATIONAL CHART 36 FINANCIAL PERFORMANCE REVIEW 39 SYDNEY WATER FINANCIAL STATEMENTS 85 SPECIAL ENVIRONMENTAL LEVY UNIT TRUST (SEL) ANNUAL REPORT 87 SEL UNIT TRUST FINANCIAL STATEMENTS 97 AUSTRALIAN WATER TECHNOLOGIES PTY LTD FINANCIAL STATEMENTS 127 AWT INTERNATIONAL PTY LTD Alex Walker FINANCIAL STATEMENTS MANAGING DIRECTOR 147 STATUTORY AND STATISTICAL INFORMATION 160 INDEX – SHORTENED FORMS IBC DIRECTORY COVER The view north from the Botany Wetlands towards Sydney City clearly illustrates the diverse nature of Sydney’s environment. The Wetlands are an integral part of the area’s natural eco-system, the importance of which is supported by Sydney Water’s ongoing management program. See case study on page 21. 2 SYDNEY WATER ANNUAL REPORT 2002 ‘Access to adequate supplies of safe, good quality water is essential to the E PROFILE health and wellbeing of more than four million people who live in and around Sydney.’* CORPORAT Sydney Water is the largest water services provider in Australia, providing drinking water, wastewater and some stormwater services to people in Sydney, the Blue Mountains and the Illawarra. Sydney Water aims to excel in providing quality products and services, while being ecologically responsible and a successful business. Sydney Water’s total revenue is in excess of $1.5 billion (including capital contributions) annually. Sydney Water achieves this by utilising assets in excess of $14 billion and employing the dedication and talent of 3,556 employees. Sydney Water is a statutory State Owned Corporation, fully owned by the people of New South Wales. Sydney Water operates under the Sydney Water Act 1994 and the State Owned Corporations Act 1989. * Chairman, Sydney Water in a speech to CEDA, July 2002. Vision Values Objectives To be a water services provider that Sydney Water’s values underpin the Sydney Water has three equal, achieves world class performance in organisation and are core to principal objectives. everything it does, enjoys the trust achieving its vision. PROTECT PUBLIC HEALTH and support of the communities it RESPECT PEOPLE serves and whose people take pride PROTECT THE ENVIRONMENT in their contribution to its success. DELIVER QUALITY BE A SUCCESSFUL BUSINESS CARE FOR THE ENVIRONMENT BE OPEN AND HONEST BE WILLING TO LEARN, SHARE AND CHANGE 3 SYDNEY WATER ANNUAL REPORT 2002 M k a e e c r D C i o m n e ald ll o W R iv e r C o lo Wisemans Ferry Gosford River AREA OF OPERATIONS Broken Bay Palm Beach er ry iv Lithgow bu R • More than es k 1,600 million litres w r a G ve H of water are delivered ro Ri se Hornsby by Sydney Water Mt. Victoria Dee Why each day to homes and businesses. C o Chatswood x Penrith Blacktown s Port Jackson r Katoomba e v Parramatta Sydney • More than i R 40,000 kilometres Fairfield R Bankstown of water and sewer i v e Liverpool mains are maintained r n Rockdale a e by Sydney Water. p r Botany Bay e e v N i r R e iv Sutherland R K Campbelltown ra o • More than o w r n e s o m e r 1,300 million litres iv g o u R r W n o e of wastewater g G Lake Burragorang are collected and Helensburgh treated each day by Stanwell Park Sydney Water. Cat ara R ct Co ive rd r ea r u e x v R • More than i i R er v v e i r 28 million litres R W ver ollo illy i of wastewater are nd R n recycled each day Wollongong vo n A from Sydney Water’s a Coniston e p sewage treatment e N plants. Mittagong W Lake Illawarra ingecarribee River Shellharbour Kiama er o Riv aro ng Gerroa Ka Lake Yarrunga Sh oa en lhav Riv er Area of Operations Area of Operations 4 SYDNEY WATER ANNUAL REPORT 2002 Sydney Water supplies water to an estimated population of 4,145,429 people in 1,610,098 properties within its area of operations. WATER Sydney Water utilises 20,587 kilometres The greater Sydney region is served by of water mains, 259 service reservoirs, 27 sewerage systems, 10 draining to coastal 146 water pumping stations and 10 water sewage treatment plants and 17 draining filtration plants to provide the services. to inland sewage treatment plants. ABOUT SYDNEY WATER SYDNEY ABOUT Sydney Water buys water for treatment The main coastal systems in the Sydney basin from the Sydney Catchment Authority (SCA). are Bondi, Northern Suburbs, Southern and The SCA was established by the Sydney Water Western Suburbs, Cronulla and Warriewood. Catchment Management Act 1998 and came The inland systems are Blackheath, West into full operation on 2 July 1999. All major Camden, Castle Hill, Glenbrook, Hornsby water supply dams previously owned by Sydney Heights, West Hornsby, Mt Victoria, Penrith, Water (including Sydney’s main source of water, Picton, Quakers Hill, Richmond, North Richmond, Warragamba Dam) were transferred to the SCA. Riverstone, Rouse Hill, St Marys, Warragamba The SCA draws its bulk water supply for Sydney and Winmalee. Fairfield, Glenfield and Liverpool Water’s area from catchments on four main river sewage treatment plants drain to the Southern systems – the Upper Nepean, the Warragamba, and Western Suburbs system and the coastal the Shoalhaven and the Woronora – with minor sewage treatment plant at Malabar. supplies drawn from the Hawkesbury River, The Illawarra is served by five systems draining tributaries of the Grose River and the Fish River to coastal sewage treatment plants at Bellambi, Water Supply Scheme. Bombo, Port Kembla, Shellharbour and Water is drawn from storages at nine major Wollongong.