state of the water sector report 2014 presentation

State of the Water Sector

2014

2 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu

Demographics

The State of the Water Sector Survey 2014 was open to all water professionals from 14 April 2014 to

19 May 2014. The survey was facilitated using the Deloitte online survey system, Qualtrics, and was

completed by 1,162 respondents.


The need to improve operational efficiency has been

articulated as the top issue facing the water sector, reflecting

the continued concern about the need to control costs and

demonstrate value for money within the sector.

Improving operational efficiency was identified as one of the

three most important issues by 46% of respondents, an

increase from 35% that identified it as a key issue in 2013.

Operational Efficiency


Water professionals were also focused on the need to place attention

on maintaining and augmenting infrastructure, which was ranked as

one of the top three issues by 45% of respondents. This was the top

issue in 2013 and 2012.

Maintaining and Augmenting Infrastructure


Ensuring secure water supplies was ranked third by 39% of

respondents as a current issue, and was identified as the top

issue in five years time by 41% of respondents.

Ensuring water supplies are secure


• Water professionals identified the area of greatest concern in five years time as ensuring we

have a sustainable water supply.

• Although the sector believed the security of supply was being managed well, this shows the

acknowledgment of the challenges of increasing competing demands, climate change and

population growth.

Emerging Issues


Water Supply Options

• 84% of respondents at least ‘somewhat agreed’ that dams are an effective method of managing water

security within their region.

• 55% felt that there is scope for more dams to be built.

• 87% think there is capacity to use recycled water for drinking.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Desalination Water

Recycled Water

Urban Stormwater

Can be treated and managed to a level that is sufficient for safe and reliable potable supply?


Climate Change

• Climate change was identified as a significant or moderate risk to the sustainable management of water

by 86% of respondents.

• To address climate change the majority of respondents believed the water sector should;

- Focus on diversifying sources of water supply (67%)

- Ensure that systems can withstand extreme weather and events such as fire or flood (63%)

- Ensure asset management strategies account for longer term changes (57%).

Emerging Issues


• In 2014 respondents were asked to nominate their top three priorities for reform in the water sector.

Water Reform, Economic Regulation and Water Pricing

0%

10%

20%

30%

40%

50%

60%

% Respondents


• Water pricing remains a ‘hot topic’ in the industry. Although price rises in 2013 in most jurisdictions were

less than in previous years (Melbourne and Perth being exceptions) the industry is clearly concerned

about the public view’s on household water bills.

• In the 2014 survey, responding to community concern about rising prices was the fourth most frequently

identified issue, with 37% of respondents nominating it. This is a significant increase over the 25% of

respondents who identified it as an issue in 2013.

Water Pricing


• Perceptions of whether bills are too high vary across states and aren’t entirely correlated with bills.

Pricing and pricing perceptions

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

South EastWater

QueenslandUrban Utilities

Sydney Water ACTEW WaterCorporation

SA Water

Typical bill ($)

Concern that prices a little or much too high(%)


• Confidence in economic regulation is improving

• But regulatory regimes are being weakened or under review in some states – including Victoria and

Queensland

Economic regulation

Year Regulation is quite or very effective

2010 41%

2012 44%

2013 47%

2014 52%


• A September 2014 report from the NSW Chief Scientist and Engineer

stated that Australia is in a good position to rise to the challenge of

managing the various water issues associated with CSG production

• It suggested that risks associated with CSG exploration can be

managed but that in and near drinking water catchments, risk

management needs to be of a high order

• The water industry is not yet convinced - 87% of respondents in the

ACT, Qld and NSW said CSG poses a risk to water resources, with

74% considering this risk significant or moderate

Coal seam gas


• 83% of NSW Respondents either agreed or strongly agreed that dams are an effective way to manage

water security. Well above the national average of 68%.

• NSW respondents also deemed economic regulation of water in their state as effective, with 61%

indicating a level of quite or very effective regulation. Notably higher than the national average of 52%.

State Based Notes - NSW

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Dam Effectiveness

Effective Economic Regulation

Australia

NSW


• A noteworthy shift in Queenslanders identification of big issues in the water sector included a 16%

increase in identifying the importance of ensuring water supplies are secure and a 13% increase in

responding to community concern over rising prices.

State Based Notes - QLD

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Responding to community concern overrising prices

Ensuring water supplies are secure

2014

2013


• South Australian’s showed strong support when asked how well the sector is responding to climate

change impacts. 74% indicated climate change impacts are being well responded to compared to the

national average of 51%.

• Dissatisfaction with economic regulation remains high with South Australian respondents. With 39%

indicating minimal if any satisfaction with the effectiveness of economic regulation of water.

State Based Notes – SA


• Victorian’s believe repairing irrigation infrastructure should be the top priority for meeting the water

supply needs of rural and agricultural needs (57%), above the response rates of the rest of the country

(≥9%). This area is being addressed through the Northern Victorian Irrigation Renewals Project.

• Despite significant price rises in 2013-14 in Melbourne, the proportion of Victorian’s who considered

water prices to be much or a little too high fell from 27% in 2013 to 20%.

State Based Notes - VIC

0%

10%

20%

30%

40%

50%

60%

NSW VIC QLD SA WA ACT NT TAS

Repair irrigation infrastructure


• In Western Australia, 74% of respondents considered the state of the water sector across Australia to be

quite or very sound, an increase of 11% from 2013.

• To address the impacts of climate change, most Western Australians (77%) indicated there should be

further diversification of water supply sources, a large increase of 20% from 2013.

• Only 11% of respondents consider urban water prices a little or much too high, a drop from 20% in 2013

and considerably lower than the national average of 24%.

State Based Notes - WA

0% 10% 20% 30% 40%

NSW

VIC

QLD

SA

WA

ACT

NT

TASA little too high

Much too high

In Summary

24

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state of the water sector report 2014 presentation

Environment

water sector survey

water reform

water security

water pricing0

sustainable water supply

various water issues

household water bills

drinking water catchm