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Independent Pricing and Regulatory Tribunal

Sydney Water Corporation

Operational Audit 2008/09

Report to the Minister

Water — Compliance Report

November 2009

Sydney Water Corporation Operational Audit 2008/09 Report to the Minister

Water — Compliance Report November 2009

ii IPART Sydney Water Corporation Operational Audit 2008/09

© Independent Pricing and Regulatory Tribunal of New South Wales 2009

This work is copyright. The Copyright Act 1968 permits fair dealing for study, research, news reporting, criticism and review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgement of the source is included.

ISBN 978-1-921628-16-0

CP49

The Tribunal members for this review are:

Mr James Cox, Acting Chairman and Chief Executive Officer

Ms Sibylle Krieger, Part Time Member

Independent Pricing and Regulatory Tribunal of New South Wales PO Box Q290, QVB Post Office NSW 1230 Level 8, 1 Market Street, Sydney NSW 2000

T (02) 9290 8400 F (02) 9290 2061

www.ipart.nsw.gov.au

Sydney Water Corporation Operational Audit 2008/09 IPART iii

Contents

Sydney Water Corporation Operational Audit 2008/09 IPART v

Contents

1 Introduction and Overview 1 1.1 Overview of Audit Findings 2 1.2 IPART’s recommendations 2 1.3 Structure of report 3

2 Audit Scope and Process 4 2.1 Scope 4 2.2 Process 4

3 Water Quality 6 3.1 Audit findings 6 3.2 Audit Recommendations 7 3.3 IPART’s comments 7

4 Infrastructure Performance 8 4.1 Audit Findings 8 4.2 IPART’s Recommendation 10 4.3 IPART’s comments 10

5 Customer and Consumer Rights 11 5.1 Audit Findings 11 5.2 IPART’s Recommendation 11 5.3 IPART’s comments 11

6 Complaint and Dispute Handling 12 6.1 Audit Findings 12 6.2 IPART’s Recommendation 12 6.3 IPART’s comments 12

7 Environment – Indicators and Management 13 7.1 Audit Findings 13 7.2 IPART’s Recommendation 13 7.3 IPART’s comments 14

8 Water Conservation and Demand Management 15 8.1 Audit Findings 15 8.2 IPART Recommendations 16 8.3 IPART’s comments 16

Contents

vi IPART Sydney Water Corporation Operational Audit 2008/09

9 Liability Issues 17 9.1 Audit Findings 17 9.2 IPART’s Recommendation 17 9.3 IPART’s comments 17

10 Historical Compliance 18

Appendices 21 A Audit Scope for Sydney Water Corporation’s 2008/09 Operational Audit B GHD Final Report – 2009 Operational Audit of Sydney Water Corporation C Sydney Water 2008/09 Statement of Compliance

1 Introduction and Overview

Sydney Water Corporation Operational Audit 2008/09 IPART 1


The Independent Pricing and Regulatory Tribunal of New South Wales (IPART) has completed the audit of Sydney Water Corporation’s (Sydney Water) compliance with the requirements of its 2005-2010 Operating Licence (the licence). This audit covers the period from 1 July 2008 to 30 June 2009. IPART engaged GHD Pty Ltd (GHD) as a consultant to assist with the 2008/09 Operational Audit (the audit) of Sydney Water.

The purpose of this report is to inform the Minister for Water of IPART’s findings in relation to Sydney Water’s performance against its licence obligations for the audit period and set out IPART’s recommendations in response to these findings.

Sydney Water is a State Owned Corporation, wholly owned by the NSW Government. Its primary role is to manage potable water supply and sewage treatment to protect public health and the environment for the benefit of Sydney and surrounding urban areas. These roles and responsibilities are derived from the Sydney Water Act 1994 (the Act) and the Operating Licence issued to Sydney Water pursuant to Part 5 of the Act.

Section 33 of the Act requires the Minister for Water Utilities to table the IPART audit report in both Houses of Parliament within one month of receiving the report.

The licence provides for a risk-based auditing regime. The risk-based auditing process provides that clauses assessed as having high risks associated with non-compliance are usually included in the audit scope. High risk clauses include those relating to water quality, infrastructure, customers and the environment. GHD assessed Sydney Water’s compliance with high risk areas of the licence and submitted an audit report to IPART.

Other clauses assessed as low risk are audited less frequently. However, all requirements of the licence are audited at least once during the term of the licence. In 2008/09, Sydney Water provided IPART with a Statement of Compliance, signed by the Chief Executive and Chairman of the Board, relating to the unaudited, low risk clauses of the licence.


2 IPART Sydney Water Corporation Operational Audit 2008/09

1.1 Overview of Audit Findings

IPART found that Sydney Water had managed its resources to achieve overall Full Compliance with the auditable requirements in the licence. Specifically, IPART found that Sydney Water:

Continued to supply treated drinking water of an excellent quality.

Achieved Full Compliance with requirements related to the Australian Drinking Water Guidelines.

Implemented a Recycled Water Quality Management Plan based on the new Australian Guidelines for Water Recycling.

Achieved Full Compliance with infrastructure performance requirements including water continuity, water pressure and sewer overflows and response times for leaks and breaks.

Achieved Full Compliance with the Demand Management requirements, including water conservation, leakage management and water recycling.

Sydney Water’s compliance is illustrated in the following table.

Table 1.1 Summary of Sydney Water’s 2008/09 compliance

Licence Clause Compliance Grade Awarded

No of Auditable

Clauses Full High Moderate

Part 3 – Water quality 23 23

Part 4 – Infrastructure Performance 22 22

Part 5 – Customer and Consumer Rights 3 3

Part 6 – Complaint and Dispute Handling 4 4

Part 7 – Environment – Indicators and Management

17 17

Part 9 – Water Conservation and Demand Management

19 19

Part 11 – Liability Issues 1 1

Total 89 89

Sydney Water’s compliance with each section of the licence is discussed further in subsequent sections of this report.

1.2 IPART’s recommendations

IPART believes that Sydney Water should be commended for the standard of compliance that it achieved in 2008/09, as illustrated in the table above.



The introduction of BASIX and changing community perceptions about water use mean that demand for water in new development areas no longer follows historical patterns. Accordingly, Sydney Water has developed a new methodology to assess water demand in these new development areas. IPART’s consultant has examined the process employed by Sydney Water and believes that the methodology is appropriate. However, the consultant recommended that IPART should monitor the on-going validation of this method over several years.

Accordingly, IPART recommends that Sydney Water should:

Provide IPART with a report by 1 September 2010, which provides an up-date on the methodology, validation, sensitivity and risk analyses undertaken for design of water infrastructure and how this may impact on future licence compliance and expenditure. We intend to review this work as part of the 2009/10 audit of Sydney Water’s Operating Licence and any future audits, as necessary.

Report to IPART prior to 30 March 2010 on its assessment of each of the other recommendations and opportunities for improvement, identified by the auditor in its audit report, and what action, if any, should be taken to address them.

We have discussed these recommendations with officers of Sydney Water and they have advised us that they accept these recommendations. We do not recommend that the Minister should impose any additional requirements upon Sydney Water concerning the licence.

1.3 Structure of report

This report presents and discusses the findings and recommendations of the 2008/09 audit of Sydney Water.

Chapter 2 explains the basis for and scope of the audit review, and the process followed in undertaking it.

Chapters 3 to 9 present a summary of the audit findings and recommendations, where applicable, for each part of the licence. In addition, we have provided a commentary and an overall assessment of Sydney Water’s performance for the audit period.

Finally, in Chapter 10, we have discussed the actions that we have taken in response to the findings of the 2007/08 audit.

Appendices set out which Licence clauses were independently audited (Appendix A), provides a copy of the consultant’s report (Appendix B) and a copy of Sydney Water’s 2008/09 Statement of Compliance (Appendix C).

2 Audit Scope and Process



Part 12 of the Operating Licence stipulates that IPART is to undertake an audit of Sydney Water’s performance against the requirements of the licence each year and report its findings to the Minister.

2.1 Scope

The licence provides for a risk-based approach to the assessment of compliance with Licence requirements. The 2008/09 audit is the fourth audit of the 2005-2010 licence.

The adoption of the risk-based approach improves the effectiveness and efficiency of the auditing process without increasing the risks to the community. It allows audit resources to be targeted to areas of higher risk while reducing the overall burden of compliance. Appendix A sets out the scope of the 2007/08 audit and identifies which licence requirements are subject to a comprehensive audit and which are covered by a Statement of Compliance, signed by the Chief Executive and the Chairman of the Board.

2.2 Process

We engaged GHD to assess Sydney Water’s performance against licence requirements that were identified as being higher risk. As part of the audit process, we advertised for public submissions in the Sydney Morning Herald and the Daily Telegraph on 16 September 2009.

The consultant adopted a methodology consistent with ISO 14011 “Guidelines for Environmental Auditing” for this audit. These guidelines set out a systematic approach to defining the requirements of the audit, which ensure that it is conducted in accordance with an established and recognised audit protocol.

We held an inception meeting with GHD and Sydney Water representatives on 14 September 2009. This meeting set out mutual understanding and expectations of the requirements of the audit and protocols for the conduct of the audit. All parties generally adhered to the agreed protocols throughout the audit. We attended most meetings between the consultant and Sydney Water.



We provided Sydney Water with drafts of the audit report, and gave it an opportunity to provide its comments on these documents. These comments were considered before the audit report was finalised. The audit report is attached as Appendix B.

Sydney Water’s compliance with the relevant requirements of the Operating Licence was assessed according the following schedule:

Compliance Grade Description detail

Full Compliance All requirements of the condition have been met.

High Compliance Most requirements of the condition have been met with some minor technical failures or breaches.

Moderate Compliance The major requirements of the condition have been met.

Low Compliance Key requirements of the condition have not been met but minor achievements regarding compliance was not available to the auditor.

Non Compliance The requirements of the condition have not been met.

Insufficient Information Relevant, suitable or adequate information to make an objective determination regarding compliance was not available to the auditor.

No requirement The requirement to comply with this condition does not occur within the audit period or there is no requirement for the utility to meet.

3 Water Quality


3 Water Quality

Part 3 of the licence deals with water quality. It includes requirements relating to planning, monitoring, reporting and incident management. Part 3 also includes requirements relating to the supply of other grades of water.

Under the risk-based auditing framework, IPART considers this section of the licence to be one that poses a higher risk in terms of the likelihood and consequence of non-compliance.

3.1 Audit findings

Drinking Water Quality – Standards

Sydney Water obtained Full Compliance with respect to the quality of treated drinking water to supplied customers. The water quality supplied is generally of an excellent standard and complies with the health related requirements of the current Australian Drinking Water Guidelines (2004) and the Fluoridation Code.

Drinking Water Quality – Reporting

Sydney Water obtained Full Compliance with the requirement to provide quarterly reports that include water quality monitoring results to NSW Health and publish these reports on its website.

Drinking Water – Planning

Sydney Water achieved Full Compliance with the requirement to prepare an annual report on the implementation of the 5-year Drinking Water Quality Management Plan.

Other Grades of Water

Sydney Water obtained Full Compliance with the audited requirements for “supply of other grades of water” for the Rouse Hill recycled water scheme, the Wollongong Recycled Water Scheme and other schemes.

3 Water Quality


3.2 Audit Recommendations

We have made no recommendation in relation to this section of the Licence.

3.3 IPART’s comments

Sydney Water continued to supply consumers with water of excellent quality during 2008/09. It has complied with the health and aesthetic related guideline values of the current Australian Drinking Water Guidelines (ADWG 2004) as specified by NSW Health. Sydney Water also maintains a comprehensive five-year Drinking Water Quality Management Plan, which adopts the approach and framework for management of drinking water quality set out in the ADWG 2004.

In relation to other grades of water, the auditor notes that Sydney Water is in a period of transition with the active expansion of the number and quantities of other grades of water supplied. Sydney Water is carrying out considerable work to meet the requirements of the new Australian Guidelines for Recycled Water (AGRW); Managing Health and Environmental Risks (Phase 1) 2006. While this work is not yet complete and has not been subject to detailed review in this audit, we expect that this work will lead to a higher level of compliance in the coming years. We note that Sydney Water is yet to reach agreement with NSW Health on the requirements for compliance in relation to recycled water.

4 Infrastructure Performance



Part 4 of the licence requires Sydney Water to meet all system performance standards (water continuity, water pressure and sewage overflows), the response time for water main breaks, and requirements in relation to the “Priority Sewerage Program”.

Under the risk-based auditing framework, IPART considers this section of the licence to be one that poses a higher risk in terms of the likelihood and consequence of non-compliance.

4.1 Audit Findings

Sydney Water achieved Full compliance for meeting the Water Pressure Standard, Water Continuity Standard and Sewage Overflow Standard respectively.

Water Pressure Standard

Compared to last year, water pressure performance deteriorated. 1,093 properties experienced a pressure less than 15 metres head in 2008/09 compared to 345 properties in 2007/08. The auditor found that one system failure accounted for 950 of this total. The standard that no more than 15,000 properties experience low pressure was still comfortably achieved.

Water Continuity Standard

10,923 properties were affected by planned interruptions in 2008/09. This compares well with 16,576 properties in 2007/08 and easily complied with the standard that no more than 32,000 properties experience a planned interruption.

The number of properties that experienced an unplanned interruption also fell from 31,982 in 2007/08 to 25,656 in 2008/09. This result represents a reversal of the previous upward trend.

Sewage Overflows on Private Property Standard

There was also a significant reduction in properties affected by dry weather sewer overflows. 16,028 properties were affected in 2008/09 compared with 18,148 properties in 2007/08. The standard requires that no more than 25,000 properties are affected by dry weather sewer overflows.



This improvement confirms that Sydney Water is progressing well with its Sewer Choke Management Strategy and indicates that further reduction in affected properties is likely in future years. IPART supports this initiative.

Service quality and system performance indicators

Sydney Water was awarded Full Compliance for requirements related to the provision of service quality and system performance indicators.

Asset Management Obligation

This section of the audit reviewed Sydney Water’s asset management planning and associated processes. Sydney Water’s performance in these areas was assessed as Full Compliance.

IPART’s consultant noted that Sydney Water had employed a new process to determine peak demand design loads for water supply to new areas. The consultant was satisfied that Sydney Water’s approach is reasonable but is unproven. Validation of the process will only be possible after data from a number of years has been examined. We recommend that this data be monitored in future audits as discussed below.

Water leakage

Sydney Water was awarded Full Compliance for requirements related to meeting the water leakage target that leakage from the drinking water supply system does not exceed 105 ML per day by 30 June 2009. Sydney Water was also awarded full compliance for the requirement to report leakage performance to IPART.

Response Time for Water Main Breaks

Sydney Water achieved Full Compliance for response time requirements. Last year, we undertook to clarify the anomaly between the licence requirement that all priority 4 leaks and bursts are resolved within 5 days and the licence provision that Sydney Water should provide an explanation for those priority 4 leaks that took longer than 5 days to resolve. We decided that full compliance should be awarded if Sydney Water provided us with a satisfactory explanation for priority 4 leaks that took longer than 5 days to resolve. Full compliance was awarded for this requirement since Sydney Water provided a satisfactory explanation for all priority 4 leaks that took longer than 5 days to resolve.

Priority Sewerage

Sydney Water reported that all projects in the Priority Sewage Program (PSP) Stage 1 are operational and the service is available for customer connection. Accordingly, Sydney Water was awarded Full Compliance for this section of the licence.



4.2 IPART’s Recommendation

As mentioned above, we intend to monitor the validation of Sydney Water’s method to determine peak demand design loads for water supply to new areas. Accordingly, we recommend that Sydney Water should:

Provide IPART with a report by 1 September 2010, which provides an up-date on the methodology, validation, sensitivity and risk analyses undertaken for design of water infrastructure and how this may impact on future licence compliance and expenditure.

We intend to review this work as part of the 2009/10 audit of Sydney Water’s Operating Licence and any future audits, as necessary.


Sydney Water achieved full compliance with the auditable requirements of the Infrastructure Performance Section of the Operating Licence in 2008/09.

IPART notes a downward movement in the number of properties impacted by most system performance standards. The exception was the pressure standard and even the performance against this standard was well within the requirements of the licence. Sydney Water also met targets for leakage and response times. We congratulate Sydney Water on this performance.

5 Customer and Consumer Rights



Part 5 of the Operating Licence deals with the Customer Contract, the Code of Practice on Debt and Disconnection, and the Customer Council. It also includes requirements for measuring and reporting of Customer Service Indicators.

We consider that this section of the licence poses a low to moderate risk in terms of the likelihood and consequence of non-compliance and, as such, do not warrant audit every year. However, under our risk-based audit program, we spread the audit of low risk clauses across the entire term of the licence. Accordingly, we determined that some clauses in Part 5 dealing with Customer Service Indicators should be audited in 2008/09.

5.1 Audit Findings

Sydney Water achieved Full compliance for requirements concerning the collection, reporting and analysis of information dealing with customer service indicators.


We recommend that Sydney Water considers the recommendations and suggestions to improve performance pertaining to this part of the licence in the consultant’s audit report, at Appendix B.


The indicators show an increase in complaints about billing. Analysis of this information shows that this increase is related to the performance of a water meter reading contractor. Sydney Water has rectified this problem. However, the consultant has made some suggestions to improve future performance in this area.

6 Complaint and Dispute Handling


6 Complaint and Dispute Handling

Part 6 of the Operating Licence requires Sydney Water to establish and maintain internal complaint handling procedures, and maintain membership of an industry based dispute resolution scheme. Additionally, Sydney Water must report to IPART annually on all external complaints brought against it that relate to its performance under the licence or the Customer Contract.

IPART has assessed Part 6 of the licence as mainly low risk for the purposes of risk-based auditing and, as such, does not warrant audit every year. However, under our risk-based audit program, we spread the audit of low risk clauses across the entire term of the licence. Accordingly, we determined that clauses in Part 6 dealing with Internal Dispute Resolution should be audited in 2008/09.

6.1 Audit Findings

Sydney Water achieved Full compliance for requirements related to its internal complaints handling procedures.


We have no recommendations in relation to this section of the licence.


Building on the full compliance grading awarded in this audit, Sydney Water is developing a new customer information system that will allow more sophisticated recording and analysis of customer data. This development should support future compliance with customer related sections of the licence.

7 Environment – Indicators and Management



Part 7 of the Operating Licence deals with the monitoring and reporting of Environmental Performance Indicators, environment management systems and plans, and targets for potable water use in sewage treatment plants.

Under the risk-based auditing framework, we consider this part of the Licence constitutes low to moderate risks on non-compliance. However, under our risk-based audit program, we spread the audit of low risk clauses across the entire term of the licence. Accordingly, we determined that most clauses in Part 7 should be audited in 2008/09.

7.1 Audit Findings

Environment Indicators

Sydney Water was awarded Full Compliance for requirements relating to the monitoring, recording and reporting on the Environmental Performance Indicators in Schedule 3 of the licence for 2008/09. Comparable historical data has been included in the report, where this is available.

Environmental Management

Sydney Water was awarded Full Compliance in relation to the requirements to annually review and update its Environment Plan in accordance with its EMS, and to make the Plan available to the public.

Potable Water Use

Sydney Water was awarded Full Compliance for this section of the licence since it met its targets relating to the use of potable water and recycled water at sewage treatment plants.


We recommend that Sydney Water considers the recommendations identified for this part of the licence in the consultant’s audit report, at Appendix B.




Sydney Water had provided IPART with an Environmental Performance Indicators Report and a progress report against its 2007-2012 Environment Plan.

The reports are generally concise and informative. The Environmental performance Indicators Report includes a summary of Sydney Water’s performance in 2008/09 and its overall performance over the period where historical data was available.

Sydney Water demonstrated that it has achieved the June 2009 targets in respect to:

reducing potable water use by 80% for Malabar, North Head and Bondi sewage treatment plants

ensuring all sewage treatment plants use at least 85% recycled water for treatment processes, and

undertaking potable water efficiency audits at sewage treatment plants.

8 Water Conservation and Demand Management



Part 9 of the Operating Licence deals with water conservation and demand management. It includes requirements relating to a water conservation target, demand management strategy, reducing discharges, water conservation rating and labelling.

Under the risk-based auditing framework, IPART considers this part of the Licence to be one that poses a moderate to high risk in terms of the likelihood and consequence of non-compliance. Consequently, we determined that most clauses in Part 7 should be audited in 2008/09.

8.1 Audit Findings

Sydney Water achieved Full compliance with the auditable demand management requirements in the licence.

Water Conservation Target

Sydney Water was awarded Full Compliance for these sections of the licence. In 2008/09, an estimated consumption of 309 litres per person per day (LCD) was achieved. This figure takes account of corrections for climate and the effects of water restrictions. The comparable figure for 2007/08 was 306 LCD.

If the effects of water restrictions were removed, the estimated consumption would have been 372 LCD in 2008/09 and 378 LCD in 2007/08. This reduction in estimated consumption demonstrates improved performance against the Water Conservation Target of 329 LCD by 2010/11.

Demand Management Strategy

Sydney Water achieved Full Compliance for giving due consideration to demand management when planning the future provision of services, and for providing the Water Conservation and Recycling Implementation Report 2007/08 to IPART in accordance with the licence requirements. Full Compliance was also awarded for the required content of the Water Conservation and Recycling Implementation Report.



Reducing Discharges

Sydney Water achieved Full Compliance with this section of the licence. The requirements of this section relate to meeting any water reuse target set by the Minister and taking action to generate reuse water.

Recycling and water conservation measures reduce discharge to waterways. The 2006 Metropolitan Water Plan includes a target for recycling 70GL of water by 2015. Sydney Water currently recycles 40ML/day from existing sewage treatment plants. Sydney Water expects that in 2015, 126GL/year of treated wastewater will be prevented from entering the waterways. Sydney Water projections suggests that recycling will contribute 70GL/year to this total and water conservation programs will contribute a further 56GL/year.

8.2 IPART Recommendations

We have no recommendation in respect of water conservation and demand management.


Sydney Water achieved full compliance with the audited demand management requirements in 2008/09, and demonstrated that it is progressing towards meeting the water conservation target of 329 litres per capita per day by 2010/11. Sydney Water has a strategy in place to implement a range of water conservation initiatives to ensure that it meets the Water Conservation Target by 2010/11.

IPART acknowledges that Sydney Water has shown commitment to addressing the water conservation and demand management requirements of the licence and continues to improve its performance through its adaptive management approach.

9 Liability Issues


9 Liability Issues

Part 11 of the Operating Licence requires Sydney Water to comply with specific objectives regarding liability issues

We have assessed Part 11 of the licence as mainly low risk for the purposes of risk-based auditing and, as such, does not warrant audit every year. However, under our risk-based audit program, we spread the audit of low risk clauses across the entire term of the licence. Accordingly, we determined that clauses in Part 11 dealing with damage and compensation to persons should be audited in 2008/09.

9.1 Audit Findings

Sydney Water achieved Full compliance for requirements related to damage to persons.


We have no recommendations in relation to this section of the licence.


Sydney Water has an effective claims management system that assists in liability management.

10 Historical Compliance



The following provides an update of the actions taken by Sydney Water and IPART to address the main recommendation resulting from the 2007/08 audit and demonstrates Sydney Water’s historical compliance.

Recommendation: Amendments to the Monitoring and Reporting Protocol in relation to the measurement of response time for Priority 4 water main breaks/leaks should be resolved between IPART and Sydney Water to avoid contradiction between compliance requirements.

This issue was resolved by a decision of the Delegated Tribunal that full compliance should be awarded if Sydney Water provided IPART with a satisfactory explanation for priority 4 leaks that took longer than 5 days to resolve. This decision was communicated to Sydney Water on April 30, 2009.

Table 10.1 displays the performance of Sydney Water in audits since the commencement of the current licence.

Table 10.1 Historical performance of Sydney Water

Clause Summary of requirement 2005/06 2006/07 2007/08 2008/09

3 Water Quality

3.1 Drinking Water Quality - Standards Full Full Full Full

3.2 Drinking Water Quality - Monitoring Full Desktop - Full

3.3 Drinking Water Quality - Reporting Full Full Full Full

3.4 Drinking Water - Planning Full Full Full Full

3.5 Drinking Water – Incident Management Full Desktop - Full

3.6 Other Grades of Water Full Full Full Full


4.1 Water Pressure Standard - - - -

4.2 Water Continuity Performance - - - -

4.3 Sewage Overflows on Private Property Standard

- - - -

4.4 Compliance with Performance Standards Full Full Full Full

4.5 Reporting on system performance standards

Full Desktop - -

4.6 Review of system performance standards - Desktop - -

4.7 Service quality and system performance Full Desktop - Full



indicators

4.8 Asset Management Obligation - Desktop - Full

4.9 Reporting on Asset Management System - Desktop - Full

4.10 Auditing the Asset Management System - - - -

4.11 Water Leakage Full Full - Full

4.12 Reports related to water leakage Full Full - Full

4.13 Response time for water mains breaks Mod-Full Full Full Full

4.14 Priority Sewerage Full Desktop - Full


5.1 Customer Contract High-Full Desktop - -

5.2 Consumers Full Desktop - -

5.3 Code of Practice and Procedure on Debt and Disconnections

Full Desktop - -

5.4 Customer Councils High-Full Desktop - -

5.5 Customer Service Indicators High-Full Desktop - Full

6 Complaints and Dispute Handling

6.1 Internal Dispute and Resolution Process High-Full Desktop - Full

6.2 External Dispute Resolution Scheme Full Desktop - -

6.3 Complaints to other bodies High-Full Desktop - -


7.1 Environmental Indicators High-Full Desktop - Full

7.2 Environmental Management High-Full Desktop - Full

7.3 Potable Water Use Full Desktop - Full

7.4 Metering of Individual Units Full Full - -


9.1 Water Conservation Target

9.2 Demand Management Strategy Full Full Full Full

9.3 Reducing Discharges Full Desktop - Full

9.4 Water Conservation Rating and Labelling Full Desktop - -

9.5 Review of Part 9 of Licence - - -

11 Liability Issues

11.1 Contracting Out - - - -

11.2 Damage and Compensation to persons - - - Full

11.3 Competitive neutrality - - - -

12 Operational Audits of this Licence

12.1 What the Audit Report is on Mod Desktop - -



Appendices

A Audit Scope for Sydney Water Corporation’s 2008/09 Operational Audit

Sydney Water Corporation Operational Audit 2008/09 IPART


SC signifies that IPART required a Statement of Compliance. Not subject to audit this year.

NR signifies No Requirement to audit.

Licence Clause

Operating Licence Section Title

COMMENT

3.1 Drinking Water Quality – Standards

AUDIT

3.2 Drinking Water Quality – Monitoring

AUDIT Detailed audit of Monitoring and Reporting requirements relating to Water Quality data.

3.3 Drinking Water Quality – Reporting

AUDIT Detailed audit of Monitoring and Reporting requirements relating to Water Quality data.

3.4 Drinking Water – Planning AUDIT 3.4.4

S C 3.4.1-3 For 3.4.1, prior to the commencement of the Audit, SWC must advise IPART whether the plan has changed and the nature of any changes. Changes to be audited. SWC advises that there are no changes.

3.5 Drinking Water – Incident Management

AUDIT Audit of 3.5.2 should validate that the Plan is current in terms of contacts and organisations, and that any update in procedures required as a result of reviews of performance that occur with trials and incidents are carried out.

Prior to the commencement of the Audit, SWC must advise IPART whether the plan has changed and the nature of any changes. Procedure amended 14 May 2009 and is being reviewed by NSW Health.

3.6 Other grades of water AUDIT 3.6.1

NR 3.6.2

S C 3.6.3


IPART Sydney Water Corporation Operational Audit 2008/09

Licence Clause


COMMENT

4.1-4.4 System Performance Standards

AUDIT 4.4

S C 4.1-4.3 4.4 is the requirement to comply with standards in 4.1 – 4.3.

Prior to the commencement of the audit, SWC should advise IPART if there has been any change in data collection practices or technology which would improve the inherent reliability of the data used for 4.1 – 4.3.

This is to assess the quality of the base data (as opposed to the processes) used to assess compliance with system performance standards. SWC advise no changes as described.


S C Statement of Compliance is to specifically confirm that Sydney Water’s record system has not changed. Changes will be audited.

4.6 Review of system performance standards

NR NR since the System Performance Standards have not been amended.

4.7 Service quality and system performance indicators

AUDIT 4.7.1 and 4.7.3,

NR 4.7.2

S C 4.7.4

Statement of Compliance for 4.7.4 is to specifically confirm that Sydney Water has provided the full extent of relevant documentation.

4.8 Asset management obligation

AUDIT 4.8(a)

S C 4.8 (b), (c) and (d).

Asset management is subject to separate audit.

Clause 4.8 (a) recognises that the ability to meet licence obligations is linked to the medium to long-term strategy and tactics in the AM Plan and not subject to minor annual operational or maintenance adjustments without context.

The audit of 4.8(a) is to verify that the AM Plan incorporates level of service targets that are in alignment with the licence obligation.

4.9 Reporting on the asset management system

AUDIT 4.9.2

NR 4.9.1 The AM audit (4.9.1) is subject to a separate audit.

This audit is to verify, that the audited plan is being implemented.

4.10 Auditing the asset management system

NR Subject to separate audit.



Licence Clause


COMMENT

4.11 Water Leakage AUDIT Decision of Delegated Tribunal of 26 May 2009 that 105 ±16 ML/day constitutes compliance

IPART notes that the inherent errors in leakage calculations are significant and require considerable interpretation and application of broad ranging assumptions. With respect to the large error bands associated with leakage estimation, the auditor needs to form an opinion whether these errors are systematic in nature and not random. i.e. all things being equal at this macro level, the error attributable to one source or another are likely to be of the same magnitude and sign from one year to the next. This means that while the actual value reported may be uncertain, the validity of the trend line in performance needs to be separately evaluated.

4.12 Reports Related to Water Leakage

AUDIT

4.13 Response time for water main breaks

AUDIT 4.13.1, 4.13.3 and 4.13.4

S C 4.13.2

Decision of Delegated Tribunal communicated in letter of 30 April 2009 to SWC that for full compliance with clause 4.13.1(c), SWC needs to demonstrate to the satisfaction of IPART that it has exercised its best endeavours to stop water loss. This will need explanations for all priority 4 jobs in excess of 5 days.

4.14 Priority Sewerage AUDIT 4.14.1

S C 4.14.2 and 4.14.3

NR 4.14.4

The requirement in 4.14.1 involves the lead times involved in planning, approvals, design and construction. Issues due to poor project management, complications or delays need to be identified in a timely manner so either the timing can be adjusted or the plan changed. These delays can be identified via an early audit of planning and progress.

Statement of Compliance for 4.14.3 needs to include reasons for any anticipated compliance/non-compliance, since these will inform the audit of 4.14.1.

5.1 Customer Contract NR 5.1.1-5.1.3, 5.1.5-5.1.7 and 5.1.10

S C 5.1.4, 5.1.8 and 5.1.9

5.1.7 is No Requirement since Customer Contract was not reviewed.

5.2 Consumers S C



Licence Clause


COMMENT

5.3 Code of practice and procedure on debt and disconnection

S C

5.4 Customer councils S C

5.5 Customer service indicators

AUDIT 5.5.1-5.5.3

NR 5.5.4

6.1 Internal Dispute Resolution Process

AUDIT

6.2 External Dispute Resolution Scheme

S C

6.3 Complaints to other bodies

S C

7.1 Environmental Indicators S C 7.1.1

AUDIT 7.1.2-7.1.4

7.2 Environment Management

S C 7.2.1 and7.2.5

AUDIT 7.2.2, 7.2.4, 7.2.6 and 7.2.7

NR 7.2.3

7.3 Potable Water Use AUDIT

7.4 Metering of individual units

S C

8 Pricing S C


AUDIT

9.2 Demand Management Strategy

AUDIT 9.2.1-9.2.3

NR 9.2.4

Note Delegated Tribunal decision of 26 May 2009 that all parts of 9.2.3 are auditable. Part 9.2.3(b) requires a description based on information available to SWC.

9.3 Reducing Discharges AUDIT

9.4 Water Conservation Rating and Labelling

S C

9.5 Review of Part 9 of Licence NR

10.4 Connection of Services S C

10.5 Non-exclusive licence NR

11.1 Contracting out NR

11.2 Damage and Compensation to Persons

AUDIT

11.3 Competitive Neutrality S C 11.3.1

NR 13.3.2

11.3.1 S C



Licence Clause


COMMENT

11.3.2 NR

12.2 What the audit is to report on

S C 12.2.1 (b) Sydney Water to demonstrate that the MoU exists and that it has exercised its best endeavours to maintain the MoU.

B GHD Final Report – 2009 Operational Audit of Sydney Water Corporation



Independent Pricing andRegulatory Tribunal

Report for 2008/09 Operational Audit ofSydney Water Corporation

Audit Report

November 2009

i21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Contents

Glossary / Definitions iv

Abbreviations iv

Glossary/Definitions v

Compliance Table Assessment vi

Executive Summary vii

Water Quality (Part 3) vii

Infrastructure Performance (Part 4) vii

Customer and Consumer Rights (Part 5) vii

Complaint and Dispute Handling (Part 6) vii

Environment – Indicators and Management (Part 7) vii

Water Conservation and Demand Management (Part 9) vii

Liability Issues (Part 11) vii

Key Findings and Recommendations viii

1. Introduction 1

1.1 Background 1

1.2 Operating Licence 5

1.3 IPART Scope of Work 5

1.4 The Relevant Australian Standard Applied 5

1.5 Key Findings and Recommendations 6

2. Audit Methodology 8

2.1 Audit Preparation 8

2.2 Conduct of the Audit 9

2.3 Audit Interviews 9

2.4 Audit Team 9

3. Licence Part 3 - Water Quality 11

3.1 Summary of Requirements 11

3.2 Water Quality – Compliance 11

3.3 Discussion – Drinking Water Quality 11

3.4 Discussion – Supply of Other Grades of Water 13

3.5 Recommendations 13

ii21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

4. Licence Part 4 - Infrastructure Performance 24


4.2 Infrastructure Performance – Compliance 24

4.3 Discussion 24

4.4 Factors Affecting Compliance 25


5. Licence Part 5 – Customer and Consumer Rights 35


5.2 Customer and Consumer Rights – Compliance 35

5.3 Discussion 35



6. Licence Part 6 – Complaint and Dispute Handling 38


6.2 Complaint and Dispute Handling – Compliance 38

6.3 Discussion 38


7. Licence Part 7 – Environment – Indicators andManagement 41


7.2 Environment – Indicators and Management – Compliance 41

7.3 Discussion 41



8. Licence Part 9 - Water Conservation and DemandManagement 51


8.2 Water Conservation and Demand Management – Compliance 51

8.3 Discussion 51



9. Licence Part 11 – Liability Issues 64


9.2 Liability Issues – Compliance 64

iii21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

9.3 Discussion 64



10. Concluding Remarks 67

Table IndexTable 1 Summary of Compliance viii

Table 2 Summary of Compliance 6

Table 3 Compliance Assessment for Part 3 of Licence. 14




Table 7 Potable Water Use (STPs) 44




Figure IndexFigure 1-1 Sydney Water Corporation’s Area of Operations 2

Figure 1-2 Sydney Water Corporation’s Water Infrastructure 3

Figure 1-3 Sydney Water Corporation’s Sewerage Infrastructure 4

Figure 2-1 Structure and Responsibility of Audit Team 10

AppendicesA Comparison of Compliance

B Key Documents Referenced During Audit

C Stakeholder Consultation

iv21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Glossary / Definitions

Abbreviations

Acronym Description

ADWG(1996)

Australian Drinking Water Guidelines (1996), National Health andMedical Research Council and Agriculture and ResourceManagement Council

ADWG(2004)

Australian Drinking Water Guidelines (2004), National Health andMedical Research Council and Agriculture and ResourceManagement Council

Act Sydney Water Act, 1994

ANZECC Australia and New Zealand Environment and ConservationCouncil

AS Australian Standard

ARMCANZ Agriculture and Resource Management Council of Australia andNew Zealand

DECCW Department of Environment , Climate Change and Water

DNR Department of Natural Resources

E.Coli Escherichia coli

EDC Every Drop Counts

EMS Environmental Management System

ESD Ecologically Sustainable Development

EWON Energy and Water Ombudsman New South Wales

GHD GHD Pty Ltd

GWh Gigawatt hour(s)

HACCP Hazard Analysis and Critical Control Points

IPART Independent Pricing and Regulatory Tribunal (NSW)

ISO International Standards Organisation

km Kilometre

Lcd Litres per capita per day

ML Megalitre (1 million litres)

MOD Modified – Modified from ISO 10002:2004, Quality management—Customer satisfaction—Guidelines for complaints handling

MOU Memorandum of Understanding

v21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Acronym Description

NATA National Analytical Testing Authority

NHMRC National Health and Medical Research Council

NSW Health New South Wales Department of Health

NTU Nephelometric turbidity unit

pa Per annum

pH A measure of the acidity or basicity of a solution – literally‘potential of Hydrogen’

QA Quality Assurance

RWQMP Recycled Water Quality Management Plan

SCA Sydney Catchment Authority

SLG Strategic Liaison Group

SOP Standard Operating Procedure

STP Sewage Treatment Plant

SWC Sydney Water Corporation

SWEMS Sydney Water Environmental Management System

SydneyWater


WAMS Water Asset Management System

WELS Water Efficiency Labelling Scheme

WCRI Water Conservation and Recycling Implementation Report

WFP Water Filtration Plant

WSAA Water Services Association of Australia

Glossary/Definitions

Term Meaning

Act Sydney Water Act, 1994.

Area of Operations As specified in section 10(1) of the Act anddescribed in Part 10 of the Operating Licence.

Audit period 1 July 2008 to 30 June 2009.

Auditor GHD Pty Ltd.

vi21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Bulk Water Water supplied by the SCA to Sydney Water (underthe Bulk Water Supply Agreement) and to customersother than Sydney Water.

Bulk Water SupplyAgreement

The Bulk Water Supply Agreement between theSCA and Sydney Water signed on 13 April 2006.

Commencement Date 1 July 2005

End of Term Review A review of the Operating Licence to be undertakenon or about 1 January 2009.

Function Means a power, authority or duty.

Minister The Minister responsible for administering theprovisions of the Sydney Water Act, 1994.

Operating Licence The Licence between 1 July 2005 and 30 June2010.

Water ManagementLicence

A Water Management Licence granted under theWater Act, 1912 and issued by the DNR on 26August 2005.

Compliance Table Assessment

Term Meaning

Grading of Compliance The following ratings are used to grade achievementof compliance with a Licence condition.

Full compliance All requirements of the condition have been met.

High compliance Most requirements of the condition have been metwith some minor technical failures or breaches.

Moderate compliance The major requirements of the condition have beenmet.

Low complianceKey requirements of the condition have not been metbut minor achievements regarding compliance havebeen demonstrated.

Non compliance The requirements of the condition have not been met.

Insufficient informationRelevant, suitable or adequate information to make anobjective determination regarding compliance was notavailable to the auditor.

No requirement

The requirement to comply with this condition doesnot occur within the audit period or there is norequirement for Sydney Water to meet, such as adefinition, a requirement placed upon another agencyor the requirement was met in an earlier audit period.

vii21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Executive Summary

Sydney Water has managed its resources to achieve Full compliance with the

Operating Licence. Compliance with the auditable Parts of the Operating Licence

(shown in brackets below) for the 2008/09 audit period is summarised below.

Water Quality (Part 3)

Sydney Water was assigned Full compliance with respect to the requirements for the

supply of treated drinking water to its customers. The water quality supplied is

generally of an excellent standard and complies with the health related requirements ofthe Australian Drinking Water Guidelines (ADWG) and the aesthetic relatedrequirements of NSW Health and the Minister.

Infrastructure Performance (Part 4)

Sydney Water achieved Full compliance for all infrastructure performance

requirements, including water pressure, water continuity, sewerage overflows, systemperformance and water leakage.

Customer and Consumer Rights (Part 5)

Sydney Water achieved Full compliance with respect to the requirements for all

customer and consumer rights.

Complaint and Dispute Handling (Part 6)

Sydney Water achieved Full compliance with respect to the requirements for

complaint and dispute handling.

This part of the Licence has not been subject to audit in the previous two years.

Environment – Indicators and Management (Part 7)

Sydney Water achieved Full compliance with the requirements related to its

environmental management system, the environmental management plan and

environmental indicators specified in the Licence.

Water Conservation and Demand Management (Part 9)

Sydney Water demonstrated a high level of commitment to water conservation anddemand management, and achieved Full compliance for all requirements.

Liability Issues (Part 11)

Overall, Sydney Water exhibited Full compliance with the requirements for liability

issues.

viii21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Key Findings and Recommendations

In general, Sydney Water generally performed well against the audited clauses of theOperating Licence. A summary of compliance is presented in Table 1.

Table 1 Summary of Compliance

Part Compliance - Overall

3 Water Quality Full compliance

4 Infrastructure Performance Full compliance

5 Customer and Consumer Rights Full compliance

6 Complaint and Dispute Handling Full compliance

7 Environment – Indicators andManagement

Full compliance

9 Water Conservation and DemandManagement

Full compliance

11 Liability Issues Full compliance

The key recommendations of the 2008/09 Operational Audit are presented below and

grouped by the audited parts of the Operating Licence.

Additionally, secondary recommendations are presented in the body of this report.

Sydney Water is encouraged to give due consideration to those recommendations andfacilitate improved performance and compliance for subsequent audit periods.

Licence Part 3 - Water Quality

There are no key recommendations required to ensure Sydney Water’s compliancewith Part 3.

Licence Part 4 - Infrastructure Performance

It is recommended that Sydney Water:

R 4.1 report to IPART by 30 June 2010 on the methodology, validation,sensitivity and risk analyses undertaken for design of waterinfrastructure and how this standard or target may impact on futureLicence compliance and expenditure.

This should be undertaken annually for a period of 5 years and thenat 5 yearly intervals for a further 10 year period.

Licence Part 5 - Customer and Consumer Rights


Licence Part 6 - Complaint and Dispute Handling


ix21/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

Licence Part 7 - Environment – Indicators and Plans

There are no key recommendations required to ensure Sydney Water’s compliance

with Part 7.

Licence Part 9 - Managing Supply and Demand


with Part 9.

Licence Part 11 – Liability Issues


with Part 11.

121/18858/153771 2008/09 Operational Audit of Sydney Water CorporationAudit Report

1. Introduction

1.1 Background

GHD Pty Ltd was engaged by the Independent Pricing and Regulatory Tribunal(IPART) to undertake the 2008/09 Operational Audit of the Sydney Water Corporation(Sydney Water).

Sydney Water is a State Owned Corporation, which is wholly owned by the NSWGovernment. Its roles and responsibilities include providing drinking water, recycledwater, wastewater services and some stormwater services to more than four million

people in Sydney, Illawarra and the Blue Mountains (as shown in Figure 1-1). Theseroles are derived from the Sydney Water Act, 1994 (the Act) and the Operating Licence

issued to Sydney Water pursuant to Section 5 of the Act.

Schematic representations of the major water and sewerage infrastructure, under thecontrol of Sydney Water are shown in Figure 1-2 and Figure 1-3.


Figure 1-1 Sydney Water Corporation’s Area of Operations

Source: Sydney Water Corporation


Figure 1-2 Sydney Water Corporation’s Water Infrastructure



Figure 1-3 Sydney Water Corporation’s Sewerage Infrastructure



Part 12 of the Operating Licence provides that IPART (or its appointee) is to undertakean Operational Audit of Sydney Water’s performance against the requirements of itsLicence each year and report its findings to the Minister.

IPART commissioned GHD Pty Ltd to undertake the 2008/09 Operational Audit ofSydney Water covering the period 1 July 2008 to 30 June 2009. This will be the ninthaudit of Sydney Water undertaken by IPART. For the purposes of this audit,

compliance has been assessed against the 2005 - 2010 Operating Licence for SydneyWater.

IPART has identified a number of key issues for consideration arising out of previous

audits and the requirements of the 2005 - 2010 Operating Licence. These key issuesinclude:

Water Quality Monitoring and Reporting

Australian Guidelines for Water Recycling

Water Leakage

IPART has adopted a risk based approach to auditing. As a result, the Audit forSydney Water will be undertaken in two parts as follows:

Operating Licence requirements requiring detailed assessment and interview of theSydney Water representatives – audited by GHD Pty Ltd; and

Operating Licence requirements requiring Statement of Compliance – reviewed bythe IPART Secretariat.

This report addresses the Operating Licence requirements that have been audited byGHD Pty Ltd.

1.2 Operating Licence

The performance of Sydney Water was assessed against the requirements of its

Operating Licence. The Licence is available from Sydney Water’s website:.

http://www.sydneywater.com.au/Publications/LegislationActs/OperatingLicence.pdf

1.3 IPART Scope of Work

The Scope of Work is available from the IPART website:

http://www.ipart.nsw.gov.au

1.4 The Relevant Australian Standard Applied

To meet the specific requirements of IPART, the operational audit was undertakenadopting a methodology consistent with ISO 14011 “Guidelines for EnvironmentalAuditing”. This guideline provides a systematic approach to defining the requirements


of the audit, planning, interpreting Licence conditions, collecting audit evidence,objectively assessing the evidence, and reporting in a clear and accurate manner. Italso ensures that the audit has been conducted in accordance with an established and

recognised audit protocol.

1.5 Key Findings and Recommendations

In general GHD Pty Ltd found that Sydney Water generally performed well against theaudited clauses of the Operating Licence. A summary of compliance is presented in

Table 2.

Table 2 Summary of Compliance

Part Compliance - Overall

3 Water Quality Full compliance

4 Infrastructure Performance Full compliance

5 Customer and Consumer Rights Full compliance

6 Complaint and Dispute Handling Full compliance

7 Environment – Indicators andManagement

Full compliance

9 Water Conservation and DemandManagement

Full compliance

11 Liability Issues Full compliance

The key recommendations of the 2008/09 Operational Audit are presented below and

grouped by the audited parts of the Operating Licence.

Additionally, secondary recommendations are presented in the body of this report.

Sydney Water is encouraged to give due consideration to those recommendations andfacilitate improved performance and compliance for subsequent audit periods.

Licence Part 3 - Water Quality


Licence Part 4 - Infrastructure Performance



R 4.1 report to IPART by 30 June 2010 its validation, sensitivity and riskanalyses undertaken in support of the new design demands and howthese changes are impacting on future Licence compliance andexpenditure.

This should be undertaken annually for a period of 5 years and thenat 5 yearly intervals for a further 10 year period

Licence Part 5 - Customer and Consumer Rights


Licence Part 6 - Complaint and Dispute Handling


Licence Part 7 - Environment – Indicators and Plans


Licence Part 9 - Managing Supply and Demand


Licence Part 11 – Liability Issues


A comparison with results from previous audits (under the current Operating Licence)is provided in Appendix A.


2. Audit Methodology

The audit methodology involved the preparation of an audit plan, inception meetings,application of audit tests, review and reporting. The audit tests directly relate to the

respective clauses of each condition of the Operating Licence, assembling evidencethrough document review, interviews and analysis to determine compliance.

The findings of the report are presented in a format consistent with the structure of the

Operating Licence and not in a ‘prioritised order’ or ‘order of significance’. The reportalso identifies factors that have affected compliance and presents recommendations toimprove compliance in subsequent years, where required.

2.1 Audit Preparation

2.1.1 Draft Audit Plan

To ensure that the audit requirements outlined in the Operating Licence and the briefwere addressed, the scope of the audit was confirmed with IPART and a draft auditplan prepared.

A number of stakeholders to whom Sydney Water has obligations under the OperatingLicence were consulted during the audit period. Further details are provided inAppendix C.

2.1.2 Inception Meetings

Following the preparation of the draft audit plan, an inception meeting was held with

Sydney Water personnel on 14 September 2009. IPART representatives also attendedthe meeting.

The primary objective of this meeting was to develop working relationships, mutual

understandings and expectations relating to the requirements and process of the audit,to discuss and agree upon the changes to the audit methodology and to provide anopportunity for Sydney Water to present an overview of compliance and progress since

the previous audit period.

2.1.3 Audit Questionnaires

Specific audit questionnaires were developed for all requirements within the scope ofthe audit. These questionnaires were designed to establish substantive compliancewith the Licence requirements as well as to identify factors that have, or may have, animpact on performance.

The audit questionnaires also assessed the underlying procedures that Sydney Water


has in place relevant to the requirements and the application of these procedures bySydney Water. This was designed to verify that the underlying management processeswithin the organisation are sound and that there is confidence that work is carried out

systematically and in accordance with internal procedures.

Audit questionnaires were provided to Sydney Water prior to the audit interviews toallow Sydney Water the opportunity to prepare for the interview and collate the

necessary documentary evidence.

2.2 Conduct of the Audit

To ensure a positive relationship, audit protocols were established at the inceptionmeeting between the auditor and Sydney Water representatives. The protocols were

designed to ensure efficient and transparent information transfer and foster an openand professional working relationship between all parties.

Both Sydney Water and the Auditor generally adhered to the agreed protocols.

2.3 Audit Interviews

The specialist auditors conducted interviews during September 2009. The interviewswere generally guided, but not limited, by the pre-prepared questionnaires and SydneyWater was provided the opportunity to present evidence towards demonstrating

compliance with the Licence requirements.

A copy of the key documentation received from Sydney Water during the conduct ofthe audit is provided in Appendix B.

2.4 Audit Team

The audit team consisted of specialist auditors from GHD. The audit was coordinatedby the Project Manager calling on the expertise of the team members for the auditingof key areas as shown below in Figure 2-1.


Figure 2-1 Structure and Responsibility of Audit Team

IPART

PROJECT DIRECTOR & TECHNICALADVISOR/QUALITY ASSURANCE

Dr Ross Woodward

PROJECT MANAGER

Emma Every

WATERQUALITY

Lead Auditor

Dr PeterNadebaum

INFRASTRUCTURE

Lead Auditor

Tom Carpenter

ENVIRONMENT

Lead Auditor

Ross Woodward

WATERCONSERVATION

Lead Auditor

Tom Carpenter

SUPPORT PERSONNEL

Emma Every

Keryn Hassel

LIABILITY

Lead Auditor

MauricePignatelli

CUSTOMERRIGHTS

Lead Auditor

Tom Carpenter

COMPLAINTHANDLING

Lead Auditor

Tom Carpenter


3. Licence Part 3 - Water Quality

3.1 Summary of Requirements

Part 3 of the Operating Licence requires Sydney Water to provide its customers andconsumers with water of an adequate quality. A key objective of this is to ensure thatdrinking water is safe to use and consume.

For the purpose of the Risk Based Audit, Licence clauses 3.1 to 3.6, were generallysubject to a detailed audit by GHD. Several subclauses (3.4.1 – 3.4.3 and 3.6.2 –3.6.3) were subject to statements of compliance (and hence subject to a review by

IPART), the assessment of which does not form part of this report.

3.2 Water Quality – Compliance

The level of compliance by Sydney Water with Part 3, Water Quality, is described inTable 3.

Full compliance has been assessed for all clauses. Overall, Sydney Water achievedFull compliance with the requirements of this part of the Licence.

3.3 Discussion – Drinking Water Quality

3.3.1 Drinking Water Quality

As noted in previous audits, the quality of drinking water supplied to customers is of an

excellent standard and complies with the health related requirements of the currentAustralian Drinking Water Guidelines (ADWG 2004) and the aesthetic related

requirements specified by NSW Health and the Minister.

Information provided by Sydney Water in its report Implementation of the Five-yearDrinking Water Quality Management Plan 2005 - 2010 provides a summary of the

situation with respect to customer satisfaction during 2008/09. The information

supports the conclusion that the water is of an excellent quality. A review of customercomplaints shows that there is a reducing trend in the number of complaints and thatthe number of complaints is low, supporting the conclusion that the water is of an

excellent quality.

Sydney Water has adopted a risk-based approach to the management of watertreatment and supply, in accordance with the framework outlined in the AustralianDrinking Water Guidelines. Sydney Water has developed and maintains a Five YearDrinking Water Quality Management Plan 2005 – 2010 that provides a systematic

approach to identifying where risks to drinking water quality can arise and prioritising

improvement works to address the higher risk issues. Over the years Sydney Water


has carried out many improvements and this has been documented in its most recentimplementation report 2007 - 2008 Annual Report - Implementation of the Five-yearDrinking Water Quality Management Plan 2005 - 2010. This is an excellent document

and provides a comprehensive summary of the status of works.

Sydney Water prepares and maintains a plan (Drinking Water Quality OperationalMonitoring Plan 2008 – 2009) that details the operational monitoring that is carried out

to provide assurance that the operation of the water treatment and supply systemaccords with the requirements for supply of water of appropriate quality. This isconsistent with the ADWG that places an emphasis on operational control being the

primary means of assuring water quality complies with requirements, with monitoring ofthe distribution system then being verification of this.

Variation in the quality of bulk water supplied by Sydney Catchment Authority is a key

area of risk. Variation can arise, for example, by the water inflows associated withstorms in the catchments and it has been a consideration in previous audits as towhether Sydney Water could demonstrate adequate management of this risk. In the

current audit year, there have not been extreme weather events that have tested theSydney Water treatment and supply systems; however, events in previous years haveprovided confidence that the system can be expected to manage such events.

With respect to assuring that pesticides used in the Sydney Catchment Authority(SCA) catchments are not present in the raw water supplied to Sydney Water’streatment plants, SCA has assessed the use and risk associated with various

pesticides. Sydney Water advises that SCA will institute monitoring in the coming yearof the additional pesticides that this assessment has indicated to be of highest priority.The auditor understands that it has taken more than five years to select a suite of

pesticides and implement the additional monitoring. Although it is not expected thatpesticides will be found at concentrations of concern through this work, the time forcompleting this program of work appears to be excessive.

With respect to assuring that pesticides used in the Sydney Catchment Authority(SCA) catchments are not present in the raw water supplied to Sydney Water’streatment plants, SCA has carried out a program over several years assessing the use

and risk associated with various pesticides. Sydney Water advises that SCA willinstitute monitoring in the coming year of the additional pesticides that this programhas indicated to be of highest priority. This will provide additional information to that

already available that pesticides are not present in the raw water and therefore are notof concern in the treated water.

3.3.2 Joint working with NSW Health and SCA

Sydney Water has established a good working relationship with NSW Health and the

Sydney Catchment Authority. This relationship provides confidence that issuesrequiring joint consideration by these organisations will be properly dealt with. A review


of the minutes of the Joint Operational Group indicated that a wide range of waterquality issues were discussed during 2008/09.

3.3.3 Incident Management

Sydney Water has a well-established Incident Management Plan and has tested this

Plan on a number of occasions in previous years. The Plan was again recently testedthrough Exercise Rainbow, conducted on 14 October 2008. This exercise simulated aspill at Broughtons Pass resulting from a motor vehicle accident.

3.3.4 Factors Affecting Compliance

The auditor did not identify specific issues of concern that might affect compliance with

the Licence in the coming years.

3.4 Discussion – Supply of Other Grades of Water

Sydney Water complies with the current requirements that have been agreed withNSW Health for the supply of other grades of water.

Sydney Water is in a period of transition, with the active expansion of the number andquantities of other grades of water supplied, and the requirements that have to be met.The new Australian Guidelines for Water Recycling (AGWR): Managing Health andEnvironmental Risks (Phase 1) 2006 (NRMMC, EPHC, AHMC) introduce more

rigorous requirements for management of re-use schemes. Sydney Water is carryingout considerable work to meet these requirements. While this work is not yet complete

and has not been the subject of detailed review in this audit, it can be expected that itwill lead to a higher level of management in the coming years.

An issue that will need to be addressed is agreeing with NSW Health on the

requirements for compliance for future Operational Audits; this may be limited toachieving compliance with the treated water supplied or compliance with the variousother requirements of the AGWR for managing such supplies.

3.5 Recommendations

3.5.1 Key Recommendations


3.5.2 Secondary Recommendations

There are no secondary recommendations.


Table 3 Compliance Assessment for Part 3 of Licence.

Clause Requirement Risk Compliance Target for FullCompliance

Findings – including addressing the risks and factors affecting compliance

3.1 Drinking Water Quality - Standards

3.1.1 (a) Sydney Water must complywith:

The Australian DrinkingWater Guidelines 1996relating to Health guidelinevalues and the Aestheticguideline values for pH,true colour, turbidity,aluminium, iron and zinc.

This presents ahigh risk to humanhealth. Failurewould imply thathealth guidelinesmay not be met andthis could give riseto serious andwidespread healtheffects.

Full compliance Full compliance withtargets in the ADWG 2004for drinking water

Sydney Water has adopted the 2004 revision of the Australian Drinking Water Guidelines (ADWG) for compliance purposes,for the health guideline values and the aesthetic guideline values for pH, true colour, turbidity, aluminium, iron and zinc. Thisadoption was formalised through the Sydney Water - NSW Health Memorandum of Understanding (MoU) in February 2006.

Review of the reported results indicates that the water has been of excellent quality and complies with the health andaesthetic parameters, with some variation in pH. In particular, 99.96% of E coli samples complied with the requirement ofzero organisms, which is an excellent result. Overall, the water quality had improved from the previous year (2007/08), withfewer exceptions in E coli, lower average concentrations of turbidity, nitrite and THMs, increased disinfection levels, andfewer customer complaints. There have not been any major storm events in the audit period that might have given rise tosignificant raw water quality excursions and hence possible treated water variations. Sydney Water advises that, because ofthe very low turbidity of the treated water, mains cleaning is not necessary and has not been practised now for several yearsand, despite this, the frequency of dirty water complaints has been reducing, supporting this management approach.

Of some 966 samples analysed for treated water, there were three detections of Cryptosporidium. While the ADWG doesnot specify a limit and does not recommend routine monitoring of treated water, it is required that these organisms not bepresent in treated water. Follow up sampling and analysis was carried out in accordance with the guidelines and inconsultation with NSW Health to show that these were isolated results and not indicative of a health concern. The auditornotes that the treated water turbidity averages 0.13 NTU in the delivery system; this is indicative of an excellent level oftreatment and a very low level of pathogens such as Cryptosporidium.

Sydney Water advised that the review by the Sydney Catchment Authority of the potential for pesticides in the catchmentshas now been completed and a revised sampling program will be carried out in the coming year.

There are a large number of exceedances of pH, one of the aesthetic guideline parameters. It is common that pH will vary inwater supplies resulting from, for example, leaching of cement from cement lined pipes. The monitoring plan adopts thecompliance requirement that “….a reasonable objective is to be confident that the mean value (or average) of results overthe preceding 12 months is less than the guideline value”. The ADWG suggests that this may be interpreted as the upperbound of the 95% confidence interval for the mean should be less than the guideline value.The ADWG also states that pHlevels up to 9.2 may be tolerated, with pH greater than 9.5 giving a bitter taste. Avoidance of excessive pH levels is alsorequired to avoid reductions in the effectiveness of disinfection, although this is less important for the Sydney Watersupplies that are chloraminated. The tables of results provided in the Quarterly Monitoring Reports list values for the 95th

percentile of results but not the upper 95% confidence limit for the mean; Sydney Water provided the auditor with a listing ofthe latter estimates and this confirmed that the pH results are in compliance. The auditor notes that the maximum pHrecorded for most systems was within the tolerable level, with some very infrequent maxima greater than 9.2. The very lowlevels of E coli detections indicate that the elevated pH was not resulting in a low effectiveness of disinfection. The numberof complaints reported was low and there was no indication of a problem with respect to taste. The auditor concludes thatthe pH results comply with the requirements for an aesthetic parameter and are within an acceptable range in terms of otherattributes.

In carrying out the analyses, Sydney Water has used laboratories that have current accreditation with NATA for theanalyses undertaken.

Review of the records indicates that where exceptions occurred, Sydney Water advised NSW Health and carried outadditional check monitoring, as necessary.




3.1.1 (b) The fluoridation plantoperating targets set out inthe Fluoridation Code.

This presents amoderate risk tohuman health.Some short termexceedances orshortfalls in dosingwould notnecessarily havehealth significance.

Full compliance Full compliance withtargets.

The results reported to NSW Health show that dosing of fluoride was within the specified range for all systems with theexception of a few occasions where fluoride was dosed at less than the specified range for some systems.

With respect to fluoridation, the primary requirement is to avoid overdosing and short periods of under dosing are not ofconcern. Overall, it is considered Sydney Water has achieved Full compliance with this requirement.

3.1.2 If there is inconsistencybetween the Healthguideline values and theAesthetic guideline values,the Health guidelinesvalues will prevail.

This presents amoderate risk, andis managed viaclause 3.1.1 (a).

Full compliance Confirmation that healthguidelines prevail.

The health guidelines have been applied.

3.1.3 In delivering the Services,Sydney Water must haveregard to the concepts ofgood practice set out in theAustralian Drinking WaterGuidelines 1996 and mustapply these concepts in themanner, form andtimeframes specified byNSW Health

This presents ahigh risk to humanhealth. Failurewould imply that thewater supplysystem is not wellmanaged and thiscould give rise toincidents andpotentially seriousand widespreadhealth effects.

Full compliance Review of systems toconfirm that concepts areapplied.

With respect to applying the concepts of good practice for water quality management, Sydney Water has adopted the 2004ADWG as agreed with NSW Health.

The systems that Sydney Water has in place are consistent with the concepts of good practice outlined in the ADWG 2004.Important aspects of Sydney Water’s management practices include:

Working with its supplier of bulk water, the Sydney Catchment Authority, to ensure that the bulk water quality isconsistent with the requirements necessary for the subsequent treatment by Sydney Water’s treatment plants to achieve

treated water that meets the requirements of the ADWG 2004.

Effective management of the treatment plants in accordance with the principles outlined in the ADWG 2004.

Monitoring of water quality in the distribution system and at customers’ taps.

Use of the Framework for Management of Drinking Water Quality outlined in ADWG 2004 to structure its Five-YearDrinking Water Quality Management Plan (2005 – 2010).

Maintenance of the independent certification of Sydney Water’s quality management system under ISO 9001.

In terms of confirming that Sydney Water’s management systems and risk management plans comply with therequirements of the ADWG Framework, the auditor notes that in 2006 Sydney Water participated in a pilot audit carriedout by the Water Services Association of Australia (WSAA) using the WSAA tool Aquality. The pilot audit considered the

12 elements of the ADWG and supports the conclusion that the Sydney Water drinking water quality managementsystem complies with the requirements of the ADWG. A formal independent review or certification of the drinking water

quality management system is not required under the terms of the Operating Licence or MOU with NSW Health. Notethat this Operating Licence audit has not been carried out to the depth that would be required to provide such acertification, although the reviews carried out by the auditor suggest that Sydney Water’s systems are consistent with

complying with the requirements for achieving such a certification.




3.2 Drinking Water Quality - Monitoring

3.2.1 Sydney Water mustprepare, to the satisfactionof NSW Health, acomprehensive annualDrinking water qualitymonitoring plan for thewater supply system by 31March each year, for theduration of the Licence andmust:

This presents amoderate risk. Itrelates to thepreparation of aPlan, and does notrelate directly towater quality.

Full compliance Evidence that the plan hasbeen prepared inaccordance with therequirements.

A 2008/09 Annual Drinking Water Quality Monitoring Plan has been prepared. This plan was forwarded to NSW Health on31 March 2009 (transmission document sighted) and was accepted by NSW Health on 15 May 2009.

3.2.1 (a) Include systemperformance monitoringand regular sampling,laboratory testing andprocesses to ensure qualitycontrol.

As for 3.2.1. Full compliance As for 3.2.1. The Plan includes the required elements. The Plan has a section on Quality Management, and this is consistent with goodpractice. Evidence was sighted that the laboratories are NATA certified and that the certification is current for the analysesundertaken and reported.

The MOU between Sydney Water and NSW Health requires that samples be tested in accordance with the testingrequirements of the 20th edition of Standard Methods for the Examination of Water and Wastewater published by theAmerican Public Health Association (APHA) or other established methods as appropriate. The methods listed in the Plan asbeing applied do not reference the APHA Standard Methods notation and therefore it would seem that they are not APHAmethods, but as the laboratory is NATA certified and NSW Health has agreed to the Plan, the methods comply with therequirement “or other established methods as appropriate”.

3.2.1(b) Have regard to theconcepts of good practiceset out in the AustralianDrinking Water Guidelines1996 and must apply thoseconcepts in the manner,form and timeframesspecified by NSW Health.

As for 3.2.1. Full compliance As for 3.2.1. The Plan has been formulated with reference to the requirements of the ADWG and complies with the requirements. NSWHealth has indicated its acceptance of the Plan.

3.2.1(c) Include the monitoring ofHealth guidelines values.

As for 3.2.1. Full compliance As for 3.2.1. The Plan includes monitoring of the parameters to verify that they meet the ADWG health guideline values.

3.2.1(d) include the monitoring ofAesthetic guidelines values

As for 3.2.1. Full compliance As for 3.2.1. The Plan includes monitoring of the parameters to verify that they meet the ADWG aesthetic guideline values

3.2.1(e) assess the quality of waterin Sydney Water’s watersupply system

As for 3.2.1. Full compliance As for 3.2.1. The Plan includes monitoring that allows assessment of Sydney Water’s water supply system. The monitoring includes, forexample, monitoring of a number of parameters that are not required for compliance purposes, including Cryptosporidiumand Giardia.

In addition, Sydney Water prepares a plan for operational monitoring (e.g. the Drinking Water Quality OperationalMonitoring Plan 2008 – 2009). Having formal requirements for operational monitoring is important and consistent with therequirements of the ADWG Framework (and particularly the principles of the Hazard Analysis and Critical Control Point(HACCP) methodology that underpins the ADWG). It is the operational monitoring that provides a high level of confidencethat treatment systems (such as disinfection) are operating correctly and that the quality of the treated water will comply withthe requirements of the ADWG.




3.2.1(f) Be undertaken for theperiod from theCommencement Date to 30June 2006 and after that foreach subsequent financialyear.

As for 3.2.1. Full compliance As for 3.2.1. The monitoring has been undertaken in accordance with the Plan.

3.2.2 The sampling frequencyand the locations chosenfor the monitoring should besuch that the results arerepresentative of the qualityof water supplied toCustomers.

This presents amoderate risk. Itrelates to thesampling andanalysis forverification, anddoes not relatedirectly to theachievement ofwater quality.

Full compliance Sampling frequency andlocations are consistentwith ADWG guidelines,including a detailed reviewand verification of selecteddatasets to confirm thatthe frequency of samplingand locations for aselected period.

The selection of locations is outlined in the Monitoring Plan and Standard Administrative Procedure WPIMS 5193, and thefrequency of sampling and analysis is detailed in the Monitoring Plan. The auditor undertook checks of the provisions in thePlan and the full dataset of monitoring results for October 2009, and confirmed that the sampling frequency and locationschosen are consistent with the requirements.

3.3 Drinking Water Quality – Reporting

3.3.1 Sydney Water mustproduce a quarterly reportthat includes the waterquality monitoring testresults undertaken inaccordance with clause 3.2.The quarterly report mustbe placed on its website onthe internet and also madeavailable for access by anyperson, free of any chargesimposed by Sydney Water.

As for 3.2.1. Full compliance Evidence that the reporthas been prepared anddisseminated as required,including a detailed reviewof selected datasetsverifying that the reportedresults accord with thosereported by the laboratory.

Sydney Water produces a quarterly report of all monitoring test results undertaken in accordance with the Drinking WaterQuality Monitoring Plan and makes it available, to the public, on the Sydney Water website.




3.3.2 Sydney Water must provideto NSW Health a copy ofthe report compiled tocomply with clause 3.3.1. Ifthe results do not complywith the Health guidelinevalues or the Aestheticguideline values for pH,true colour, turbidity,aluminium, iron and zinc,Sydney Water must provideNSW Health with anappraisal of theinconsistency, and indicateaction to be taken toresolve any noncompliance.

[Note: The requirement forquarterly reporting ofmonitoring results is alsofound in the Memorandumof understanding betweenNSW Health and SydneyWater, November 2000.]

As for 3.2.1. Full compliance Evidence that the reporthas been provided to NSWHealth as required,including a detailed reviewof selected datasets toconfirm that exceedancesare reported to NSWHealth as required.

Sydney Water provided a copy of the reports compiled under Clause 3.3.1 to NSW Health as agreed in the Memorandum ofUnderstanding (MOU) between NSW Health and Sydney Water, February 2006. The reports included an evaluation of theresults on an exception basis as required in the MOU.

Where exceptions occurred and this constituted an incident, the information on reporting provided by Sydney Waterindicated that NSW Health was advised until the issue was resolved. Further observations regarding the notification ofincidents are included under clause 3.5.1.

3.3.3 Sydney Water must complywith requests by NSWHealth to provide additionalinformation on waterquality. The additionalinformation provided underthis clause is to conform tothe manner and formspecified by NSW Health.

[Note: Under section 10Hof the Public Health Act1991 the Director Generalof NSW Health may requireSydney Water to producecertain information.]

As for 3.2.1. Full compliance Evidence that any NSWHealth requests have beencomplied with.

Sydney Water advises that no additional information was requested by NSW Health.




3.4 Drinking Water – Planning

3.4.4 Sydney Water mustprepare, and makeavailable to NSW Health by1 October each year, anannual report on theimplementation of the FiveYear Plan. The report mustinclude details of:

This presents ahigh risk. Failure toimplement the Plancould lead tofailures in waterquality and seriousand widespreadhealth effects.

Full compliance Existence of an annualreport on theimplementation of thePlan.

A report titled 2007-2008 Annual Report - Implementation of the Five-Year Drinking Water Quality Management plan 2005-2010 was prepared and provided to NSW Health on 25 September 2008. A receipt issued by NSW Health dated 29September 2008 was sighted.

3.4.4 (a) Any proposed amendmentsto the Five Year Planneeded to protect publichealth or to ensure theeffective operation of thePlan.

As for 3.4.4. Full compliance Evidence that therecommendations ofprevious implementationreports and incidents areincluded in the Plan.

The Annual Report proposes an amendment to Section 7.9 of the Five Year Plan to better reflect Sydney Water’s currentposition on blue green algae, as a result of a persistent algal bloom in Warragamba Reservoir. This had been flagged bySydney Water during the previous audit.

3.4.4 (b) Any additional water qualityimprovement actionsidentified in the precedingyear through the Drinkingwater quality monitoringdata or by NSW Health andaction taken to implementthem.

As for 3.4.4. Full compliance As 3.4.4 (a) The Annual Report identifies improvements that will be implemented to ensure good water quality and the actions taken toimplement them. The Annual Report has structured the outline of these improvements in terms of the 12-element ADWGFramework, consistent with the requirements of clauses 3.1.3 and 3.2.1 (b).

A previous audit recommended that the Annual Report include a table outlining whether planned actions have beencompleted or not; the Annual Report includes as Appendix 1 a comprehensive table that provides this information for some178 items to the period July 2008. The table indicates that the great majority of actions have been completed or areunderway. A few have not been completed and the reasons are given. The reasons given include a conclusion that furtherevaluation has shown the level of risk to be acceptable; a cost/benefit analysis has concluded that the works were notjustified, and in two cases the works were “deferred”.

The information provided indicates that Sydney Water is undertaking a comprehensive program of water qualityimprovement on an ongoing basis




3.5 Drinking Water – Incident Management

3.5.1 Sydney Water mustimmediately report to NSWHealth any information orevent in the delivery of theServices or in its systemsor operations which mayhave risks for public health

This presents ahigh risk. Failure toreport to andinvolve NSW Healthcould lead to aserious concernand possiblyserious andwidespread healtheffects.

Full compliance Evidence that incidentsand events are reported assoon as practicable toNSW Health.

Observations by the auditor over several years indicate that there is free exchange of information between Sydney Waterand NSW Health on system performance and water quality and on exceptions/incidents/events. Information related to thelatter is shared via the Water Quality On-line Incident Notification System.

Drinking water quality event management is managed under SOP WPIMS5228; the current revision was dated 14 May2009, and is up to date. It was recorded that NSW Health had reviewed and endorsed the SOP and related forms on 30June 2009.

There have been a number of incidents and these are listed as notifiable incidents and events in the Quarterly Reports onDrinking Water Quality that are submitted to NSW Health. The terminology used refers to “incidents” as those that affectcompliance and “events” as those that do not affect compliance. The two treated water Cryptosporidium events are ofparticular note and NSW Health was notified in accordance with the requirements.

The listings in the Quarterly Reports include the notification of the detection of a single Giardia cyst in the raw water to

North Richmond WFP, but other detections of Cryptosporidium or Giardia in the raw water to WFPs are have not been

notified. This apparent inconsistency arises because Sydney Water is only responsible for monitoring and reporting onthe raw water that supplies the North Richmond WFP ie water taken from the Hawkesbury Nepean River. The Sydney

Catchment Authority (SCA) supplies all other raw water and is responsible for the monitoring and reporting of thesewaters. Sydney Water advises that if Cryptosporidium and Giardia are detected in the raw waters supplied by SCA then

these detections are reported by the SCA via the online notification system using the same trigger levels. The auditorconcludes that the reporting of notifications of both Cryptosporidium and Giardia is consistent.

Drinking Water Quality Event Management SOP (WPIMS5228) states that for either Cryptosporidium or Giardia “any testresult in raw or treated water > 0 oocysts” (or cyst for Giardia) is a notifiable event to NSW Health”, and hence it isappropriate that the detections are notified to NSW Health. The auditor notes that this is a more precautionary requirementthan the general requirement of the MOU that states that Sydney Water shall immediately report to NSW Health anyinformation or event within its drinking water supply system, which may adversely affect public health, SOP WPIMS5228defines drinking water quality events to include the situation where “highly contaminated raw water that cannot beadequately treated by WFP”. The detection of a single Giardia cyst in the raw water to North Richmond WFP would seem tobe a minor excursion and not one that would be likely to adversely affect public health.

The auditor queried the basis for requiring the notification of minor detections of protozoa in the raw water. Sydney Wateradvised that the Cryptosporidium and Giardia monitoring program was reviewed in 2005 and the proposed changes to themonitoring program are currently being reviewed and will focus on testing to improve knowledge of catchment sources andrevised triggers. A report including recommendations is due for completion in late 2009. In addition to the quarterlyreporting, a summary for the previous year and the status of events and incidents is provided in the Annual Report on theImplementation of the Five Year Drinking Water Quality Management Plan.

The auditor concludes that the requirement of this clause has been complied with.




3.5.2 From the CommencementDate, Sydney Water mustmaintain the existingDrinking water qualityincident management plan(incident plan) prepared tothe satisfaction of NSWHealth and that incidentplan must remain in placeuntil any new plan isdeveloped in agreementwith NSW Health.

As 3.5.1. Full compliance Evidence that the IncidentManagement Plan hasbeen maintained.

Information relating to this clause is noted under 3.5.1. It is concluded that Sydney Water is maintaining the Plan to thesatisfaction of NSW Health and that the requirements are being complied with.

The auditor notes that amendments have been included to reflect the findings of the management of an algal event inSeptember 2007, providing evidence that the Plan is being maintained.

3.5.3 The Incident Plan mustcontain, or incorporate byreference, procedures andprotocols for thecoordinated managementof Drinking water incidentsincluding media andstakeholder liaison and anynotification to Consumers ofpublic health advicereceived from NSW Health.

As 3.5.1. Full compliance The Incident Plan containsor refers to requiredprocedures and protocols.

As noted under 3.5.1, drinking water quality event management is managed under SOP WPIMS5228. This Procedureincludes a Response Protocol, a responsibility matrix that lists responsibilities and contacts, references and where currentsupporting documents can be obtained (generally this is via the Sydney Water ConnectNet intranet system).

3.5.4 In preparing the IncidentPlan under clause 3.5.2,Sydney Water must haveregard to the concepts ofgood practice set out in theAustralian Drinking WaterGuidelines 1996 and mustapply these concepts in themanner, form andtimeframes specified byNSW Health.

As 3.5.1. Full compliance Evidence that the Plan hasbeen prepared inaccordance with therequirements.

A review of the plan by the auditor indicates that it includes provisions consistent with the requirements of the ADWG.




3.6 Other grades of water

3.6.1 Other grades of watersupplied by Sydney Watermust be supplied accordingto relevant guidelinesspecified by NSW Health,DEC, DIPNR and theDepartment of PrimaryIndustries.

This presents ahigh risk. Failure tocomply with therelevant guidelinescould lead toserious healtheffects.

Full compliance Reports on the results ofsampling and analysis thatverify that the guidelinerequirements have beenmet.

Sydney Water supplies three other types of other water: residential supply (e.g. Rouse Hill Recycled Water Scheme),industrial supply (e.g. the Wollongong Recycled Water Scheme (BlueScope Steel and Port Kembla Coal Terminal)), andirrigation supply (e.g. 14 golf course and playing field irrigation schemes). Reuse of effluent also occurs at Sydney Water’sSTPs, although this reuse is not considered under this clause. The schemes are being expanded and extended to includefurther dual reticulation schemes, agricultural and irrigation, and direct potable replacement.

In terms of guidelines, Sydney Water has the objective of complying with the minimum requirements outlined in relevantState or National guidelines for specific end uses of recycled water and has particularly considered:

NSW Recycled Water Coordination Committee "NSW Guidelines for Urban and Residential Use of Reclaimed Water" 1st

Edition, May 1993 (for example, for Rouse Hill Recycled Water Scheme);

National Water Quality Management Strategy (ARMCANZ, ANZECC, NHMRC) "Guidelines for Sewerage Systems –Use of Reclaimed Water", November 2000 e.g. for golf courses and some industrial applications;

DEC (NSW) Environmental Guidelines "Use of Effluent by Irrigation, October 2004” (for example, for golf course and

agricultural irrigation); and

Australian Guidelines for Water Recycling: Managing Health and Environmental Risks (Phase 1) 2006 (NRMMC, EPHC,AHMC).

The last of these guidelines is new and Sydney Water is working with NSW Health to implement the guidelines through afive year Recycled Water Quality Management Plan in accordance with the Australian Guidelines for Water Recycling.Towards this end, Sydney Water has:

Prepared a Recycled Water Quality Management Plan (RWQMP) for Wollongong Stage 2; this has been endorsed byNSW Health.

Prepared draft RWQMPs for Rouse Hill and Wollongong Stage 1 (BlueScope Steel); these are being reviewed by NSW

Health.

Prepared draft RWQMPs for the irrigation schemes; these are being reviewed by NSW Health.

Sydney Water advises that after finalisation and endorsement of the RWQMPs, they will be implemented. This will includepreparing and implementing risk based monitoring plans and Improvement Plans, and training of staff. The basis forvalidating the recycled water schemes will be agreed with NSW Health.

Until these RWQMPs are completed and implemented, the monitoring requirements and guideline levels outlined in the firstthree of these guidelines are considered for compliance purposes.

The previous Operational Audits reviewed the systems that Sydney Water has in place to assure performance of its supplyof ‘Other grades of water’ and concluded that management of the supply of recycled water is being carried out inaccordance with good management principles. Sydney Water has implemented a Water Product Management System anda Monitoring Process Management System that comply with the requirements of ISO 9001:2000. The systems wereindependently audited in November 2008 and full compliance with ISO9001 was achieved. Information was sighted thatindicates that similar monitoring practices to those used for monitoring drinking water are adopted, including the use oflaboratories with a current NATA accreditation for the analyses carried out, and Quality Assurance.




In 2008/09, the monitoring data tabulated in the Annual Compliance Reports showed:

100% compliance for the irrigation and agricultural schemes;

100% compliance for the Wollongong schemes; and

100% compliance for the Rouse Hill scheme.

In assessing compliance, the auditor notes:

For the irrigation schemes, the microbiological quality was good and in full compliance. There were some cases where

there was a minor exceedance of a target, such as TDS, (caused by the salinity of the effluent, and not resulting from adeficiency in the treatment process) and which would not be expected to cause the effluent to be unacceptable; For thepurposes of this audit these have not been taken to constitute non-compliance.

For the Wollongong Port Kembla Coal Terminal, microbiological quality was good and in full compliance, indicatingadequate treatment and disinfection. Testing for free chlorine reported concentrations somewhat below the target value;however, Sydney Water advises that the requirement for chlorine residual is a customer requirement for control of

biofilm growth in the customer’s pipe network and is not a health compliance limit and does not constitute a non-compliance. Sydney Water advises that the chlorine residual was lower that the customer requirement due to lowsporadic customer demand.

For the Wollongong BlueScope Steel supply, the monitoring results were reviewed and were found to be in full

compliance. There were two incidents involving detection of viruses; in each case investigation confirmed that controlsin place were deemed effective and the system was assessed as low risk and full compliance was demonstrated asagreed by NSW Health. Resampling results showed viruses were absent.

For the Rouse Hill scheme, the microbiological quality was good and in full compliance. There was one event whereviruses were measured in the recycled water. NSW Health was notified and resampling did not detect viruses. It wasconcluded that this did not represent non-compliance.

The occurrence of cross connections between potable water and recycled water in customer’s premises has been asignificant issue in previous years for the Rouse Hill scheme, and has led to checking of all premises to ensure that thereare no cross connections. In 2008/09 there were two incidents involving a cross connection between the recycled watersystem and potable supply system. These were assessed and it was confirmed that the water was not subject toconsumption and that the risk was ranked as low. The auditor reviewed complaints logged for the Rouse Hill system, andconfirmed that these were followed through, resolved and closed off.

In terms of assessing compliance, Sydney Water and NSW Health have discussed at a Joint Operational Group meeting(12 May 2009) the issue of whether the detection of Cryptosporidium in inactive form (e.g. after UV treatment) mightconstitute a non-compliance. This followed an incident in March 2009 in which Cryptosporidium and Giardia were detectedin recycled water at Rouse Hill. NSW Health has confirmed that where the cysts are inactive, then their presence does notconstitute a non-compliance.


4. Licence Part 4 - Infrastructure Performance


Part 4 of the Operating Licence requires Sydney Water to provide specific levels ofservice to its customers for delivery of water supply and sewerage services. Theselevels of service are defined by the water pressure, water continuity and sewage

overflow standards documented in Clauses 4.1, 4.2 and 4.3 (respectively) of theLicence.

For the purpose of the Risk Based Audit, Licence clauses 4.4, 4.7.1, 4.7.3, 4.8a, 4.9.2,

4.11 to 4.13 and 4.14.1 are subject to a detailed audit by GHD. The remaining clausesfor Part 4 of the Licence do not form part of this report.

4.2 Infrastructure Performance – Compliance

Compliance for Part 4, Infrastructure Performance, is outlined in Table 4.

Sydney Water exhibited Full compliance with all auditable requirements of this part ofthe Licence.

4.3 Discussion

Full compliance was achieved with this part of the Licence, including all clauses

pertaining to leakage and the priority sewerage program, both of which had targetedperformance compliance dates in 2008/09.

Sydney Water demonstrated that its approach to meeting Licence obligations is

founded in achieving sustained performance by implementation of operational andmaintenance activities within the context of a whole of business asset and riskmanagement framework.

The only issue of concern identified is with the design demand rate for water supply.As a result of the significant changes in customer demand on the system that haveoccurred due to impacts of the recent drought, restrictions and Government policy

initiatives, the approach of using a statistical analysis of historical demand to forecastfuture demand has been identified as no longer the best approach for sizinginfrastructure. Since there is limited information available to establish the new demand

paradigm using these techniques, Sydney Water has now adopted an approach basedon first principles for estimating demand and for sizing its water infrastructure. . Therewas no evidence that statistical validity or uncertainty had been accounted for. Given

the lack of information on many of the drivers of these changes – such as thepermanence of changes in customer behaviour - it is clear that this approach couldpotentially lead to inappropriate sizing of the water supply system and hence

unwarranted or inappropriate capital expenditure. This could lead to a breach of


Section 14.1 of the Sydney Water Act with respect to efficient service delivery due tooversizing or inability to service customers due to undersizing.

It is worthy of note that, despite Sydney Water’s concerns expressed to the auditor

during the 2005/06 and 2006/07 audits with respect to achieving the leakage target of105 Ml/d, it has achieved this target a year earlier than required. This should not beviewed as an incentive to set a more stringent target in the future, bearing in mind the

economic level of water leakage from the system.

4.4 Factors Affecting Compliance

The 2008/09 year has presented a more favourable operating regime than in recentyears for infrastructure subject to this part of the Licence. In particular higher rainfall

occurred and hence a reduction in potential for tree root intrusion into sewer mains.Mandatory restrictions on water usage have continued from previous years, providing afavourable operating regime for meeting the water pressure standard.

4.5 Recommendations


It is recommended that Sydney Water should:

R 4.1 report to IPART by 30 June 2010 its validation, sensitivity and riskanalyses undertaken in support of the new design demands and howthese changes are impacting on future Licence compliance andexpenditure.



There are no secondary recommendations required to ensure Sydney Water’scompliance with Part 4.




Findings – including addressing the risks and factors affectingcompliance

4.1 Water Pressure Standard

4.1.1 Sydney Water must comply with thewater pressure standard in clause 4.1.1

Type of Risk

Non-compliance with supply reliability

Non-compliance with consumerprotection

Likely Consequence

Disruptions to supplies, insufficientsupplies

Inadequate pressure for fire fighting andhence increased probability of loss of lifeand/or property

Contamination through backflow

Customer Service Levels not met

Full compliance No more than 15,000properties experience awater pressure failure in afinancial year.

Sydney Water had 1 093 properties experience a water pressure failurein 2008/09.

Only 52 properties were affected by non-operational problems.

Of the 1 041 properties affected by operational problems, 950 were dueto one system failure (731) and one maintenance related reconfiguration(219).

Sydney Water has a sound long term strategy for the elimination ofsystemic low pressure supply to customers and has in place soundprocesses and practices for managing operational problems.

4.2 Water Continuity Standard

4.2.1 Sydney Water must comply with thewater continuity standard in clause 4.2.1

Type of Risk



Likely Consequence


No supply for fire fighting and henceincreased probability of loss of life and/orproperty


Annoyance of customers

Full compliance Sydney Water must ensurethat no more than 32,000properties experience aPlanned Water Interruptionexceeding 5 hours in afinancial year.

Sydney Water had 10 923 properties experience a planned interruptionexceeding 5 hours in 2008/09. This is approximately a third of therequired standard and therefore an excellent result.

These interruptions were as a result of 113 events (compared with 16576 properties and 138 events in 2007/08).

It is also noted that while the whole reticulation network has beensurveyed since the program inception, 21 021km of mains wereinspected under the active leak detection program (an additional1 521km of mains compared with 2007/08) and renewals reduced by18.1 km to 119.8km for reticulation mains and 3.9km of trunk mains to9.9km.

The reduction in prolonged planned outages may be attributed to acombination of the sustained leak detection and renewal programs of thelast several years and improved operational and maintenance planning.This measure is also influenced by the annual planned/unplannedworkloads (there has been an increase in the number of unplannedevents in 2008/09) and can be subject to ‘gaming’. Ongoing trendanalysis and monitoring of supporting indicators in future years willconfirm the sustainability of the improvement in performance. See alsocommentary with respect to Clauses 4.8 and 4.9.




4.2.1 Sydney Water must comply with thewater continuity standard in clause 4.2.1

Type of Risk



Likely Consequence


No supply for fire fighting and henceincreased probability of loss of life and/orproperty


Annoyance of customers

Full compliance Sydney Water must ensurethat no more than 35,000properties experience anUnplanned WaterInterruption exceeding 5hours in a financial year.

Sydney Water had 25 656 properties experience an unplannedinterruption exceeding 5 hours in 2008/09. This is approximately 70% ofthe required standard and given:

the significant reduction from the 31 982 in 2007/08

the increase in the frequency of main breaks from 27.78 to29.19/100km water mains;

this is also an excellent result.

Improvements in performance can be attributed to active leak detection,the renewal program and improved operational and maintenanceplanning as noted above. Ongoing trend analysis and monitoring ofsupporting indicators in future years will confirm the sustainability of theimprovement in performance. See also commentary with respect toClauses 4.8 and 4.9.

4.3 Sewage Overflows on Private Property Standard

4.3.1. Sydney Water must comply with thesewage overflow standard in clause4.3.1.

Type of Risk


Non-compliance with legislation/licence

Likely Consequence


Breach of Environmental Acts andregulations

Exposure of public to raw sewage

Public health and safety concerns

Increased probability of loss of life and/orproperty

Adverse impact on public perception

Full compliance No more than 25,000Properties (other thanPublic Properties)experience an UncontrolledSewage Overflow in dryweather in a financial year.

Sydney Water had 16 028 properties affected by a sewage overflow in2008/09.

This is further improvement on last year’s result of 18 148, the lowestresult for five years, and possible confirmation of the sustainedturnaround in performance mooted in last year’s audit report.

The supporting indicators also show a reduction in repeat events. Thatsaid, higher rainfall was experienced and some of the reduction is alsoattributed to this as evidenced by the reduction in all measures bar one(number of private properties experiencing sewage overflow events on 3or more occasions).




4.7 Service quality and system performance indicators

4.7.1 Sydney Water must maintain recordsystems that are sufficient to enable it tomeasure accurately its performanceagainst the service quality and systemperformance indicators in Schedule 1.

Type of Risk


Likely Consequence


Inadvertent breach of acts andregulations

Provision of incorrect information onperformance


Potential errors in cost/benefit and riskbased decision making.

Full compliance Sydney Water has asystem for datamanagement with adocumented set ofprocesses and practicesincluding appropriatequality assurancepractices.

Sydney Water provided documentation that demonstrated appropriatedata management processes and practices and quality assuranceprocesses.

4.7.3 By 1 September 2006 and at the sametime in each subsequent year, SydneyWater must report to IPART itsperformance against the service qualityand system performance indicators inSchedule 1 for the immediatelypreceding financial year. The report mustinclude an analysis of any problems of asystemic nature.

Type of Risk


Likely Consequence

Failure to predict deteriorating trends inperformance within sufficient time toactivate responses.

Full compliance Evidence of analysis andresults and active responseto issues identified.

Sydney Water provided the Report on system performance. The reportincorporated trend analyses of performance and linked the performancedirectly to either activities being undertaken or environmental factors.

4.8 Asset Management Obligation

4.8 (a) recognises that the ability to meet licenceobligations is linked to the medium tolong-term strategy and tactics in the AMPlan and not subject to minor annualoperational or maintenance adjustmentswithout context.

Type of Risk


Inappropriate allocation of resources

Likely Consequence

Inappropriate allocation of resources tooptimise life-cycle cost of delivering therequired service to customers

Full compliance Evidence to verify that theAM Plan and associatedprocesses and practicesincorporate level of servicetargets that are inalignment with the Licenceobligation.

A review of Sydney Water’s asset management planning and associatedprocesses and practices demonstrated a good level of alignment withthe Licence obligations with exception of the uncertainty of theappropriateness of the new practices associated with the setting of peakdemand design loads for water supply. This uncertainty is not due toany perceived deficiency in Sydney Water’s approach, but is associatedwith a lack of available data. This lack of data will only be rectifiedthrough the passage of time and the new customer demand patternsbecome established.

Given the high consequence of inappropriate sizing of infrastructure,ongoing verification of the basis or context of the design rules adoptedshould be consistent with current industry practice and provideconfidence that the systems are not being under or overdesigned tocater for peak customer demand within foreseeable return periods.





4.9.2 The report must include the followingmatters:

(a) a description of the processes,practices, systems and plans SydneyWater uses in managing the Assets;

(b) a description of each group of Assets;

(c) an assessment of the expectedcapability of the Assets to deliver theServices and meet the existingobligations consistent with this Licence,the Customer Contract and all applicablelaws with which Sydney Water mustcomply;

(d) an assessment of the major issues orconstraints on current and futureperformance of the Assets;

(e) the strategies and expected costs offuture investment in Assets;

(f) progress in implementing themanagement of Sydney Water’s Assetsand any recommended improvements inprocesses, practices, systems and plansfor the management of the Assets; and

(g) such other matters reasonablyrequired by IPART.

Type of Risk



Likely Consequence

Inappropriate allocation of resources tooptimise life-cycle cost of delivering therequired service to customers

Full compliance Evidence that:

The matters have beenaddressed in planning.

The plans have been

implemented.

The auditor requested provision of a (sample) vertical slice of assetmanagement plans and associated documentation for provision of asewage service to Sydney Water customers.

Sydney Water provided this documentation and it is the auditor’s opinionthat Sydney Water has implemented a fully integrated approach todelivery of services from business strategy to practical delivery of serviceto the customer.




4.11 Water Leakage

4.11.1 Sydney Water must ensure that by 30June 2009, the amount of Water leakagefrom its Drinking water supply systemdoes not exceed 105 megalitres a day.

Decision of Delegated Tribunal of 26 May2009 that 105 ±16 ML/day constitutescompliance

IPART notes that the inherent errors inleakage calculations are significant andrequire considerable interpretation andapplication of broad rangingassumptions. With respect to the largeerror bands associated with leakageestimation, the auditor needs to form anopinion whether these errors aresystematic in nature and not random. i.e.all things being equal at this macro level,the error attributable to one source oranother are likely to be of the samemagnitude and sign from one year to thenext. This means that while the actualvalue reported may be uncertain, thevalidity of the trend line in performanceneeds to be separately evaluated.

Type of Risk


Resource deficiency/ shortage


Likely Consequence

Early or inappropriate augmentation ofassets to increase availability of sourcewater.

Unnecessary increase in cost tocustomer.

Unnecessary constraints on customerusage.

Full compliance Stated target met(recognising the inherentpotential errors in theestimation/ calculation ofthe leakage rate).

Sydney Water provided details of its analysis, associated activities beingundertaken to achieve the target and its programs for achieving ongoingcompliance in the future.

It is the auditor’s opinion that Sydney Water has successfully compliedwith the Licence requirement and will continue to do so into the future.

Further, the processes used to estimate leakage are best appropriatepractice and the auditor supports the recognition by IPART of theuncertainty of the estimation and IPART’s approach to managing thisissue.

4.11.2 Each year Sydney Water must calculatethe level of Water leakage from itsDrinking water supply system using theassumptions and methodology approvedby IPART.

Type of Risk


Likely Consequence

Inability to reliably assess SydneyWater’s performance relative to bestappropriate practice or its trend inperformance over time.

As for 4.11.1

Full compliance Demonstration ofcompliance withassumptions andmethodology approved byIPART

The methodology applied is in accordance with IPART’s approvedmethodology.




On 1 September 2006 and at the sametime in each subsequent year, SydneyWater must report to IPART on:

(a) the economic level of Water leakagefor the preceding financial year and howthat level of Water leakage is calculated;and

(b) its assessment of its progresstowards compliance with clause 4.11.1

Type of Risk

Resource deficiency/ shortage


Likely Consequence




Full compliance Provision of the Report The Report was provided by Sydney Water including a description ofmethodology as required.

Compliance with 4.11.1 was achieved

4.12 Reports related to water leakage

4.12.1 Sydney Water must report to IPART nolater than 1 September 2005 and at thesame time in each subsequent year onthe number of bulk water meters inSydney Water’s Drinking water systemthat Sydney Water:

(a) intends to install in the current andsubsequent financial years; and

(b) had planned to install in a financialyear compared with the number actuallyinstalled in that financial year.

Type of Risk


Likely Consequence

Inability to reliably report onperformance.

Inability to understand its systems andidentify ongoing opportunities forsustained improvement.

Full compliance Stated response target met The report was provided by Sydney Water.

4.12.2 Sydney Water must report to IPART nolater than 1 September 2005 and at thesame time in each subsequent year onthe number of water pressure controlzones in Sydney Water’s Drinking watersystem that Sydney Water:

(a) intends to complete in the current andsubsequent financial years; and

(b) had planned to complete in a financialyear compared with the number actuallycompleted in that financial year.

Type of Risk


Resource management

Likely Consequence




Full compliance Stated response target met Report provided. Sydney Water has adopted a systematic investigationand implementation of pressure control zones across its supply systems.




4.12.3 On 1 September 2005, and on 1September of each subsequent year,Sydney Water must report to IPART onthe number of bursts, breaks or leaks (inthe trunk and reticulation component ofSydney Water’s Drinking water systembetween water treatment plants and aProperty) which occurred in theimmediately preceding financial year andthe time taken by it to repair those bursts,breaks or leaks.

Type of Risk


Licence conditions not fully met

Likely Consequence

Breach of Licence Condition


Full compliance Report provided by duedate

The report was provided by Sydney Water to IPART by 1 September2008 and 1 September 2009

A slight increase in the number of bursts, breaks and leaks was recordedfor 2008/09 (14 050 compared with 13 408 for 2007/08). Despite thisincrease, Sydney Water generally maintained or improved itsperformance in restoring service to customers.

The increase corresponds to a slight reduction in planned maintenancetasks for 2008/09 and is an appropriate management tool/balancingactivity for maintenance resources.

4.12.4 Sydney Water must report to IPART, nolater than 1 September 2005 and at thesame time in each subsequent year, on:

(a) the number of kilometres ofreticulation mains it inspected during thepreceding financial year for Waterleakage; and

(b) its program during the precedingfinancial year for inspecting reservoirzones for Water leakage and forrehabilitating reservoir zones to preventor correct Water leakage.

Type of Risk


Likely Consequence


Excessive loss of water


Full compliance Report provided by duedate

The report was provided by Sydney Water to IPART by 1 September2008 and 1 September 2009

There was an increase in inspections and a reduction in renewals .These figures are indicative of improved efficiency in inspection andpossibly a lifting of general asset quality as a result of the existence ofthese programs over a number of years.

4.13 Response time for Water main breaks

4.13.1 Sydney Water’s response to water mainbreaks and leaks (in the trunk andreticulation components of SydneyWater’s drinking water system betweenwater treatment plants and a property),as measured from the time SydneyWater receives notification of a break orleak to the time Sydney Water stops theloss of water, shall be as follows:

(a) Priority 6 breaks/leaks: 70% of jobswithin 2 hours 90% of jobs within 3 hours

(b) Priority 5 breaks/leaks: 65% of jobswithin 3 hours 85% of jobs within 6 hours

(c) Priority 4 breaks/leaks: 50% of jobsby end of next working day 100% of jobswithin 5 days, subject to clause 4.13.4

Type of Risk


Likely Consequence


Excessive loss of water



Full compliance Stated response targetsmet

Sydney Water met or exceeded all targets with the exception of the100% target for Priority 4 events restored in less than or equal to 5 days.This last target is recognised as being unrealistic from a practicalperspective and it is the auditor’s opinion that Sydney Water ‘complied’with the intent of the Clause (i.e. achieving efficient and effectivemanagement of leakage from the system). The explanations for thoseevents that were non compliant are, in the auditors opinion, reasonable.

It is noted that Sydney Water achieved an improvement in performanceagainst response times with the exception of the response time forPriority 6 events less than or equal to 3 hrs. This was a result of thetakeover of a remote substandard supply area. Evidence provided bySydney Water indicates that even better performance would have beenachieved if the failures that occurred in this ‘new’ area of responsibilitywere not included in the statistics for all Priority 6 events.




4.13.3 On 1 September 2006, and on 1September of each subsequent year,Sydney Water must report to the Ministerand IPART on the number of breaks orleaks (in the trunk and reticulationcomponents of Sydney Water’s drinkingwater system between water treatmentplants and a property) which occurred inthe immediately preceding financial yearand Sydney Water’s performance againstthe targets in clause 4.13.1. The Ministerfrom time to time may adjust targetsbased on Sydney Water’s performance.

Type of Risk



Likely Consequence

Breach of Licence condition

Full compliance Report provided by 1September

The Report was provided to IPART by 1 September 2008 and 1September 2009. No adjustments in targets were made by the Minister.

4.13.4 Due to operational, planning andcustomer impact issues, it is recognisedthat Sydney Water will not be able torespond to 100% of priority 4 jobs within5 days. Therefore Sydney Water shallannually submit to IPART a list of allinstances of non-compliance with theabove target and the reasons for thatnon-compliance. This will be reviewed aspart of the annual operational audit.

Type of Risk



Likely Consequence


Full compliance Stated response target metwith analysis of reasons fornon-compliance orbackground/ contextualissues related to the resultachieved.

Sydney Water provided the reasons in all instances of non-compliance.See 4.13.1

4.14 Priority Sewerage

4.14.1 Sydney Water must meet the followingrequirements in relation to the “PrioritySewerage Program”:

4.14.1 (a) (a) By 30 June 2009 connection shall bemade available to all lots eligible forconnection under Stage 1 PrioritySewerage Program, excluding those lotsin the area of Menangle/Menangle Park;

Type of Risk



Likely Consequence


Sustained environmental degradation

Full compliance Sewer systems operationaland service available tocustomers for connection

Information was provided by Sydney Water including sample publicnotifications of work completion, network plans and commissioningdocumentation that demonstrated completion of the works required by30 June 2009.




4.14.1 (c) (c) By 30 June 2009 work shall becommenced which, when completed, willpermit connection to be made availableto at least 30% of lots eligible forconnection under Stage 2 PrioritySewerage Program and including thoselots which are situated in areas adjacentto World Heritage areas.

Type of Risk



Likely Consequence



Full compliance Start of systemconstruction by 30 June2009

Information was provided including sample public notifications ofconstruction commencement, construction progress reports and targetcompletion dates that demonstrated commencement of the worksrequired prior to 30 June 2009.

4.14.2 Should Sydney Water incur delayscaused by consent authorities that impairits ability to meet the above targets,Sydney Water is required to write to theMinister for Energy and Utilities, toadvise the Minister of the reasons for thedelay.

Type of Risk



Likely Consequence



No requirement Report provided to theminister if required

No planning consent delays were experienced and so a report was notrequired

4.14.3 On 1 September 2006 and at the sametime in each subsequent year SydneyWater must report to IPART on itsassessment of its progress towardscompliance with clause 4.14.1 and thereasons which lead it to reasonablybelieve that (as at the date of its report) itwill or will not be able to comply withclause 4.14.1.

Type of Risk



Likely Consequence


Full compliance Report provided by 1September

The report on PSP (Priority Sewage Program) was included in the2008/09 Operating Licence Compliance Report provided to IPART by 1September 2009.


5. Licence Part 5 – Customer and Consumer Rights


Part 5 of the Operating Licence requires Sydney Water to provide adequate customerservice and hence fulfil its obligations to its customers and consumers. This is to alsoensure that Sydney Water customers’ rights to water and wastewater services are

adequately provided for and managed.

For the purposes of the audit, Licence Clauses 5.5.1, 5.5.2 and 5.5.3 are subject todetailed audit by GHD. The remaining clauses for Part 5 of the Licence were subject to

Statements of Compliance by Sydney Water, the assessment of which does not formpart of this report.

The compliance of Sydney Water was assessed within the context of the risk posed by

failure to comply with the relevant requirements of the Licence clauses.

5.2 Customer and Consumer Rights – Compliance

Compliance for Part 5, Customer and Consumer Rights, is outlined in Table 5 below.

Sydney Water exhibited Full compliance with the requirements of this part of the

Licence.

5.3 Discussion

The Customer Service Indicators contains a number of subclauses, which outline the

Schedule of Customer Service Indicators to be reported, how Sydney Water’s

performance is to be reported and how this performance report is made available toIPART.

Sydney Water has established procedures and systems to gather data on customer

complaints and performance against customer service indicators. This system includesan appropriate quality assurance process.

The analysis of Sydney Water’s performance against the indicators identified several

opportunities for improvement in Sydney Water operations that, while not required forLicence compliance, will improve efficiency and effectiveness of service delivery.

In complying with this Licence clause, Sydney Water reported increased complaints

related to billing. This was attributed to the performance of the water meter readingcontractor, following the change in contractor in October 2007. During the auditinterview, Sydney Water provided the following information about this matter:


In October 2007, a single contractor took over the meter reading contract, whichpreviously had been undertaken by two contractors.

Staff were expected to transfer from the former meter reading contractor, however

no staff joined the new contractor and new meter reading staff were required to berecruited. Local knowledge about meter location and access was lost and new stafftook time to develop competence in reading meters.

High turnover of meter reading staff contributed to poor performance.

The contractor subcontracted another company to assist with meter reading anddid not adequately train these staff.

Sydney Water has maintained close supervision of performance levels of thecontractor and advised that the contractor performance has significantly improved.

Sydney Water noted that in the final quarter of 2008/09 the contractor reported thelowest level of meters unable to be read since the commencement of the contract.

Sydney Water also reported issues with chemical supplies for treatment of sewageodours and demonstrated an appropriate management plan for preventing recurrence.

There has also been a sustained growth in customer contacts with regard toaffordability of customer charges. It is likely this is tied to the current difficult economicconditions.


There were no significant factors affecting compliance with the requirements of thispart of the Licence.

5.5 Recommendations



with Part 5 of the Licence.



SR6.1 Consider extending the contract duration for water meter reading to

three years to improve meter reading performance.

SR6.2 Maintain appropriate odour management capability by seeking

alternative suppliers of odour treatment chemicals and put in placetested contingency/business continuity plans for chemical supply.



Clause Requirement Risk Compliance Target for Full Compliance Findings – including addressing the risks and factorsaffecting compliance

5.5 Customer Service Indicators

5.5.1 Sydney Water must maintain record systems thatare sufficient to enable it to measure accurately itsperformance against the Customer serviceindicators (CSI) set out in Schedule 2

Type of risk:

Low data quality

Likely consequence:

Unable to reliably measureperformance

Full compliance Maintenance of appropriaterecord systems

Procedures and systems are in place to capture data oncomplaints and to track responses. Training is provided to callcentre staff on recording and classification of complaints. TheRegulatory Compliance Unit conducts routine analysis andinternal reporting of complaints data.

Complaints have increased as a result of changes to themeter reading contract in October 2007.

5.5.2 By no later than 1 September 2006 and at thesame time in each subsequent year, SydneyWater must report to IPART its performanceagainst the Customer service indicators inSchedule 2 for the immediately proceedingfinancial year.

Type of risk:

Report not submitted on time

Likely consequence:

Unable to reliably measureperformance

Full compliance Provision of report by 1September

The report was included in the Operating Licence ComplianceReport, which was submitted to IPART before 1 September2009.

5.5.3 The report must include an analysis of anyproblems of a systemic nature

Type of risk:

Systemic problems not assessed

Likely consequence:

Unable to assess causes ofproblems and potential forimprovement

Full compliance Analysis included in report The report provides information on responses to systemicproblems, or an explanation of causes of systemic problemsand the intended response. The majority of complaints relateto billing. The high level of these complaints is attributed tochanges in the meter reading contract leading to meterreading errors and inability to access meters. Sydney Waterhas maintained close supervision of performance levels of thecontractor and advised that the contractor performance hassignificantly improved.

Another issue identified included odour complaints as a resultof chemical supply shortages. Sydney Water providedinformation on actions to secure more reliable and/orcontingent supply arrangements.


6. Licence Part 6 – Complaint and Dispute Handling


Part 6 of the Operating Licence requires Sydney Water to have appropriate proceduresto receive and respond to complaints, and to annually report to IPART on complaintshandled.

For the purpose of the audit, Licence clause 6.1 is subject to a detailed audit by GHD.The remaining clauses for Part 6 of the Licence were subject to Statements ofCompliance by Sydney Water, the assessment of which do not form part of this report.

The compliance of Sydney Water was assessed within the context of the risk posed byfailure to comply with the relevant requirements of the Licence clauses

6.2 Complaint and Dispute Handling – Compliance

Compliance for Part 6, Complaint and Dispute handling, is outlined in Table 6 below.

Sydney Water exhibited Full compliance with the requirements of this part of theLicence.

This part of the Licence has not been subject to audit in the previous two years.

6.3 Discussion

6.3.1 Complaints Handling Procedures

Sydney Water uses two systems to register customer contacts. All complaints requiringaction by field staff are recorded in the WAMS system, other complaints are recordedin the CustomerView system. Each system allows tracking of the response to

complaints.

Routine reporting by the Regulatory Compliance Unit combines data from bothsystems. These data are also used in annual reporting to IPART.

Sydney Water intends to develop a new customer information system that will allowmore sophisticated recording and analysis of customer data, including customer dataacross properties.

In June 2009, Sydney Water undertook an assessment of its performance in managingcustomer complaints, based on customer surveys designed to address the principles ofAS ISO 10002:2006. A copy of the key outcomes was provided to the auditor.


6.4 Recommendations


There are no key recommendations required to ensure Sydney Water’s compliancewith Part 6 of the Licence.


There are no secondary recommendations required to ensure Sydney Water’scompliance with Part 6 of the Licence.





6.1.1 Sydney Water must establish and maintaininternal complaint handling procedures forreceiving, responding to and resolving complaintsby Customers and Consumers against SydneyWater.

Type of risk:

Lack of effective process

Likely consequence:

Unable to resolve complaints,leading to customer dissatisfaction

Full compliance Adequate procedures,implemented effectively withappropriate qualitymanagement/ improvementprocesses in place.

Sydney water has a customer complaints policy, within itscustomer service policy, and a documented customercomplaints procedure. These were issued in May 2008 andare due for review in May 2010

Call centre staff receive detailed training in receiving,recording and resolving complaints; all other staff are madeaware of processes for receiving and responding tocomplaints. Complaints are categorised and directed toappropriate areas for resolution.

6.1.2 The internal complaints handling procedures ofSydney Water must be based on the AustralianStandard AS4269-1995 Complaint Handling.

Type of risk:

Inappropriate design of complaintsprocedures

Likely consequence:

Unable to resolve complaints,leading to customer dissatisfactionand unnecessary escalation ofissues.

Full compliance Congruence with standardAS4269:1995 (now AS ISO10002:2006)

The complaints procedure was based on AS4269:1995. ThisStandard has been superseded by AS ISO 10002:2006.Sydney Water has reviewed the new Standard and considersthat there were no material changes to the Standard thatrequire changes to its procedures.

The auditor commends the proactive approach by SydneyWater in reviewing compliance with the new standard.

6.1.3 Sydney Water must make available to Customersand Consumers information concerning its internalcomplaints handling procedures which explainshow to make a Complaint and how the procedureworks.

Type of risk:

Failure of communication

Likely consequence:

Customer issues are likely to beexacerbated by lack of awarenessof communication options.

Full compliance Information is available inreadily accessible forms thatcater to customer need andpreferences for access to theinformation.

6.1.4 Sydney Water must provide information of thenature described in clause 6.1.3 to Customersthrough their quarterly, or other, bills at least onceannually.

Type of risk:

Failure of communication

Likely consequence:

Customer issues are likely to beexacerbated by lack of awarenessof communication options as this isthe primary source of informationfor most customers.

Full compliance

Information is provided to customers through multiple deliverymodes. It is noted that Sydney Water’s survey includedassessment of how customers identify options forcommunication. A quality assurance process is in place toensure the information is communicated effectively. Thedelivery modes include:

Sydney Water’s website contains a page on ways tosubmit complaints.

Quarterly customer newsletter sent out with bills also

provides these contact numbers, postal and websiteaddresses. Once each year, a segment of the newsletteroutlines the complaints process and escalation through

EWON.

Additionally, and in accordance with 6.1.4, evidence wasproduced that each customer bill indicates the telephonenumbers for general enquiries and service faults.


7. Licence Part 7 – Environment – Indicators andManagement


Part 7 of the Operating Licence requires Sydney Water to:

report on of its performance against the environmental indicators,

establish and maintain a certified environmental management system,

produce a five-year environment plan which is reviewed and updated annually, and

reduce potable water used for treatment processes at STPs.

These Licence clauses are intended to establish decision making processes andprinciples that influence the environmental management of Sydney Water’s activities.

The following Licence clauses are subject to audit by GHD:

7.1.2, 7.1.3, 7.1.4

7.2.2, 7.2.4, 7.2.6, 7.2.7

7.3.1 to 7.3.4

The remaining clauses for Part 7 of the Licence are subject to a statement ofcompliance by Sydney Water, the assessment of which does not form part of thisreport.

7.2 Environment – Indicators and Management – Compliance

Compliance for Part 7, Environment – Indicators and Management, is outlined in Table

8 below.


7.3 Discussion

7.3.1 Environmental performance indictors – Schedule 3 report

The report prepared by Sydney Water to report its performance against theenvironmental indicators, the Schedule 3 Environmental Performance Indicators 2008-09 Report, includes some indicators that are measured on a different basis than is

required in the Licence (Schedule 3).

In Schedule 3, Indicator 10 - Recreational Water Quality is defined as “percentage of

time recreational water complied with the recreational water quality guidelines as


reported by DEC’s Beachwatch and Harbourwatch.”

Sydney Water reports against this indicator using the percentage of sites compliantmore than 90% of the time. This is explained in the Schedule 3 report as being the

indicator used by DECCW and measured through the Beachwatch and Harbourwatchprograms.

Indicator 15 - Greenhouse gases is required to be expressed as “CO2 equivalent

emissions through purchase of electricity, fuel and gas”. Sydney Water calculatesemissions from purchased electricity and fuels, then subtracts NSW GreenhouseAbatement Certificates (NGACs) surrendered as carbon credits from the total. This

calculation was also used for the 2007-08 Schedule 3 report. This is not consistentwith the wording of the Licence. It may better communicate Sydney Water’s netgreenhouse gas emissions, given the objective for carbon neutrality by 2020. Sydney

Water should report the indicator as required by the Licence, as well as alternatives if itwishes, in order to allow comparison with the previous 10 years of data.

The form of indicator for greenhouse gas emissions should be reconsidered when the

Licence is revised. A future indicator may be aligned with the new NationalGreenhouse and Energy Reporting Act compliance report that Sydney Water isrequired to provide to the Australian Government each year from 2008-09.

Indicator 18 - Heritage is required to be expressed as “number of State heritage listed

sites with Conservation Management Plans prepared as a proportion of the number ofState heritage listed sites without Conservation Management Plans prepared”.

Sydney Water reports the total number of State heritage listed sites, the number ofthese with CMPs, and the proportion of the number of State heritage listed sites withCMPs. This is not consistent with the wording of indicator 18, but more effectively

communicates both the number of heritage sites and the proportion with CMPs.

The form of indicator for State heritage listed sites should be reconsidered when theLicence is revised. A future indicator consistent with the way Sydney Water has been

reporting may provide more meaningful information than that expressed by the currentindicator.

7.3.2 Provision of information for comparison over ten years

Clause 7.1.3 requires Sydney Water to “compare the performance indicators in

Schedule 3 with historical annual values over at least the previous 10 years wherecomparable data is available”.

The Schedule 3 Report for 2008-09 contains data for 10 years for all indicators, where

available.

The following indicators are reported for a 9-year period, as these indicators were firstintroduced in the 2000-05 Operating Licence - 4a, 7a, 7b, 17, and 18b.


The following indicators are reported with 4 years of data available since the indicatorswere introduced in the 2005-10 Operating Licence - 6e, 7d, 8a, 8b, 10b, 19a, and 19b.

Some data from previous requirements have been incorporated to expand the range of

historical data for more recent Schedule 3 indicators:

Data are shown for 4b, 4c and 4d from Sydney Water’s Recycled Water Strategyprior to the introduction of the indicators in the 2005-10 Operating Licence.

Comparable data are shown for 12b since reporting began.

The definition of customer complaints was changed in the 2005-10 OperatingLicence; to provide historical data for comparison, Sydney Water re-calculated themeasure for the previous 2 years of data for 20 and 21 (2003-04 and 2004-05

using internal records of customer complaints).

7.3.3 Review of Environment Plan – consultation with stakeholders

Licence clause 7.2.7 requires Sydney Water to consult specified stakeholders “for thepurpose of considering the views of those consulted organisations and whether they

seek amendments to the Environment Plan in the subsequent year”.

In November 2008, Sydney Water issued letters to the Department of Environment andClimate Change, Department of Planning, Department of Water and Energy, IPART,

Total Environment Centre and the Nature Conservation Council of NSW, with a copy ofthe 2007-08 Annual Report Summary.

These letters principally promoted the public release of the Annual Report, with the

website address for a copy of the full Report, and indicated which sections of the fullReport contained information on environmental performance.

The letters stated that Sydney Water undertakes an annual review of the Environment

Plan and stated that Sydney Water “will consider any feedback that your Departmentmay provide on our performance in the Environment Plan Progress Report”. No datesfor the consultation period or the review of the Environment Plan were given in the

letter.

No responses were received from the stakeholders to these letters.

The confining of any feedback to “performance” and the lack of a clear invitation to

provide input to the annual review of the Environment Plan may be limiting theeffectiveness of the consultation.

7.3.4 Potable water use at sewage treatment plants (STPs)

Sydney Water has undertaken a range of initiatives to reduce potable water use atsewage treatment plants. The Licence requires specific targets to be met by 30 June

2009.


The key target was the reduction in use of potable water for treatment processes by80% from 2003-04 usage rates at Bondi, Malabar and North Head STPs.

A significant reduction in potable water use was achieved at North Head STP following

the installation of a recycled water plant in 2005-06. The volume of potable water usedin 2008-09 was reduced from the 2003-04 level by 98.9%.

Reductions in potable water use at Malabar and Bondi were the result of a sequence of

changes in equipment and procedures completed in June 2009. Sydney Water hadproposed to install a recycled water plant at Malabar to ensure that this potable waterreduction target could be met. Following receipt of tenders for this plant, it was

determined that the cost was excessive and the target was instead met through acombination of smaller works and reduction of leaks at the STP.

The daily measured volumes of potable water used in June 2009 were more than 80%

below the daily use in 2003-04. However, note the total volume of potable water usedin 2008-09 does not reflect the 80% reduction target for Bondi and Malabar as the workwas not completed until late in the financial year.

Table 7 shows the measured potable water use in 2003-04 for each of these STPs, thereduction target and measured and annualised figures demonstrating achievement ofthe 80% reduction target

Table 7 Potable Water Use (STPs)

Potablewater 03-04(ML/yr)

80%reductiontarget(ML/yr)

Potablewater 08-09 (ML/yr)

AnnualisedJun 09(ML/yr)

Percentreduction

NorthHead

577 115.4 6.5 98.9%

Malabar 523 104.6 146.3 103.4 80.2%

Bondi 348 69.6 71.9 58.0 83.3%

Bold figures above are those used in the calculation of the percentage reduction.

In the Operating Licence Compliance Report 2008-09, Sydney Water noted that a fault

in the remote telemetry system at Malabar was identified in August 2009, potentiallyunder-reporting the use of potable water. Sydney Water noted in the OperatingLicence Compliance Report 2008-09 that the telemetry error may require revision of

the 2003-04 baseline at Malabar. At the time of this audit, Sydney Water had

undertaken an initial assessment of this issue and indicated to the auditor that thedifference in measured and recorded values was minimal.


When assessing the data on potable water use at STPs, it should be noted that thereis a difference between the reporting requirements for potable water use in Clause 7.3and the environmental performance indicator in Schedule 3.

Licence clause 7.3 relates to potable water use for treatment processes at sewagetreatment plants.

Schedule 3 Environmental Performance Indicator 4(b) requires Sydney Water to

measure and report potable water use as a percentage of total water used at eachsewage treatment plant.

Measured potable water use at STPs generally includes water used for staff facilities,which is not separately metered. The total reported potable water use for treatment

processes at most STPs includes the volume for staff facilities, therefore slightly over-reporting the potable water use for Clause 7.3.

7.3.5 Incomplete data provided in Operating Licence Compliance Report

At the audit interview it was identified that the reported volume of potable water used at

each STP was the total volume to the end of May 2009, not to the end of June 2009.This resulted in incorrect annual values in a number of reports where either the volumemeasure or the proportion of potable water used was reported.

These incomplete figures were included in:

Operating Licence Compliance Report, submitted to IPART in August 2009

Water Conservation & Recycling Implementation Report, submitted to IPART in

August 2009

draft Schedule 3 Environmental Performance Indicators 2008-09, as provided to

the auditor 17 September 2009

draft Environment Plan Progress Report, as provided to the auditor 17 September

2009.

Following an internal review of the relevant sections of these reports, Sydney Waterconfirmed that the reported volume of recycled water used at each STP was correct,and confirmed that the error only related to the volume of potable water.

Sydney Water advised that the incomplete data were included because the internalreporting deadline was prior to the collation of year end potable water use data andtherefore the available ‘year to date’ values were reported.

Sydney Water has advised that it will review its internal procedure for compilation ofthese data to reduce the risk of reporting amounts that are less than the full year total.


No extraordinary factors affected Sydney Water’s compliance with Part 7 of the


Operating Licence during the audit period. No events or factors identified during theaudit were predicted to affect Sydney Water’s future compliance with Part 7 of theLicence.

7.5 Recommendations


There are no key recommendations in relation to Part 7.



R7.1 Amend the content of letters sent to stakeholders (under Clause 7.2.7)to more clearly invite consultation on the review of the EnvironmentalPlan.

R7.2 Revise internal procedures to compile data on water use at STPs toensure that the full annual total is compiled for reports. .





7.1 Environmental Indicators

7.1.2 By no later than 1 September 2006 and at the sametime in each subsequent year, (or an alternative laterdate specified by IPART), Sydney Water must report onits performance against the environmental performanceindicators, in Schedule 3 in a manner to be approved byIPART.

Moderate: If Sydney Water did notprepare an annual report onenvironmental performance, itwould be less able to manage andmonitor performance and moreunlikely to meet targets.

Full compliance(2007/08)


Schedule 3 reportsubmitted to IPART by 30September, as agreed byIPART in monitoring andreporting protocol.

The Schedule 3 Environmental Performance Indicators 2007-08Report was submitted to IPART 26 September 2008 (the auditorsighted the transmittal letter)

The Schedule 3 Environmental Performance Indicators 2008-09Report was submitted to IPART on 30 September 2009 (the auditorreceived confirmation from IPART of receipt of the report on thisdate)

7.1.3 The report must provide information which enables ayear to year comparison in relation to Sydney Water’sperformance against the environmental performanceindicators in Schedule 3. In particular, Sydney Water isto compare the performance indicators in Schedule 3with historical annual values over at least the previous10 years where comparable data is available.

Moderate: If Sydney Water did notcompare performance over time, itwould be less able to assess thelevel of performance improvementand less able to identify areaswhere performance is not meetingexpectations.



Presentation of dataallowing comparison overtime (10 years whereavailable).

IPART conducted a desktop review of the 2007-08 Report, andstated in the 2007-08 Audit Report that Sydney Water fulfilled thiscriterion.

The Schedule 3 Environmental Performance Indicators 2008-09Report includes all Schedule 3 indicators as required for 2008-09and previous years for comparison.

All indicators include data for 10 years, where available. Theminimum number of years of data is 4 years (from 2005-06 year).

The format of the report differs slightly from the 2007-08 Report;Sydney Water advised that changes were negotiated with IPART.

An external verification audit of the data in the Schedule 3 Reportwas commissioned by Sydney Water and demonstrated that dataquality met accepted standards.

Discussion of some issues in the presentation of indicators andprovision of data for the ten year period is included in Section 7.3above.

7.1.4 The information in the report referred to in clauses 7.1.1and 7.1.2 is to be made available to the public bySydney Water. Copies of the information are to be madeavailable from Sydney Water's offices on request free ofcharge and posted on Sydney Water's website on theinternet for downloading by any person also free ofcharge.

Low: If Sydney Water did not freelyprovide information onenvironmental performance, publicconfidence may be diminished dueto lack of transparency.



Public availability –website and physical (nodate specified)

Schedule 3 Environmental Performance Indicators Report 2007-08is available on the website, the report was released on the site on28 November 2008 (the auditor sighted a staff notice of this dateadvising of the availability of the report on the website).

Sydney Water states in the Operating Licence Compliance Report2008-09 that the Environmental Performance Indicators Report2008-09 will be available on its website by December 2009,following tabling of the Annual Report in Parliament.

Multiple copies are no longer printed (last printed in 2005), butoffices are able to print copies and provide a physical copy onrequest. No record is retained of these requests.




7.2 Environmental Management

7.2.2 Sydney Water must produce a five-year EnvironmentPlan by 30 September 2005. Sydney Water mustannually review and update the Environment Plan inaccordance with its environmental management systemreferred to in clause 7.2.1.

High: Absence of an EnvironmentPlan which is updated annuallywould limit Sydney Water’scapability to identify and prioritiseenvironmental aspects and manageenvironmental performance.

Full compliance. Annual update, inaccordance with EMS

The annual review and update of the Environment Plan is set out inthe Sydney Water Environmental Planning Procedure(SWEMS0004), within the EMS.

The Environment Plan 2008 - 2013 was approved by the Board on16 July 2008 and released on its website on 7 August 2008.

The Sydney Water Environment Plan 2009 - 2014 was approved bythe Board in July 2009.

7.2.4 (a) The Environmental Plan must:

Contain details of Sydney Water’s program forenvironmental improvement for its water, waste waterand stormwater strategies, as well as the environmentalaspects of its other activities such as energymanagement, waste minimisation, heritage and BotanyWetlands

Moderate: Exclusion of theseaspects from an Environment Planwould render it ineffectual.

Full compliance. Congruence betweenactivities and targets inEnvironment Plan and theactivities listed in thelicence clause.

The Environment Plan 2008 - 2013 contains actions and targets forall aspects and activities required in the Licence clause.

It includes the following targets:

Energy management: meet objectives of Sydney Water EnergyManagement Plan

Waste minimisation: targets to reduce construction and office

waste, and to incorporate waste minimisation into planning anddesign

Heritage: 80% of State heritage listed sites have ConservationManagement Plans by June 2009

Implementation of the Botany Wetlands Plan of Managementprograms.

7.2.4 (b) endorse Ecologically Sustainable Developmentprinciples

Low: ESD principles shouldunderpin the Environment Plan,explanation and endorsement ofthese principles increases clarity ofthe purpose and intent of the Plan.

Full compliance. Environment Plan mustendorse ESD principles.

The Environment Plan 2008 - 2013 endorses EcologicallySustainable Development and explains key principles. The text onESD principles is consistent with the Sydney Water EnvironmentalPolicy.

7.2.4 (c) be integrated into Sydney Water’s business plans Moderate: Without integration ofEnvironment Plan actions intorelevant business plans, theseactions may not occur.

Full compliance Evidence of integrationinto business plans.

The Sydney Water business planning process includes referral ofall actions of the Environment Plan to Divisions and business unitswith primary responsibility for implementation of these actions.

Across the nine Divisions of Sydney Water, six Divisions haveactions related to the Environment Plan contained in DivisionalBusiness Plans. The three Divisions without actions relating to theEnvironment Plan are responsible for corporate services and do nothave primary responsibility for any of the actions.




7.2.4 (d) Incorporate the objectives of the energy managementplan of Sydney Water to

(i) improve energy efficiency and generaterenewable energy; and

(ii) minimise the environmental impact of its energyconsumption; and

(iii) comply with all relevant energy related regulation;and

Low: Actions in the energymanagement plan aim to reducegreenhouse gas emissions,therefore both the environmentaland energy management plans maybe reinforced by incorporation in theEnvironment Plan

Full compliance Objectives of EnergyManagement Planincorporated intoEnvironment Plan.

The Environment Plan 2008-2013 includes targets required by thisLicence clause:

Renewable energy generation projects capable of producing 60

GWh per year completed by 2010;

Energy efficiency targets for new offices, use of ethanol blendedfuels in fleet vehicles;

Compliance with the NSW Government Energy ManagementPolicy and Energy Efficiency Opportunities Act.

7.2.4 (e) Incorporate environmental improvement targets andtime tables for Sydney Water to achieve over the term ofthe Environment Plan.

High: Without performance targetsand timetables, the EnvironmentPlan could not reliably influenceenvironmental performance.

Full compliance Clear targets andtimetables in EnvironmentPlan

The Environment Plan 2008-2013 includes one or more targets foreach action.

The Environment Plan includes a due date for each target. Sometimetables for targets are annual; others are for a specific futuredate, such as the target of carbon neutrality by 2020.

7.2.6 By no later than 1 September each year, or analternative later date specified by IPART, Sydney Watermust report to IPART on its progress for the previousfinancial year in meeting the Environment Plan.

Moderate: If Sydney Water doesnot monitor and report itsperformance in meeting theEnvironment Plan, it will be lessable to manage and improveenvironmental performance.



Environment Planprogress report submittedto IPART by 30September, as agreed byIPART in monitoring andreporting protocol.

The Environment Plan 2007-2012 Progress Report was submittedto IPART on 26 September 2008 (the auditor sighted the transmittalletter).

The Environment Plan 2008-2013 Progress Report was submittedto IPART on 30 September 2009 (the auditor received confirmationfrom IPART of receipt of the report on this date).

The report is to include Sydney Water’s compliance withthe targets and timetables in clause 7.2.4, and inmanaging the Botany Wetlands.

Moderate: If Sydney Water doesnot monitor and report againsttargets and timetables, it will beless able to manage and improveenvironmental performance.



Report on implementationof Botany Wetlands Planof Management withinEnvironment PlanProgress Report.

The Environment Plan 2007-2012 Progress Report states thatSydney Water implemented the Botany Wetlands Plan ofManagement programs as scheduled for 2007-08.

The Environment Plan 2008-2013 Progress Report states thatimplementation of the Botany Wetlands Plan of Management hasbeen on track for 2008-09. This has included blue-green algaemanagement, bush regeneration and weed control

The information in the report must be posted on SydneyWater’s website on the internet for downloading free ofcharge and made available at its premises for access orcollection by any member of the public.

Low: If Sydney Water did not freelyprovide information onenvironmental performance, publicconfidence may be diminished dueto lack of transparency.

Full compliance (2007-08).

Public availability –website and physical (nodate specified)

The Environment Plan 2007-2012 Progress Report was availableon the Sydney Water website from November 2008.

The Operating Licence Compliance Report states that theEnvironment Plan 2008-2013 Progress Report will be available onthe website by December 2009 as part of the Annual Report.Printed copies will be provided on request.

Compliance of the 2008-09 Report is not able to be assessed untilDecember 2009.




7.2.7 Each year Sydney Water must review the EnvironmentalPlan by consulting with DEC, DIPNR, IPART, and peakenvironmental non-governmental organisations for thepurpose of considering the views of those consultedorganisations and whether they seek amendments tothe Environmental Plan in the subsequent year.

Low: If Sydney Water did notconsult with stakeholders during theannual review of the EnvironmentalPlan, stakeholders may bealienated and seek moreconfrontational means to expresstheir views.

Full compliance Evidence of consultationwith identifiedorganisations.

Sydney Water issued letters to DECCW, DWE, Planning, IPART,Total Environment Centre, NCC NSW and peak environmentalNGOs inviting feedback on the Environment Plan Progress Report,and informing these organisations of the annual review of theEnvironment Plan. No responses were received from stakeholders.

See discussion in Section 7.3, and the recommendation on futurecontent of letter or manner of consultation.

7.3 Potable Water Use

7.3.1 Sydney Water must ensure that potable water use fortreatment processes at each of the following sewagetreatment plants has been reduced by 80% in volumetricterms from its 2003/04 usage rates by 30 June 2009 –Malabar, North Head and Bondi.

Moderate: If Sydney Water did notsignificantly reduce potable wateruse at STPs, it would beundermining demand managementpolicies.

Full compliance Reduction in potable waterby 80% from 2003-04volumes, by 30 June 2009.

Sydney Water has achieved the 80% reduction target in potablewater use at the three specified sewage treatment plants – NorthHead, Malabar and Bondi.

At Malabar and Bondi the works were completed in June 2009 andthe assessment of compliance with this target is based onmeasured potable water use in June 2009. The auditor sighted thedaily potable water use measures for June 2009.

7.3.2 By 30 June 2009 Sydney Water must ensure that allsewage treatment plants (other than Malabar, NorthHead and Bondi, and storm flow sewage treatmentplants at Fairfield, Bellambi and Port Kembla) use atleast 85% recycled water for treatment processes.

Moderate: If Sydney Water did notreduce potable water use at STPs,it would be undermining demandmanagement policies.

Full compliance At least 85% of water usedin STP treatmentprocesses to be recycledwater (other than at thelisted STPs)

Sydney Water met this target, with all required STPs using recycledwater for more than 90% of all water used for treatment processes.Across the 23 STPs to which this clause applies, the overallrecycled water use is 98.1%.

7.3.3 Sydney Water must undertake potable water efficiencyaudits at all sewage treatment plants (other thanMalabar, North Head and Bondi) and implementappropriate findings under a water conservation plan by30 June 2009.

Moderate: If Sydney Water did notreduce potable water use at STPs,it would be undermining demandmanagement policies.

Full compliance Evidence that audits wereundertaken and thatfindings implementedthrough a waterconservation plan.

The water efficiency audits required at 31 STPs were completed in2007 and 2008.

The findings of these audits have been incorporated into the WaterConservation Plan.

The auditor sighted the current Water Conservation Plan Version 3in which the implementation of recommendations from these auditsis recorded.

Sydney Water stated that most of the on-site efficiencyrecommendations had already been implemented, with the focusnow on works to increase offsite reuse of water.

7.3.4 By no later than 1 September each year, Sydney Watermust report to IPART on its progress in relation toclause 7.3.1, 7.3.2 and 7.3.3 for the previous 12 months,to enable the IPART to consider and report on thematter as part of the Annual audit.

Moderate: If Sydney Water doesnot monitor and report againsttargets, it will be less able to reducepotable water use.

Full compliance Report on these clausesprovided to IPART.

A report of Sydney Water’s progress in relation to these clauses for2008-09 was provided in the Operating Licence Compliance Report2008-09 submitted to IPART on 31 August 2009.


8. Licence Part 9 - Water Conservation and DemandManagement


Part 9 of the Operating Licence requires Sydney Water to comply with specific waterconservation and demand management objectives. This is to ensure that Sydney

Water achieves appropriate water demand reduction targets and implements water re-use to reduce the growth in total demand for potable water from catchment sourcesmanaged by the Sydney Catchment Authority (SCA).

For the purpose of the Risk Based Audit, Licence Clauses 9.1.1 - 9.1.3, 9.2.1 - 9.2.3,and 9.3 are subject to a detailed audit by GHD. The remaining clauses for Part 9 of theLicence were subject to a review by IPART, the assessment of which will not form part

of this report.

IPART in consultation with GHD has assessed the risk posed by each auditable clauseand what constitutes Full compliance. GHD will assess the compliance of Sydney

Water against these guidelines.

Ministerial Requirements

There is no Ministerial Requirement in the 2008/09 audit year in relation to water

conservation and demand management.

8.2 Water Conservation and Demand Management – Compliance

Compliance for Part 9, Water Supply and Demand, is outlined in Table 9.

Sydney Water exhibited Full compliance with the requirements of this part of the

Licence, as it did the previous year.

8.3 Discussion

Sydney Water’s Demand Management Strategy is considered to be well developedand implemented, including a continuous improvement planning cycle. Sydney Water

has demonstrated effective adaptive management in its continued adjustment ofdemand management programs towards its Water Conservation Target. The WCRIRdemonstrated improving performance against the water conservation target, with an

estimated demand of 309 LCD including reasonable adjustments for the effects ofweather on water usage, against the 2011 target of an estimated 329 LCD. Averagedemand without mandatory restrictions in place of an estimated 372 LCD

demonstrates significant improvement in water conservation measures whencompared with 426 LCD, being the estimated baseline demand (excluding savings


from water conservation programs and restrictions) in 2008/09.

Sydney Water has developed a detailed program of water conservation activities andinitiatives which were implemented / maintained for 2008/09. These were applied

within the key areas of residential water efficiency (including programs such asWaterfix, washing machine rebate, rainwater tank rebate, water saving kits etc.),business water efficiency program (particularly the Every Drop Counts Business

Program), schools programs (EDC in schools), its leak detection/reduction program,and water recycling program (particularly the Rouse Hill and Wollongong RecycledWater Schemes). Furthermore, a number of pilot programs (trialled to determine their

applicability for implementation), regulatory measures (such as BASIX and the WELSscheme) and externally managed programs (Water Savings Action Plan, NationalRainwater Initiative, Climate Change Fund etc.) together with community education

and research and development activities produced an overall good result in the area ofwater conservation and demand. Sydney Water’s commitment towards these programs(especially those for which Sydney Water is directly responsible) is well demonstrated.

The planning and prioritising for the water conservation strategy is well established and

implemented, with existing and proposed programs identified and evaluated. SydneyWater indicated that it is currently undertaking research to define when a lessbeneficial program should be dropped off the strategy or only retained on Sydney

Water’s website (rather than just scaled back as is currently the case). Progresstowards this should be followed up in next year’s audit.

The evaluation of water conservation programs is well defined in Appendix 6 (water

conservation reporting schedule) of the WCRI Report, although no discussion isprovided as to why the key differences have arisen between the planned and actualwater savings which would be beneficial to note in future reports.


It should be noted that a range of externally managed programs also influence theoverall water conservation and demand of the resources managed by Sydney Water.

8.5 Recommendations


There are no key recommendations for Part 9 of the Licence.




SR 9.2 Maintain its research to define when a less beneficial waterconservation program should be either dropped off the strategy oronly retained on Sydney Water’s website and that progress shouldbe followed up in next year’s audit.

SR 9.3 Report totals for water savings in a litres per capita per day (lcd)format (in addition to ML/yr) to allow for comparison against theOperating Licence target.

SR 9.4 Provide a discussion on the key differences in results of theplanned and actual water savings in the water conservationreporting schedule.





9.1.1 Sydney Water must take action to reduce thequantity of water (other than Re-use water) itdraws from all sources to meet the waterconservation target of 329 litres per capita per dayby 2010/2011 (being a reduction of 177 litres percapita per day or 35% from the 1990/1991baseline).

[Note: The 1990/1991 baseline is 506 litres percapita per day.]

Medium: This clause provides abasis for water planning for supplyand demand. If this requirementwas not met, future planning wouldbe compromised.

Full compliance A reporting system thatprovides a trend of the percapita usage against theagreed targets and adescription of actions adoptedand proposed to achieve this.

Water conservation is reported in Sections 3,4 and 5 of theWater Conservation and Recycling Implementation Report(WCRI Report) for 2008/09. With mandatory restrictions inplace the observed per capita demand per day for 2008/09was 309 Lcd. The corrected figure (without mandatoryrestrictions) for the per capita demand for 2008/09 was 372Lcd.

It is noted that this is not a reduction on last years reportedfigure (306 Lcd). The general trend of the per capita wateruse (as shown in Figure 6 of the WCRI report) is downwards,and Sydney Water has developed a strategy for the 2009-11period to achieve the Licence target of 329 lcd. Uncertaintiesin the future predictions are noted and a sensitivity analysison the figures was undertaken to provide reassurance of thevalidity of the figures. It is noted that the Licence target is atthe lower end of the forecast range of water use, howeverSydney Water has indicated that a conservative estimate hasbeen adopted in assessing the residual effect from waterrestrictions, based on previous experience.

Sydney Water is introducing new programs in the 2009/10strategy (Schools Amenities Replacement Pilot and HospitalsAssistance Program) to assist in meeting the 2010/11 target.Furthermore, a “Review of Consumption for Sydney WaterCorporation” undertaken by MMA (March 2008), shows thatMMA’s independent forecast for bulk water and residentialwater consumption is lower then Sydney Water’s forecast.

It is noted that the figures generally reported for water use /water savings are in ML/year with only minor reference to theunits of lcd. While it is appreciated that units of ML/d are moreappropriate for Sydney Water to work with, further reporting(conversion) of the figures on an lcd basis would allow forbetter comparison with the Operating Licence target (e.g.totals in Table 6 and Appendix 11 should also be reported inlcd format).



9.1.2 In assessing compliance with the waterconservation target in clause 9.1.1, reasonableadjustments are to be made for the effects ofweather on water usage.

Medium: Non-compliance with thisclause may result in a significantover or underestimation of wateruse and hence planning for watersupply and demand.

Full compliance Evidence of appropriatecorrection and methodology forcorrection

The adjustments for weather are reported in Appendix 5 ofWCRI Report. A climate correction model has beendeveloped for use by Sydney Water which takes account ofrelevant climatic factors. Further, a Corrective Amendment toSydney Water's Climate Corrected Demand Model, ProjectReport (July 2009), was prepared by PB MWH Joint Ventureto undertake corrective amendments to Sydney Water’sClimate Corrected Demand Model and ensure that theclimate correction model is reviewed for accuracy andrelevance.

9.1.3 By no later than 1 September each year, SydneyWater must report to IPART on its progress incomplying with the water conservation target inclause 9.1.1 (which may include any targets forWater leakage), to enable IPART to consider andreport on the matter as part of the Annual audit.

Low Risk: The annual reporting ofperformance is considered a lowrisk as long as the strategy (forwater conservation targets) is inplace and being implemented.

Full compliance A reporting system thatcompares performance againstagreed targets.

The Water Conservation and Recycling Implementation(WCRI) Report 2008/09 was provided to IPART prior to the 1September 2009 which detailed the water conservationtargets and Sydney Water’s progress in meeting these. SeeClause 9.1.1 and 9.1.2 for further details.

Sydney Water has continued to implement soundinfrastructure based improvement/management programs tominimise water leakage and to monitor its systems to identifyand prioritise improvement activities.


9.2.1 Sydney Water must give due consideration todemand side management as the basis forplanning the future provision of its Services,including addressing Water leakage.

Medium risk: non-compliance mayresult in insufficient supplies.

Full compliance Evidence of demand sidemanagement programsincluding a leakage reductionprogram.

Demand management is reported in Sections 1, 2, 3, 4 and 5of the WCRI Report. Sydney Water also gives dueconsideration to demand side management through keyplanning documents including:

- Sustainability Planning Manual (which incorporates demandmanagement in its’ goals)

- Sydney Water Corporate Plan (which incorporates thedemand of <329lcd and the leakage target as keyperformance indicators).

- Sustainability Division Business Plan - which designatesresponsibility for demand management planning to thestrategy direction group.

- Environment Plan which specifies outcomes, actions andtargets for demand management programs and leakagereduction.

Demand management is also linked to other areas such asthe Trade Waste Policy which incorporates objectives toenable water conservation and encourage waste minimisationin the commercial and industrial sectors.



Other external documents that Sydney Water works withrequire consideration of demand side management including:Metropolitan Water Plan 2006 (which outlines current andproposed actions for reducing demand), State Plan (whichspecifies a target of 145 billion litres of water saving by 2015).

Sydney Water also provided an overview of the three levelsof infrastructure planning with Level 3 Area Plans being themost common application. It was identified that the basis ofplanning for demand side management did vary betweenvarious groups (e.g. asset teams may have a different basisfor sizing to other teams) and various documents have beenreferenced as the bases or to inform demand side planning(‘Report on the Average residential demands in 2031 fordesign and planning’ and ‘Asset Planning Design CriteriaGuide’ documents have both been noted). While it wasrecognised that planning (and sizing) is an iterative processbetween the different levels of planning, the final sizing ofinfrastructure was understood to be based on observedhistorical peaks without any allowance for the statisticalvalidity of the demand rates used or the return period of suchevents. No evidence was provided of sensitivity or riskanalyses conducted confirming this approach was not leadingto under or over sizing of infrastructure and consequentimpacts on Licence compliance or expenditure.

Sydney Water provided an information memo to the auditoroutlining the Peak Demands in Planning Water Systems. Thememo outlined a study undertaken by Department ofCommerce and Sydney Water which considered thereduction in maximum day demand which has beenincorporated by Sydney Water into planning water supplysystems. Furthermore, the memo indicates that the planningbasis for brown field areas considers peaking factors fromactual observed system peaks within a relevant period(collection of telemetry data but pre introduction ofrestrictions). The memo further recognised (for futureplanning purposes) that while per capita demands havereduced (since the introduction of restrictions), there hasbeen no similar reduction in peak demands (for variousreasons). Since this issue impacts more directly oninfrastructure asset management, the resulting commentaryand analysis have been incorporated in the audit at Section 4,Clause 4.8.



9.2.2 By no later than 1 September each year, SydneyWater must provide a demand managementstrategy implementation report to IPART thatreports on its implementation of its demandmanagement strategy for the previous financialyear, to enable IPART to consider and report onthe matter as part of the Annual audit.

Medium risk: Provides theframework for managing waterdemand in its area of operations.Noncompliance may lead to a lackof integration and reducedeffectiveness of the plan.

Full compliance Current and detailed documentoutlining the plans formanaging water demand andthe factors that influence these.

The WCRIR is Sydney Water’s demand managementstrategy implementation report. The WCRIR was submitted toIPART before 1 September 2009 and reported SydneyWater’s implementation of its demand management strategyfor 2008/09.

9.2.3 (a) The demand management strategyimplementation report must:

Contain an estimate of past, current and projectedwater uses and distinguish between residential,industrial, commercial and government uses.

Medium risk: Noncompliancereduces the ability for SydneyWater to provide a basis forimproved water planning for waterdemand.

While comparison with previousyears provides useful information itdoes not significantly impact on theability of Sydney Water to managedemand. Noncompliance fails tokeep stakeholders informed ofperformance.

Full compliance Estimates and comparison ofdata for consecutive years forcustomer types andexplanatory notes fordifferences.

Water use was reported in Appendix 3 of the WCRI Report.This includes graphs of residential, industrial, commercial andgovernment and institutional water demands between 1991and 2009, as well as graphs of sector water demandforecasts for residential and business water sectors. (Notethat no distinction is made for industrial, commercial andgovernment uses for projected water uses).

9.2.3 (b) Describe the frequency and magnitude ofexpected supply deficiencies, including thosearising as a result of wastage or loss, drought oremergency.

Note Delegated Tribunal decision of 26 May 2009that all parts are auditable. 9.2.3 (b) requires adescription of supply issues based on informationavailable to SWC.

Low Risk: Allows for identificationof risks associated withinconsistencies with supply sidemanagement practices.

Full compliance Evidence of consideration ofsupply deficiencies andinteraction with SCA (supplyauthority).

The Monitoring and Reporting protocol offers the followingcomments regarding subclause (b), (f) and (g): This Licenceclause was developed when Sydney Water was responsiblefor demand and supply side planning i.e. before the creationof the Sydney Catchment Authority. IPART agrees thatsupply side initiatives are not the exclusive responsibility ofSydney Water. However, Clause 9.2.2 (b) should still becomplied with. Refer to specific details regarding subclauses(f) and (g):

Appendix 2 of the WCRI Report responds to the requirementof Licence Clause 9.2.3 (b) but refers the reader to theframeworks which establishes the parameters for SydneyWater’s operation within supply deficiencies. In particular, the2006 Metropolitan Water plan addresses the medium termdemand-supply balance and the management of supply /demand balance in times of drought (through a range ofactions such as imposing restrictions, transfer of supplies,reducing environmental flows, increasing recycling andreviewing / implementing alternative water supplies such asdesalination and groundwater).



The Metropolitan Water Plan (2006) sets out how the NSWGovernment will achieve the objective of providing a securesupply of water that can meet the long term needs of Sydney.Achieving this requires collaboration of all the players,including Sydney Water (demand side) and the SydneyCatchment Authority (supply side), to validate and inform theprocess and to develop and assess options. Sydney Water’sinput into supply side planning and interaction with theMetropolitan Water Plan was verified within the scope of thisaudit.

The demand management strategy implementation report(WCRI Report) does not in itself directly describe thefrequency and magnitude of expected supply deficiencies.However, the Tribunal decision to include a description ofsupply issues based on information available to SydneyWater is complied with.

9.2.3 (c) Identify conservation measures currently adoptedand being practised.

Medium: Non compliance may leadto water shortages (due to anunderestimate of water demand).

Full compliance Evidence that Waterconservation measures havebeen identified andimplemented.

Conservation measures are reported in Section 4 of WCRIReport. Sydney Water has adopted and implemented a rangeof conservation measures, including residential waterefficiency programs (Waterfix, washing machine rebate,rainwater tank rebate, water saving kits etc.), business waterefficiency program (particularly the Every Drop CountsBusiness Program), schools programs (EDC in schools) andits leak detection/reduction program.

In addition, Sydney Water has furthered community educationand pilot programs targeting water efficiency in residentialand business use.

A tabulated summary of Water Efficiency Programs for2008/09 was provided by Sydney Water which outlinesadopted programs within the areas of Residential, EDCBusiness Program (business), EDC Business Program(schools), Leaks, Regulatory and other Measures, Recycling,Research and Development, and Other programs (generallyrelating to external programs such as NGAD, community andfederal grants, State grants etc.).

9.2.3 (d) Describe, cost and evaluate additionalconservation measures.

Low risk: Allows for identificationand prioritisation of alternativeconservation measures whichcould be adopted andimplemented.

Full compliance Evidence of consideration of arange of conservationmeasures.

The Water Conservation Strategy is outlined in Section 5 ofWCRI Report.

The programs are constantly monitored for their performanceand to determine the most cost effective use of funds toachieve maximum benefit.

Further details on the cost and evaluation of additionalmeasures are provided in Clause 9.2.3 (g).



9.2.3 (e) Describe future plans for water reclamation andstrategies to alter water use practices, includingthose relating to the installation of more efficientwater appliances and devices by users;

Low risk: Non-compliance mayresult in poor planning of strategiesand their implementation.

Full compliance Evidence of consideration of arange of water reclamation andwater use practices options.

Future planning was reported in Sections 4 and 5 of theWCRI Report. Sydney Water outlined current ongoing (future)plans for water reclamation and water efficiencies as well asproposed plans under the 2009-10 Water ConservationStrategy (Section 5). Furthermore, Sydney Water provided alist of Other Potential Options to be Considered within thesummary of the Water Efficiency Programs 2008-09 Report.

Sydney Water identifies new water efficiency programsthrough a range of sources (literature, other agencies etc.)which are then ranked (refer to Clause 9.2.3 (g)).

9.2.3 (f) Evaluate these plans in terms of their cost andcontrast with the cost of alternative water supplies.

Medium Risk: allows for costeffective implementation ofdemand management strategy.

Full compliance Evidence of cost comparison ofoptions against alternativewater supplies.

Evaluation of plans was reported in Sections 1, 2, 5 andAppendix 2 of the WCRI Report

As per subclause 9.2.3 (b), this Licence clause wasdeveloped when Sydney Water was responsible for demandand supply side planning i.e. before the creation of theSydney Catchment Authority. IPART agrees that supply sideinitiatives are not the exclusive responsibility of SydneyWater. However, Clause 9.2.2 (f) should still be complied withand reported on.

In evaluating plans and their costs, Sydney Water adopts alevelised cost approach (as part of the MCA discussed furtherfor Clause 9.2.3 (g)). The levelised cost takes into accountthe capital and operating costs as well a water savings for a30 year analysis period. The levelised cost = (NPV of cost)/(NPV of water conserved). While this does not directlycontrast with the cost of alternative supplies, it does accountfor water supplies. The supply side options are considered inthe 2006 Metropolitan Water Plan (Section 7) using a leastcost planning approach (although no details are provided).

Further, the Sustainability Planning Manual looks atalternative supplies and how they are assessed. (within thescope of the Water Balance outlined in Section 3.11 and as acriterion in the multi-criteria analysis of the SustainabilityPlanning Manual).



9.2.3 (g) Prioritise and schedule the implementation ofcourses of action found to be cost effective.

Low risk: Non-compliance mayresult in poor planning of strategiesand their implementation and lowcost-effectiveness.

Full compliance Schedule of activities arisingfrom options evaluation.

Water conservation actions are reported in Section 5 of theWCRI Report

As per subclause 9.2.3 (b), this Licence clause wasdeveloped when Sydney Water was responsible for demandand supply side planning i.e. before the creation of theSydney Catchment Authority. IPART agrees that supply sideinitiatives are not the exclusive responsibility of SydneyWater. However, Clause 9.2.2 (g) should still be compliedwith and reported on. Supply side options are consideredwithin the scope of the 2006 Metropolitan Water Plan.

A Draft Work Instruction for the Prioritisation of WaterEfficiency Programs (Options) was provided. Sydney Wateroutlined the ranking tool (also discussed in Appendix 10 ofthe WCRI report) to prioritise the most cost effective optionsfor existing (ongoing) and new programs. The ranking tool(via a multicriteria analysis undertaken through a series ofworkshops) gives consideration to the factors of utilitylevelised cost, implementation certainty, magnitude ofdrinking water savings and environmental benefit. Thesecriteria are weighted by a committee and sensitivity testing isundertaken to assist in the verification of the ranking. It isnoted that programs have not generally been dropped off thelist (once implemented) but are tailored for its ongoingoperation (once the level of benefit reduces). Sydney Waterindicated that it is currently doing research into when aprogram should be dropped off the list. The progress towardsthis should be followed up in next year’s audit.

9.2.3 (h) Identify strategies for reducing Water leakage. Low Risk: Non-compliance mayresult in low cost-effectiveness ofthe demand management strategy.

Full compliance Evidence of consideration andselection of appropriatestrategy for reducing waterleakage.

Strategies are reported in Section 4 and Appendix 8 of theWCRI Report.

Sydney Water has prepared and implemented a LeakManagement Program which consists of active leak detectionand repair, pressure management, improved response timeto main breaks and improved flow metering. Further, anassessment of the economic level of leakage (ELL) has beenundertaken which is defined as the point where the cost ofleak reduction activities equals the savings from reduceddemand.

The economic level of leakage is used to assist inprioritisation of improvement programs and is regularlyreviewed to take into account changes in the operatingenvironment.



9.2.3 (i) Include components of a water balance tableconsistent with the format and definitions in theIWA water table.

Medium risk:

Compilation of the data ensuresthat Sydney Water has a goodunderstanding of the water balancefor its area of operations.Noncompliance reduces the abilityof Sydney Water to provideresponse and improvement ifrequired.

Full compliance Data provided for each of thecomponents in the WaterBalance Table.

Water balance was reported in Appendix 8 of the WCRIReport. The Water Balance has been prepared by SydneyWater to determine the leakage from the drinking watersystem.

The analysis is in alignment with IPART requirements and inthe auditors opinion represents current industry bestappropriate practice, as noted in the audit report with respectto Part 4 of the Licence.

9.2.3 (j) Include consumption of water across sectors in aformat and content specified by IPART.

Low Risk: While reporting of dataprovides useful information it doesnot significantly impact on theability of Sydney Water to managedemand. Noncompliance will fail tokeep stakeholders informed.

Full compliance A reporting system thatcompares performance in theformat specified by IPART.

Water consumption was reported in Appendix 8 of the WCRIReport. The consumption of water for the 2008/09 period wasreported for the sectoral areas of residential (by generaldwelling type), non-residential (industrial, commercial,government, primary producers, others), recycled and Otherresidential and non-residential (billed unmetered and unbilledmetered and unmetered consumption). These data werederived in the water balance calculations (refer to Clause9.2.3i).

9.2.3 (k) For each of the demand management activities ofSydney Water in the preceding financial year,report in a schedule in a format and contentagreed between IPART and Sydney Water:

(i) The planned and actual water savings andplanned and actual expenditure; and

(ii) The actual measures of outcomes for theperformance indicator

Low risk: Non-compliance mayresult in poor understanding ofperformance and future poor cost-effectiveness of demandmanagement strategy.

Full compliance Comparison of the watersavings achieved against thatplanned in the format agreedwith IPART.

Water savings and expenditure were reported in Appendix 6of the WCRI Report. The planned and actual water savingsfor the 2008/09 period are detailed in Table 10. Information isalso provided on planned and actual expenditure and plannedand actual results for the performance indicator nominated foreach program.

No discussion is provided on the key differences between theplanned and actual parameters, although it is noted that thisdoes not represent a non-compliance but a suggestion forimproved reporting.



9.3 Reducing Discharges

9.3.1 Sydney Water must meet the Re-use watertargets set by the Minister or Sydney Water fromtime to time.

Medium Risk: Noncompliancereduces the ability for SydneyWater to provide a basis forincreased water reuse.

Full compliance Presentation of reuse achievedagainst the reuse target.

Water re use is reported in Section 4 of the WCRI Report

No direct targets have been set by the Minister or SydneyWater regarding re-use water targets. The Metropolitan WaterPlan indicates that reuse is being pursued “wherever it isfeasible and practical”. Total recycling in the marketsidentified by the plan (including residential, industrial andagricultural) is projected to be more than 70 billion litres peryear by 2015. Sydney Water has stated that to support thistarget they seek to provide recycled water schemes wherefeasible. Recycled water supplied in 2008/09 was around 27billion Litres. As outlined in Section 4.6 of the WCRI report, anumber of current and future recycled water initiatives havebeen identified. Three large schemes to be implemented bySydney Water (the Replacement Flows project, theRosehill/Camellia Recycled Water Scheme and the HoxtonPark Recycled Water Scheme) will significantly increase theamount of potable water savings.

Sydney Water acknowledged that it had identified all theobvious Recycled Water schemes and future water reuseschemes were not so viable (as they need to be self funded).Current and future proposed (and identified) schemes arelikely to take the reuse water target to around 60 billion litres,although further time and resources are required to increasethis to 70 billion litres.



9.3.2 Sydney Water must take action to generate Re-use water from the sewage or effluent ofCustomers and Consumers by intercepting orotherwise preventing the discharge of that sewageor effluent into the ocean, waterways and otherwaters.

[Note: Pursuant to Section 27(2) of the SydneyWater Act, in the Gazette of 30 June 2000 SydneyWater projected it could increase the amount ofreuse of the sewage or effluent of Customers bybetween 4 and 59 megalitres per day by 30 June2005 based on a baseline of 27 megalitres perday as at 30 June 2000.]

Medium Risk: Noncompliancereduces the ability for SydneyWater to provide a basis forincreased water reuse.

Full compliance Evidence of actions taken toencourage the interception ofsewage/ effluent releases towaterways.

Sydney Water generates or supports the reuse of sewageand or effluent through a range of measures detailed inSection 4 of the WCRI Report including:

Recycled water program (incorporating the Rouse HillRecycled Water scheme, Wollongong Recycled Waterscheme etc.)

Sewer mining programs are facilitated by the NSWGovernment and supported through Sydney Water activities.This includes free seminars and forums established by therecycled water marketing group to encourage sewer mining.Sydney Water has also developed a sewer mining guidelineand a number of successful sewer mining operations are inplace.

Sydney Water has also been encouraging others to initiate /implement recycled water schemes (such as councils) whichwould allow these parties to seek funding from alternativesources (e.g. Federal Government funding).

As detailed in Figure 8 of the WCRI report, the amount ofreuse achieved by 30 June 2005 was around 58ML/d (i.e.Sydney Water was within its’ projected target of reuse). Sincethen, Sydney Water has consistently increased the dailyrecycled water usage for successive reporting periods.

9.3.3 By no later than 1 September each year, SydneyWater must report to IPART on its progress inmeeting the Re-use water target required underclause 9.3.1 for the previous financial year, toenable IPART to consider and report on thematter as part of the Annual audit.

Low Risk: While reporting of dataprovides useful information it doesnot significantly impact on theability of Sydney Water to manageits water reuse targets

Full compliance Report outlining SydneyWater’s actions towardsachieving reuse water targets.

While no direct target has been imposed on Sydney Water byIPART, the Metropolitan Water Plan Target has generallybeen adopted by Sydney Water. As noted for Clause 9.3.1above, Sydney Water has achieved reasonable progresstowards achieving this target, although this must be reviewedin the next audit to ensure that this progress remains ontrack. (The lead time between identification of a project andits subsequent construction and implementation before theplanned water reuse is achieved is considered to besignificant).

It is noted that Sydney Water is monitoring the provision ofthird party based water reuse projects implemented underWICA and recognises the reuse benefits as contributing tothe overall improvement in reuse throughout its area ofresponsibility. The auditor considers this an appropriatemethodology/approach.


9. Licence Part 11 – Liability Issues


Part 11 of the Operating Licence requires Sydney Water to comply with specificobjectives regarding liability issues.

For the purpose of the Risk Based Audit, Licence clause 11.2 is subject to a detailed

audit by GHD. The remaining clauses for Part 11 of the Licence were subject to areview by IPART, the assessment of which will not form part of this report.

IPART in consultation with GHD has assessed the risk involved posed by each

auditable clause and what constitutes full compliance. GHD will assess the complianceof Sydney Water against these guidelines.

9.2 Liability Issues – Compliance

Compliance for Part 11, Liability Issues, is outlined in is outlined in Table 10 below.


9.3 Discussion

Sydney Water receives notification of an incident involving damage from two main

sources, either:

Identified in writing by external complainants; or

Identified internally through its works teams.

Communities potentially affected by Sydney Water‘s activities are provided with

information cards by a Customer Liaison Officer on how to report incidents. As part ofthis communication, external complainants are advised to submit claims of damage inwriting to Sydney Water.

Internally, potential claims are directed through the Customer View system. Theseincidents are recorded into the Works and Asset Management System (WAMS). Thesetypically involve damage recognised by Sydney Water work teams which are

proactively addressed prior to complaints made by the person suffering the damage.

Claims are coordinated by the Insurance Claims team. Most incidents are reviewedinternally, although claims in the order of $20,000 or above or with a degree of

complexity are externally assessed through an External Loss Adjuster.

If Sydney Water is deemed legally liable, a claim is put through to its insurer. SydneyWater also has an exgratia function where it may consider compensation for


disadvantaged community members when not legally liable to do so.

Sydney Water manages its claims through a transparent Claims Management Systems(known as STARS). STARS tracks critical claim information including:

The name of the complainant;

Date claim was received;

Diary action and date of actions;

Liability status;

Value of the liability; and

Date referred to insurer.

The system also makes provision for recording incidents that were not successfullyresolved and where EWON or the Minster has been involved.


There were no significant factors affecting compliance with the requirements of Part 11

of the licence.

9.5 Recommendations




There are no secondary recommendations required to ensure Sydney Water’s

compliance with Part 11.




11.2 Damage and Compensation to Persons

11.2 Sydney Water is required by the Act to do aslittle damage as practicable in exercising itsfunctions under Division 4 of Part 6 of the Act,and to compensate persons who sufferdamage by the exercise of those functions.

(Note Section 41 of the Act provides thatcompensation may be made by reinstatement,repair, construction of work or payment).

Moderate Risk: Noncompliancereduces the ability for SydneyWater to identify and manage itsrisks in this area.

Full compliance Demonstrate that SydneyWater has a system toidentify damage, assessliability and compensatepersons who suffer damagein an open and transparentmanner.

IPART identified thatprocesses to “limit damage”was beyond the scope of thisreview.

Sydney Water demonstrated it had an effective claimsmanagement system to:

Internally report and repair damage before it results ina complaint from the person that suffered the

damage;

Inform the community on how to make a claim ifdamage is suffered;

Review claims in a transparent manner; and

Monitor and track progress on the claim until closure.

Further discussion is provided in Section 9.3 of thisreport.


10. Concluding Remarks

The audit confirmed that Sydney Water Corporation is managing its resources toachieve Full compliance with all audited clauses of the Operating Licence. One key

recommendation (on Infrastructure Performance) provides that:

Sydney Water should:

R 4.1 Report to IPART by 30 June 2010 on its validation, sensitivity andrisk analyses undertaken in support of the new design demands andhow these changes are impacting on future licence compliance andexpenditure.


Other key comments in respect of the auditable clauses and general performance of

Sydney Water are outlined as follows:

Water Quality (Clause 3)

Part 3 of the Operating Licence requires Sydney Water to provide its customersand consumers with water of an adequate quality. Sydney Water has

demonstrated that its risk-based approach adopted to the management of watertreatment and supply, (in accordance with the framework outlined in theAustralian Drinking Water Guidelines), has ensured that drinking water is safe

to use and consume.

Infrastructure Performance (Clause 4)

Sydney Water demonstrated that its approach to meeting Licence obligations is

founded in achieving sustained performance by implementation of operationaland maintenance activities within the context of a whole of business asset andrisk management framework. The only issue of concern identified is with the

design demand rate for water supply for which the level of certainty was notwell defined.

Customer and Consumer Rights (Clause 5)

The Customer Service Indicators outlines the Schedule of Customer Service

Indicators to be reported, how Sydney Water’s performance is to be reportedand how this performance report is made available to IPART. Sydney Water

has established procedures and systems to gather data on customercomplaints and performance against customer service indicators. This systemincludes an appropriate quality assurance process.


Complaint and Dispute Handling (Clause 6)

Part 6 of the Operating Licence requires Sydney Water to have appropriateprocedures to receive and respond to complaints, and to annually report to

IPART on complaints handled. There were no recommendations for this clauseof the Operating Licence

Environment – Indicators and Management (Clause 7)

These Licence clauses are intended to establish systems, decision makingprocesses and principles that influence the environmental management ofSydney Water’s activities. In general, the environmental performance of Sydney

Water against the auditable clauses of the Operating Licence was found to beexcellent.

Water Conservation and Demand Management (Clause 9)

Sydney Water’s Demand Management Strategy is considered to be welldeveloped and implemented, including a continuous improvement planningcycle. Sydney Water has demonstrated effective adaptive management in its

continued adjustment of demand management programs towards its WaterConservation Target. This is in line with its’ requirements against the auditableclauses of the Operating Licence.

Liability Issues (Clause 11)

Part 11 of the Operating Licence requires Sydney Water to comply with specificliability issue objectives. Sydney Water has an established and transparent

Claims Management Systems, designated staff and established reportingsystems for managing its requirements in regards to liability issues.


Appendix A

Comparison of Compliance


Comparison of Sydney Water’s compliance with previousYearsThis Appendix provides a tabular comparison of the compliance levels attained by Sydney Water in the

2008/09 Audit period and over the four previous audit periods. The table also shows those clauses thatwere not included in the 2008/09 scope of work.

It is evident from Table A-1 that for the auditable Licence conditions for this audit period, Sydney Water:

Demonstrated Full compliance with those clauses audited against. In most cases, the rating of Fullcompliance is a continuation of a Full compliance in 2006/07;

Continued to achieve Full compliance with all Drinking Water Quality requirements;

Achieved Full compliance with all Infrastructure Performance requirements;

Achieved Full compliance with the Environmental – Indicators and management requirement

Achieved Full compliance with the Customer and Consumer Rights requirement

Achieved Full compliance with the Complaint and Dispute Handling requirement

Continued to achieve Full compliance with all the Water conservation and demand managementrequirements.

Achieved Full compliance with the Liability Issues requirement

Table A- 1 Operating Licence - Summary of Compliance with the previous Licence

2005-10 Operating Licence

LicenceClause

Summary of Requirement 05/06 06/07 07/08 08/09

3 WATER QUALITY

3.1 Drinking Water Quality - Standards

3.1.1(a)Comply with Australian Drinking Water Guidelines(1996) relating to Health guideline values andAesthetic guideline values.

FULL FULL FULL FULL

3.1.1(b) Comply with operating targets set out in theFluoridation Code

FULL FULL FULL FULL

3.1.2 Health guidelines will prevail where there areinconsistencies

FULL NR NR FULL

3.1.3Have regard to the concepts of good practice setout by the guidelines and must apply the conceptsas specified by NSW.

FULL FULL FULL FULL



LicenceClause


3.2 Drinking Water Quality – Monitoring

3.2.1 Prepare an Annual Drinking Water QualityMonitoring Plan by 31 March each year.

FULL Desktop NR FULL

3.2.1(a) The plan must include system performancemonitoring in the Plan to ensure quality control


3.2.1(b)The plan must have regard to the concepts ofgood practice set out by the guidelines and mustapply the concepts as specified by NSW.


3.2.1(c) The plan must include the monitoring of healthguideline values


3.2.1(d) The plan must include the monitoring of aestheticguideline values


3.2.1(e) The plan must assess the quality of drinking water FULL Desktop NR FULL

3.2.1(f)The plan must be undertaken from thecommencement date to 30 June 2006 and eachsubsequent financial year.


3.2.2 Sampling frequency and locations must berepresentative of quality of water supplied


3.3 Drinking Water Quality - Reporting

3.3.1 Make monitoring results publicly available and onwebsite and available for access free of charge

FULL FULL FULL FULL

3.3.2 Produce an Annual Drinking Water Quality Reportto NSW Health to comply with clause 3.3.1

FULL FULL FULL FULL

3.3.3 Must comply with requests from NSW Health toprovide additional information

FULL FULL FULL FULL

3.4 Drinking Water – Planning

3.4.1

Prepare a 5 year Drinking Water QualityManagement Plan within 5 months ofcommencement date. Release to the public adiscussion paper within 2 months and mustengage in public consultation.

FULL Desktop NR Desktop

3.4.2 Include Management Strategies in Plan FULL Desktop NR Desktop

3.4.3 In preparing the plan have regard to concepts ofgood practice set out in the 1996 Guidelines




LicenceClause


3.4.4

Sydney Water must prepare, and make availableto NSW Health by 1 October each year, an annualreport on the implementation of the Five YearPlan. The report must include details of:

NR FULL FULL FULL

3.4.4(a) Prepare a report on any proposed amendments NR Desktop FULL FULL

3.4.4(b) Prepare a report on any additional water qualityimprovements

NR Desktop FULL FULL

3.5 Drinking Water - Incident Management

3.5.1 Immediately report to NSW Health any informationor event which may have risk for public health.


3.5.2 Maintain Incident Management Plan FULL Desktop NR FULL

3.5.3 Incident plan must contain procedures andprotocols for managing incidents


3.5.4When preparing the incident plan, have regard tothe concept of good practice set out in the 2006Guidelines


3.6 Other Grades of Water

3.6.1 Supply other grades of water according to relevantguidelines

FULL FULL FULL FULL

3.6.2 Other grades supplied does not include drinkingwater but does include re-use water

NR NR NR NR

3.6.3 Minister to resolve any conflict NR NR NR Desktop

4 INFRASTRUCTURE PERFORMANCE

4.1 Water Pressure Standard NR NR FULL(4.1.1)

Desktop

4.2 Water Continuity Standard NR NR FULL(4.2.1)

Desktop

4.3 Sewage Overflows on Private PropertyStandard

NR NR FULL(4.3.1)

Desktop

4.4 Compliance with Performance Standards

4.4Comply with water pressure standard (4.1.1), thewater continuity standard (4.2.1) and sewerageoverflow standard (4.3.1)

FULL FULL NR FULL



LicenceClause



4.5.1By 1 September each year, must provide report toIPART on compliance with water pressure, watercontinuity and sewerage overflow standards


4.5.2

By 1 September each year, must provide report toIPART on the number of properties that financialyear that experienced water pressure failure,interruptions or uncontrolled sewerage overflow.


4.5.3 Must maintain record systems sufficient to enableperformance measurements against standards


4.5.4 Must provide IPART with electronic access torecords.


4.6 Review of system performance standards

4.6.1IPART and Sydney Water to report to minister onwhether amendments should be made to thestandards

NR Desktop NR Desktop

4.6.2 The report under clause 4.6.1 must includeanalysis of benefits and costs of any amendments


4.6.3 Minister may publish the amendments in the NSWGovernment Gazette


4.6.4 Any amendments to performance standards to beincorporated into customer contract.


4.7 Service quality and system performanceindicators

4.7.1Must maintain record systems to sufficientlyenable measurement against performanceindicators in schedule 1.


4.7.2 Where there is inconsistency, the decision ofIPART will prevail

NR Desktop NR NR

4.7.3By 1 September each year must report to IPARTperformance against service quality and systemperformance standards


4.7.4 Must provide IPART with electronic access torecords.




LicenceClause



4.8(a)Must ensure assets are managed consistent withterms and conditions of licence, obligations undercustomer contract and applicable laws

NR Desktop NR FULL

4.8 (b) Must ensure assets are managed consistent withthe lowest life cycle cost and acceptable risk


4.8 (c) Must ensure assets are managed consistent withthe whole life of the assets


4.8 (d)

Must ensure assets are managed consistent withits assessment of the risk of loss of the assets,and capacity to respond to potential failure orreduced performance.


4.9 Reporting on Asset Management System

4.9.1 At least once report to IPART on the state of eachgroup of assets

NR Desktop NR NR

4.9.2(a) Report must include description of the processes,practices and plans used to manage assets

NR Desktop NR FULL

4.9.2(b) Report must include description of each assetgroup

NR Desktop NR FULL

4.9.2(c) Report must include assessment of expectedcapacity of the assets

NR Desktop NR FULL

4.9.2(d)Report must include assessment of major issuesor constraints on current/future performance of theassets

NR Desktop NR FULL

4.9.2(e) Report must include strategies and expectedcosts of future investment in assets

NR Desktop NR FULL

4.9.2(f)Report must include progress in implementing themanagement of assets and any recommendedimprovements

NR Desktop NR FULL

4.9.2(g) Report must include such other mattersreasonably required by IPART

NR Desktop NR FULL

4.10 Auditing the Asset Management System

4.10.1 At least once IPART may conduct an audit ofcompliance with clauses 4.8 and 4.9

NR NR NR NR



LicenceClause


4.10.2IPART may audit compliance for the purpose ofinvestigating, reviewing or reporting on the pricingof services under the IPART Act

NR NR NR NR

4.10.3An audit undertaken under clause 4.10.1 or 1.10.2must comply with the scope and auditspecifications determined by IPART

NR NR NR NR

4.10.4 The provisions of clause 12 apply to audit under4.10

NR NR NR NR

4.10.5The Minister must be advised of any suchdecision to audit and provided with a report on it’soutcomes

NR NR NR NR

4.11 Water Leakage

4.11.1 Must ensure that by 30 June 2009, water leakagedoes not exceed 105 mega litres a day

NR NR NR FULL

4.11.2 Must calculate level of water leakage using IPARTapproved methodologies and assumptions

FULL FULL NR FULL

4.11.3(a)

By 1 September each year report to IPART oneconomic level of water leakage and how level iscalculated

FULL NR NR FULL

4.11.3(b)

By 1 September each year report to IPART onprogress towards compliance with clause 4.11.1

FULL NR NR FULL

4.12 Reports related to water leakage

4.12.1 By 1 September each year report to IPART onbulk water meters in the drinking water system

FULL FULL NR FULL

4.12.2By 1 September each year report to IPART onwater pressure control zones in the drinking watersystem

FULL NR NR FULL

4.12.3By 1 September each year report to IPART onbursts, breaks or leaks which occurred and timetaken to repair

FULL NR NR FULL

4.12.4 By 1 September each year report to IPART onreticulation mains and reservoir zones

FULL NR NR FULL

4.13 Response time for Water mains breaks

4.13.1 Response times to water main breaks and leaks MOD FULL FULL FULL



LicenceClause


4.13.2Categorisation of Priorities 4,5,6 is to be finalisedby IPART and published on Sydney WaterWebsite

NR NR NR Desktop

4.13.3By 1 September each year report to Minister andIPART on number of breaks and leaks andperformance against targets in clause 4.13.1

FULL FULL NR FULL

4.13.4Annually submit to IPART list of all instances ofnon-compliance with target and reasons for non-compliance

FULL FULL FULL FULL

4.14 Priority Sewerage

4.14.1 Meet requirement of ‘Priority Sewerage Program’:

4.14.1 (a) By June 2009 connect to all available lots eligiblefor connection under Stage One

NR Desktop NR FULL

4.14.1 (b) By June 2009 report to the Minister on service toMenangle/Menangle Park


4.14.1 (c)By June 2009 commence work to permitconnection to 30% of lots eligible for connectionunder Stage Two

NR Desktop NR FULL

4.14.2 Advise Minister of delays in meeting Targets NR Desktop NR NA

4.14.3 By 1 September each year report to IPART onprogress towards compliance with clause 4.14.1


4.14.4 Stage 1 Priority Sewerage Program explanation NR Desktop NR NR

5 CUSTOMER AND CONSUMER RIGHTS

5.1 Customer contract

5.1.1 The Customer Contract may only be varied inaccordance with the Act

NR Desktop NR NR

5.1.2 The Customer Contract automatically applies topersons specified in the Act

FULL Desktop NR NR

5.1.3 The Customer Contract is to set out the rights andobligations of customers and Sydney Water

FULL Desktop NR NR

5.1.4A copy of the Customer Contract, and anyvariations to it must be posted on Sydney Water’swebsite


5.1.5 Sydney Water must initiate an independent reviewof the Customer Contract

NR Desktop NR NR



LicenceClause


5.1.6

By the completion of the review, IPART mustproduce a report setting out its finding andrecommendations and provide copy to theminister.

NR Desktop NR NR

5.1.7Within three months of the ministers adoption ofthe review report, Sydney Water must issue anamended Customer Contract

NR Desktop NR NR

5.1.8 Sydney Water must prepare a pamphlet HIGH Desktop NR Desktop

5.1.8(a) Provides a brief explanatory introduction to theCustomer Contract;


5.1.8(b)Summarises the key rights and obligations ofCustomers, under the Customer Contract FULL Desktop NR

Desktop

5.1.8(c) Refers to the types of account relief available forCustomers experiencing financial hardship


5.1.8(d)Contains a list of Sydney Water's local offices andemergency contact numbers in its Area ofOperations.

HIGH Desktop NR Desktop

5.1.9 The pamphlet must be updated and disseminatedfree of charge


5.1.9(a) Customers, at least once annually with theirquarterly or other bills


5.1.9(b) Any other person on request FULL Desktop NR Desktop

5.1.10 Sydney Water may enter into other contracts orarrangements for the supply of services

FULL Desktop NR NR

5.2 Consumers

5.2Must fulfil obligations under customer contractsrelating to compliant handling and resolutionprocedures


5.3 Code of Practice and Procedure on Debt andDisconnection

5.3.1 Develop a code of practice and procedure on debtand disconnection


5.3.2(a) Provide for deferred payment or payment byinstalment options for consumption bills




LicenceClause


5.3.2(b) Provide for the payment options referred to in (a)to be advised in consumption bills


5.3.3 Include the code of practice and procedure ondebt and disconnection in its Customer Contract


5.3.4(a) Disseminate information to Customers at leastonce annually with their quarterly or other bills


5.3.4(b) Disseminate information to any other person onrequest


5.4 Customer Councils

5.4.1 Establish and regularly consult with one or moreCustomer Councils


5.4.2 A Customer Council may be utilised by SydneyWater to provide high quality advice


5.4.3 Members must be appointed consistent with thelicence


5.4.4 Membership must include the specified groups HIGH Desktop NR Desktop

5.4.5 Sydney Water may require members to serve onmultiple Councils


5.4.6(a) Council must comprise members of any customercouncil prior to the Commencement Date


5.4.6(b)Council must comprise any other personappointed by Sydney Water, consistent withclause 5.4.4


5.4.7 Term of members is two years NR Desktop NR Desktop

5.4.8 Half the members of a Council must be newmembers


5.4.9 No person may have more than two consecutiveterms


5.4.10 Appointments for the remaining term of theCouncil is possible if a position becomes vacant


5.4.11 If members of a Council are not individuals 5.4.8.and 5.4.9 do not apply


5.4.12Existing members will be eligible to be appointedfor one term and other members for 2 consecutiveterms




LicenceClause


5.4.13 Development of a Customer Council Charteraddressing the specified issues within 3 months


5.4.13 (a) The role of the customer council. FULL Desktop NR Desktop

5.4.13 (b) Selection criteria on how members will be drawnfrom the community.


5.4.13 (c) Information on how the customer council willoperate.


5.4.13 (d) Induction processes for new members. HIGH Desktop NR Desktop

5.4.13 (e) A description of the type of matters that will bereferred to the customer council.


5.4.13 (f) Procedures for the conduct of customer councilmeetings


5.4.13 (g) Communicating the outcome of the customercouncil’s work to Sydney Water.


5.4.13 (h) Procedures for tracking issues raised andensuring appropriate follow-up of those issues.


5.4.13 (i)Funding and resourcing of the customer councilby Sydney Water including sitting fees andexpenses for members.


5.4.14There must be a charter for each customercouncil. A single Customer Council Charter maybe applied to other Councils


5.4.15 Provide the necessary information to enable theCouncil to discharge its tasks


5.4.16

Report annually on the issues considered by, andachievements, of each customer council. A Copymust be provided on the website for downloadingfree of charge and made available for collectionfree of charge.


5.5 Customer Service Indicators

5.5.1Must maintain record systems to sufficientlyenable measurement against indicators inschedule 2.

HIGH Desktop NR FULL

5.5.2 Report to IPART performance against indicators inschedule 2 by 1 September each year




LicenceClause


5.5.3 Report must include analysis of problems of asystematic nature


5.5.4 Sufficient compliance if report is integrated intoreport required under clause 4.7.3

FULL Desktop NR NR

6 COMPLAINTS AND DISPUTE HANDLING


6.1.1 Establish and Maintain Internal complaint handlingprocedures


6.1.2 Must be based on Australian Standard AS4269-1995


6.1.3 Must make available information concerningInternal complaint handling procedures


6.1.4Must provide information in clause 6.1.3 tocustomers through their bills at least onceannually


6.2 External Dispute Resolution Scheme

6.2.1 Must establish or be a member of an industrybased dispute resolution scheme


6.2.2 Dispute scheme established by Sydney Water issubject to Ministers Approval


6.2.3 Prepare a pamphlet to explain scheme and how itoperates


6.2.4 Must provide information to customers throughtheir bills at least once annually


6.2.5 Provide IPART with written reports of thedeterminations made by the body


6.2.6Must report each year to IPART on the numberand type of complaints received, including thefollowing information:


6.2.6(a)

The number and types of complaints received bythe dispute resolution body, classified inaccordance with the dispute resolution body’sreporting arrangements.


6.2.6(a) Any other relevant information required by IPARTto be included in the report.




LicenceClause


6.2.7 The report in clause 6.2.6 must be made availableto the public free of charge


6.3 Complaints to other bodies

6.3.1By 1 September each year report to IPART on allcomplaints made that were referred for resolutionby an external body


6.3.2By 1 September each year report to IPART on allcivil actions brought in all courts where personsought damages or other relief


6.3.3 The reports required under clauses 6.3.1 and6.3.2 must contain the following information:


6.3.3(a) The number and types of matters. HIGH Desktop NR Desktop

6.3.3(b) The outcome of the matters. FULL Desktop NR Desktop

6.3.3(c) If the matters were subject to a negotiatedsettlement, how they were settled.


6.3.3(d) Any problems of a systemic nature arising fromthe matters or which the matters uncovered.


6.3.3(e) Any other information that IPART may reasonablyrequest.


7 ENVIRONMENT – INDICATORS AND MANAGEMENT

7.1 Environmental Indicators

7.1.1 Monitor, compile data and report on environmentalperformance indicators


7.1.2 By 1 September each year report on performanceagainst the indicators


7.1.3 The Report to enable a year to year comparison HIGH Desktop NR FULL

7.1.4The Report to be made publicly available free ofcharge at Sydney Water offices and on thewebsite


7.2 Environmental Management

7.2.1Must have in place an environmentalmanagement system certified to AS/NZS ISO14001 to manage environmental risk




LicenceClause


7.2.2 By 1 September produce a 5-year EnvironmentPlan


7.2.3 Must engage in public consultation in developingthe Environment Plan

FULL Desktop NR NR

7.2.4(a) The Plan must contain details of theenvironmental improvement program


7.2.4(b) The Plan must endorse ESD principles FULL Desktop NR FULL

7.2.4(c) The Plan must be integrated into business plans FULL Desktop NR FULL

7.2.4(d) The Plan must incorporate the energymanagement plan


7.2.4(e) The Plan must incorporate targets & time tablesfor achievement over term of Plan


7.2.5 The Plan must be posted on the website andmade available for collection free of charge


7.2.6

Compile report, detailing progress in meeting Planand complying with targets and timetables. Thereport must be posted on the website and madeavailable for collection free of charge


7.2.7 Review the Plan consulting with DEC, DIPNR,IPART and peak environmental groups.


7.3 Potable Water Use

7.3.1Ensure that potable water use for treatmentprocesses has been reduced by 80% by 30 June2009

NR Desktop NR FULL

7.3.2By 30 June 2009 ensure that specific seweragetreatment plants use at least 85% recycled waterfor treatment processes

NR Desktop NR FULL

7.3.3 Must undertake potable water efficiency audits atspecific sewerage treatment plants

NR Desktop NR FULL

7.3.4 By 1 September each year, report to IPART onprogress in relation to clause 7.3.1, 7.3.2, 7.3.3


7.4 Metering of Individual Units

7.4.1(a)Within 9 months of commencement, must conductat least one trial to determine costs and benefits toproviding individual meters

FULL FULL NR Desktop



LicenceClause


7.4.1(b)Within 9 months of commencement, evaluateoutcomes of the trial and provide a report to theminister outlining the outcomes

NR FULL NR Desktop

9.0 WATER CONSERVATION AND DEMAND MANAGEMENT


9.1.1Take action to reduce water quantity (other thanre-use water) from all sources to 329L/day/capitaby 2010/2011


9.1.2 In assessing compliance make reasonableadjustments for the effects of weather


9.1.3 Report to IPART by 1 September every yearprogress towards clause 9.1.1 target



9.2.1Consider demand side management for planningfuture services including addressing waterleakage

FULL FULL FULL FULL

9.2.2 Provide Demand Management StrategyImplementation Report by 1 September each year

FULL FULL FULL FULL

9.2.3(a) The Report must estimate past, current andprojected water uses and distinguish users

FULL FULL FULL FULL

9.2.3(b) The Report must describe supply deficiencies FULL FULL NR FULL

9.2.3(c) The Report must identify conservation measures FULL FULL FULL FULL

9.2.3 (d) The Report must describe, cost and evaluateadditional conservation measures

FULL FULL FULL FULL

9.2.3 (e)The Report must describe future plans for waterreclamation & strategies to alter water usepractices

FULL FULL FULL FULL

9.2.3 (f) The Report must evaluate cost of plans andalternatives

NR FULL NR FULL

9.2.3 (g) The Report must prioritise and schedule theimplementation of courses of action

FULL FULL NR FULL

9.2.3(h) The Report must identify strategies for reducingwater leakage

FULL FULL FULL FULL



LicenceClause


9.2.3(i) The Report must include components of a waterbalance table

FULL FULL FULL FULL

9.2.3(j) The Report must include consumption of wateracross all sectors

FULL FULL FULL FULL

9.2.3(k)

The Report must for each demand managementinclude planned and actual water savings andplanned and actual expenditure and actualmeasures for performance indicators.

FULL FULL FULL FULL

9.2.4 Engage third party to verify mathematical modelsfor future water demand

FULL NR NR NR

9.3 Reducing Discharges

9.3.1Sydney Water must meet the Re-use watertargets set by the Minister or Sydney Water fromtime to time.

NR Desktop NR FULL

9.3.2 Take action to generate Re-use water from thesewage or effluent


9.3.3By 1 September each year, report to IPART onprogress in meeting the Re-use water targetrequired under clause 9.3.1

NR Desktop NR FULL

9.4 Water Conservation Rating and Labelling

9.4.1 Encourage manufacturers to improve water useefficiency of appliances


9.4.2 By 1 September each year, report to IPART on itsperformance under clause 9.4.1


9.5 Review of Part 9 of Licence

During this Licence IPART may review Part 9 ofthe Licence if the Minister directs it to do so.

NR NR NR NR

11 LIABILITY ISSUES

11.1 Contracting Out NR NR NR NR

11.2 Damage and Compensation to persons NR NR NR NR

Sydney Water is required by the Act to do as littledamage as practicable in exercising its functionsunder Division 4 of Part 6 of the Act, and tocompensate persons who suffer damage by theexercise of those functions

NR NR NR FULL



LicenceClause


11.3 Competitive neutrality NR NR NR NR

12 OPERATIONAL AUDITS OF THIS LICENCE

12.2 What the Audit Report is on

12.2.1(b) Sydney Water’s Implementation of anyMemorandum of Understanding

MOD Desktop NR NR


Appendix B

Key Documents Referenced During Audit


Part 3

Fluoride Test Results, July 2008, Sydney Water Corporation

Fluoride Test Results, August 2008, Sydney Water Corporation

Fluoride Test Results, September 2008, Sydney Water Corporation

Fluoride Test Results, October 2008, Sydney Water Corporation

Quarterly Monitoring Report on Drinking Water Quality for NSW Health, 1 April 2008 – 30 June 2009,version 1, Sydney Water Corporation

Fluoride Test Results, November 2008, Sydney Water Corporation

Fluoride Test Results, December 2008, Sydney Water Corporation

Fluoride Test Results, January 2009, Sydney Water Corporation

Fluoride Test Results, February 2009, Sydney Water Corporation

Fluoride Test Results, March 2009, Sydney Water Corporation

Fluoride Test Results, April 2009, Sydney Water Corporation

Fluoride Test Results, May 2009, Sydney Water Corporation

Fluoride Test Results, June 2009, Sydney Water Corporation

Water Conservation and Recycling Implementation Report, 2008 – 09, Sydney Water Corporation

Compliance Checking Facility, Report 1/10/2008 to 30/10/2008, Sydney Water Corporation

2008 Drinking Water Quality Exercise, Exercise Rainbow Report, October 2008, MMC

Project Update: Implementation of AGWR 2006_Operational schemes

Recycled Water Irrigation Schemes, Annual Compliance Report – 1 July 2008 to 30 June 2009, Sydney

Water Corporation

Final Minutes 12 May 2009, Joint Operational Group (JOG)

Recycled Water (Residential) Rouse Hill Scheme Compliance Monitoring, Annual Report to NSW Health– 1 July 2008 to 30 June 2009, Sydney Water Corporation

Wollongong Stage 2 – RWQMP Implementation Plan: Status Update: June 09, Sydney Water

Corporation

Recycled Water Quality Management Plan, Wollongong Stage 2 Recycled Water Scheme, June 2008,


EMS Long Term STP Network Calibration Schedule to 30th June 2010, Sydney Water Corporation

Recycled Water (Industrial) BlueScope Steel Supply Scheme Compliance Monitoring, Annual Report toNSW Health – 1 July 2008 to 30 June 2009, Sydney Water Corporation


Recycled Water (Industrial) Wollongong Stage 2 Scheme (Port Kembla Coal Terminal), ComplianceMonitoring, Annual Report to NSW Health – 1 April 2009 to 30 June 2009, Sydney Water Corporation

Part 4

Asset Management, Growth Planning 2008, Overview of System Planning Process, Sydney Water Asset

Planning, June 2009

Guidelines for DSP Review 2008 System Plans, DSP08_06, Sydney Water, June 2008

Asset Management Quality Management System - Documents and Records Management Procedure,

Sdyney Water, Standard Administrative Procedure, July 2009

State of Assets 2008

Strategic Asset Mgt Framework

Halcrow report on Asset Mgt Systems

Overview of Asset Mgt Planning (powerpoint preso)

Sewers Asset Plan "2009_10 Sewers AMP - Final.pdf"

Avoid Fail sewers Business Case "AF Board Paper approval & Business Case April 08.pdf"

Avoid Fail decision framework "AFS_Decision Framework_Aug 2009.doc"

Avoid Fail sewers Condition / Risk assessment spreadsheet

"Business Case Approval Reconciliation March 08 adjusted for IPART Allocation r.pdf"

Sewers Condition Assessment work program "Avoid Fail Condition Assessment Program 09_10.xls"

Copy of PIfastcalcs waterbalance results for 08-09.

Operational completion checklist for the bulkwater flowmeter program for 08-09

Economic Level of Leakage forecast for 2009-10 to 2013-14.

Water Pressure Management Program Business Case Stage 4. This is the latest justification which arose

due a requirement from the Board to report back in April this year re benefits realisation.

Wastewater breakdown maintenance task codes

Folio of progress – Sewer Overflow standard

Copy of SQL code for E13 NWI

Folio of progress – Water Continuity Standard

Copy of Exceptions List for reasons for priority 4.


Parts 5 and 6

Customer Contact Centre – Training Agenda, Sydney Water Corporation

Complaint Standards AS ISO 10002-2006, Compliance Report, June 2009, Sydney Water Corporation

Contact Centre training tools

Properties with multiple restrictions during 2008-09 pdf attached)

Reasons for staff shortage at Contact Centre in Oct , Nov and Dec 2008 and what strategies are in place

for future occurrences

Measures Sydney Water are undertaking to manage odour problems as a result of a severe shortage ofchemicals

Part 7

SWEMS Environment Plan 2008 – 2013 Progress Report, Sydney Water Corporation

Operating Licence Compliance Report Schedule 3 Environmental performance indicators 2007–08, andDRAFT 2008–09 report

Copy of Schedule 3 from OL highlighted to show indicators with 10 years data available

Sydney Water Environmental Management System (SWEMS) certificate of compliance with AS/NZISO14001

Sydney Water, SWEMS Periodical Audit P1 Report (–4 December 2008)

SWEMS0053 Sydney Water 2008-2013 Environment Plan

SWEMS0004 Environmental Planning Procedure

BMIS record of control and review – SWEMS0053 Sydney Water 2008-13 Environment Plan

SWEMS0053.03 Environment Plan Progress Report template – colour coded for strategies and

environmental aspects

SWEMS0044 Environment Policy

SWEMS0010 Monitoring and Measurement Procedure

2008-09 Sustainability Corp/Divisional Plan 4th Qtr report, Asset Solutions and Operations BusinessPlans

SWEMS0050 Energy Management Plan 2004/05 – 2009/10

Notification email from Corporate Communications for Environmental Plan on website.

SWEMS0053.02 Sydney Water Environment Plan 2007–2012 Progress Report

2008 MD letter to IPART for submission of: Operating Licence Compliance Report Schedule 3

Environmental Performance Indicators 2007-08; and Environment Plan Progress Report 2007-08


2008 Annual Report webpage – Appendices including 2007–2012 Environment Plan Progress Reportand Schedule 3 Report 2008

BMIS record of control - SWEMS0053.01 Sydney Water Environment Plan 2007–20012 Progress Report

2008–09 Letters to stakeholders re publication of Annual Report, inviting comment on Environment PlanProgress Report.

Annual folios for 2007–08 and 2008–09 Environment indicators and Environment management from

Corporate compliance system

List of Sydney Water Business Plans and environment plan actions

File note regarding stakeholder feedback on Environment Plan Progress Report

SWEMS0004.04 Sydney Water Environment Plan 2008-2013 Progress Report DRAFT

Independent verification statement from Net Balance Management Group Pty Ltd, following review of the'Operating Licence Compliance Report: Schedule 3 Environmental Performance Indicators 2008-09' and

the 'Sustainability Indicators Report' for the 'Annual Report 2008-09'

Part 9

Sydney Water Corporation Operational Audit, October 2008, Cardno and Atkins.

Environment Plan 2009 – 2014, Sydney Water’s objectives and actions to manage and improveenvironmental performance, Sydney Water Corporation

Sydney Water Corporate Plan 2008 – 09 to 2012 – 13, Sydney Water Corporation

Sustainable Division Business Plan, 2008/2009, Sydney Water Corporation


Metropolitan Water Plan – Chapter 6, Reducing demand, 2006, Sydney Water Corporation

Metropolitan Water Plan – Chapter 7, Increasing supply, 2006, Sydney Water Corporation

Sustainability Planning Manual, August 2009, Sydney Water Corporation

(Draft) Work Instruction, Prioritisation of Water Efficiency Programs (Options), May 2009, Sydney Water

Corporation

Trade Waste Policy, Sydney Water Corporation

A new direction for NSW, State Plan, NSW Government

Corrective Amendment to Sydney Water’s Climate Corrected Demand Model, Engineering & PlanningServices, July 2009, PB MWH Joint Venture

Review of Consumption for Sydney Water Corporation, March 2008, McLennan Magasanik Associates

Folio of Progress, Annual Folio Update, Sydney Water Corporate Compliance Program, September


2009, Sydney Water Corporation

Water Conservation Strategy, 2009 – 10, Sydney Water Corporation

Macquarie Park Corridor, Level 3 Area Plan, SewerFix Wet Weather Alliance, August 2009, Sydney

Water Corporation

Operating Licence Compliance Report, Annual Report 2008 – 09, Sydney Water Corporation

Average Residential Demands in 2031 for Design and Planning, Strategy Directions, January 2009,


Backflow Prevention Containment Policy, Sydney Water Corporation

Sydney Water’s participation in Energy Australia’s Smart Village Trial, Business Case for Approval ofExpenditure, Sydney Water Corporation

Smart Metering Residential Study, Business Case for Approval of Expenditure, Sydney Water

Corporation

Metering Project – Multi-Unit Individual Metering, Business Case, Sydney Water Corporation


Review of Sewer Discharge Factor for Shopping Centres, August 2008, Sydney Water Corporation

Water Continuity Plan, Maintenance of Water Supply During Major Incidents and Emergencies, StandardAdministration Procedure, May 2007, Sydney Water Corporation

Trade Waste Policy, Sydney Water Corporation

Term 2 Report Card, Every Drop Counts in Schools, Sydney Water Corporation

Emergency Response Plan, 2008, Sydney Water Corporation

Sustainability Division Business Plan, 2009/2010, Sydney Water Corporation

(Letter, 13 March 2009) Energy Australia & Sydney Water’s Newington Smart Village – Energy andWater Management Solutions for the Future, NSW Climate Change Fund Application, Sydney Water

Corporation

Plumbers seminar agenda, November 2008, Sydney Water Corporation

Plumbers seminar agenda, May 2009, Sydney Water Corporation

(Letter, 3 June 2009) Sydney Water Corporation (SWC) – Leakage Target and Demand ManagementReporting in SWC’s Operating Licence

Sydney Water Corporate Plan 2008 – 09 to 2012 – 13, Sydney Water Corporation

Final Minutes of the Drought Executive Committee, 25 February 2009, Sydney Water Corporation

Peak Demands in Planning Water Systems, Sydney Water Corporation


Appendix C

Stakeholder Consultation


The following parties were contacted by both phone and email to comment on the auditable obligationsof Sydney Water to the stakeholder under the Operating Licence however no response was received:

DECCW which incorporates the applicable roles from DNR and DEC

NSW Health


GHD

133 Castlereagh St Sydney NSW 2000-

T: 2 9239 7100 F: 2 9239 7199 E: [email protected]

© GHD 2009

This document is and shall remain the property of GHD. The document may only be used for the purpose

for which it was commissioned and in accordance with the Terms of Engagement for the commission.Unauthorised use of this document in any form whatsoever is prohibited.

Document Status

Reviewer Approved for IssueRevNo. Author

Name Signature Name Signature Date

A Emma Every

MauricePignatelli

Keryn Hassall

PeterNadebaum

Tom Carpenter

Emma Every

MauricePignatelli

Ross Woodward

Tom Carpenter

Ross Woodward 02/10/2009

B As above As above Ross Woodward 23/10/2009

0 As above Ross Woodward Ross Woodward 9/11/09

C Sydney Water 2008/09 Statement of Compliance

