Annual Report - Sydney Water

1 ReportAnnual 2016 17 Letter to Shareholder MinistersDear Treasurer and Minister DominelloReport on performance for the year ended 30 June 2017We are pleased to submit the Annual Report of Sydney Water Corporation ( Sydney Water ) for the year ended 30 June 2017 for presentation to Parliament. Our Annual Report 2016 17 was prepared in accordance with the requirements of section 24A of the State Owned Corporations Act 1989 and the Annual Reports (Statutory Bodies) Act 1984. The financial statements, which form part of the Annual Report 2016 17, have been certified by the Auditor-General of New South sincerely, Bruce Morgan Kevin Young Chairman Managing Director BComm, FCA, FAICD BEng (Hons), MBA, FIE Aust, CPENG, FAICDS ydney Water Annual Report 2016 17 / 1 ContentsLetter to Shareholder Ministers 11. Overview 5 About Sydney Water 6 About us 6 Our area of operations 8 The year in review 9A message from our Chairman and our Managing Director 9 Top achievements 11 Corporate Strategy update 12 Strategic success measures our performance 122.

2 Corporate governance 15 Our Corporate Governance Framework 16 Board of Directors 16 The Board s role and responsibilities 16 Director independence 17 Indemnity and insurance 17 Board of Directors skills matrix 17 Sydney Water Board Directors 18 Committees 21 Board meetings 22 Organisation chart 233. Our performance 25 Our sustainability performance indicators 26 Customer satisfaction 26 Social assistance 27 Service quality and system performance 28 Water drawn 29 Recycled Water 29 Water conservation 30 Water leakage 30 Water quality 30 Infrastructure management 31 Financial performance 33 Our staff 33 Wastewater treatment system discharges 35 Trade waste agreements 35 Environmental compliance 36 Heritage compliance 36 Environmental footprint 37 Energy use and greenhouse gas emissions 38 Environmental performance monitoring 38 Flora and fauna 39By-products 40 Waste reduction 40 Our performance 41 Our customer commitments 41 Multicultural

3 Policies and services program 43 Community investments 45 Promotional activity 46 Privacy 472 / Sydney Water Annual Report 2016 17 Our workforce 47 Workforce diversity 49 Staff and industrial relations 52 Consultant engagements 53 Overseas travel 53 Our activities 55 Research and development 59 Risk management 61 Insurance 62 Legal events 62 Heritage delegation actions 63 Threatened species plans of management 64 Statement on the implementation of our special objectives 664. Financial statements 79 Financial performance summary 80 Reporting exemptions 83 Pricing 83 Auditor-General s statutory audit Report 88 Directors Declaration 88 Independent Auditor s Report 89 Financial statements for the year ended 30 June 2017 91 Appendixes 155 Appendix 1: Government Information (Public Access) Act 2009 156 Appendix 2: Public interest disclosures 161 Appendix 3: Annual Report external production costs 162 Appendix 4: Statutory information index 162 Appendix 5: Index of figures, maps and tables 163 Appendix 6: Glossary 1672 / Sydney Water Annual Report 2016 17 Sydney Water Annual Report 2016 17 / 3 Chapter 1.

4 OverviewAbout Sydney WaterAbout us We re Australia s largest Water and wastewater service provider, and our customers are at the heart of everything we do. We provide safe, refreshing drinking Water to almost five million customers across Sydney , the Blue Mountains and the Illawarra. We also look after wastewater, recycled Water and some stormwater services to ensure our rivers are healthy and beaches are clean. We re an organisation focused on the future, and we work with our stakeholders and regulators to make smart business decisions that ensure we re doing our part to enhance our city s sustainability and lifestyle, now and for years to come. We are a statutory State Owned Corporation, wholly owned by the NSW Government. Our performance targets and service standards are set out in our Operating Licence 2015 2020, which is governed by the Independent Pricing and Regulatory Tribunal (IPART).

5 We operate under the Sydney Water Act 1994, which assigns our principle objectives. These are to: protect public health protect the environment be a successful purpose, mission and vision We re a world-class organisation, delivering essential services our customers love, in our great city. Our vision is to be the lifestream of Sydney for generations to Overview / Sydney Water Annual Report 2016 17 Table 1: Principal statistics, 1 July 2016 to 30 June 2017 Approximate area of operations12,700 square kilometresEstimated population serviced by drinking water5,037,000 peopleQuantity of drinking Water we produced 551,406 million litresLength of drinking Water mains we own and operate21,951 kilometresNumber of drinking Water reservoirs in service243 drinking Water reservoirsNumber of drinking Water pumping stations in service151 drinking Water pumping stationsNumber of properties with drinking Water service available1,936,814 propertiesEstimated population receiving wastewater services4,944,000 peopleWastewater we collected (includes discharge, bypass, overflows and other)

6 564,154 million litresLength of wastewater mains we own and operate25,597 kilometresNumber of wastewater treatment plants116 wastewater treatment plantsNumber of wastewater pumping stations in service684 wastewater pumping stationsNumber of properties with wastewater service available 1,888,745 propertiesEstimated population serviced by recycled water287,000 peopleQuantity of recycled Water we supplied38,339 million litresLength of recycled Water mains we own and operate706 kilometresNumber of Water recycling plants14 Water recycling plantsNumber of recycled Water reservoirs in service9 recycled Water reservoirsNumber of recycled Water pumping stations in service10 recycled Water pumping stationsLength of stormwater channels we control447 kilometresNumber of properties with stormwater drainage available605,775 properties1 The number of wastewater treatment and recycled Water plants is based on Sydney Water s The population serviced by recycled Water refers to Rouse Hill only and is an estimate at June Overview / Sydney Water Annual Report 2016 17 Sydney Water Annual Report 2016 17 / Overview 7 OverviewCorporate governanceOur performanceFinancial statementsAppendixesOur area of operations Figure 1: Map of our area of operations8 Overview / Sydney Water Annual Report 2016 17 The year in review A message from our Chairman and our Managing DirectorGreater Sydney is going through a time of unprecedented growth and change.

7 Over the next 20 years, another million people3 will live here, and the pressures on our existing resources, housing and infrastructure will only increase. The last 12 months have brought challenges, but also opportunities to shape our future and enhance our city s sustainability and lifestyle. This means we must think differently about how we operate and deliver services, while continuing to run an efficient business and deliver value for our customers and stakeholders. We know this won t happen without strong, effective stakeholder engagement. We see our role as master planners, and we re working with the NSW Government and other key stakeholders to develop a long-term strategy to guide our business to 2040 and beyond. We re also investing now to support our city s growth, build resilience across our business and meet increasing customer expectations.

8 In October 2016, we announced a $ billion investment to build new infrstructure and upgrade existing assets, with Western Sydney as a key focus. We re spending almost $73 million on essential infrastructure for more than 27,500 new homes in Sydney s North West Growth Centre (NWGC). We re also spending $300 million on our Lower South Creek Treatment Program which will provide new and upgraded wastewater infrastructure for more than half a million people by continue to work closely with agencies such as the Greater Sydney Commission, providing input and expertise that focuses on three key priorities for success productivity, liveability, and sustainability. Water planning, Water use and Water -sensitive urban design are essential factors in ensuring we meet these priorities. Advances in technology mean our customers expectations are growing, and we re investing more to build business capability, remove inefficient processes and enable our customers to interact with us how and when it suits them.

9 We are also working to replace our ageing billing system and various customer management systems with our Customer Experience Platform (CxP). This will simplify processes across the organisation, and enable smarter decision-making through deeper customer are building a high-performing, capable and safe workforce to help us shift our organisation s focus from assets to customers. This year we introduced our Lifestream Plan to 2020 , a clear roadmap that provides the detail and direction we need to plan for the future and to realise our goals by success in achieving this will be driven by our people. We continue to implement our new operating model and organisational structure, which will see the right people in the right roles across all areas. We re on track to have this in place by the end of 2017. 3 Data calculated using information from Overview / Sydney Water Annual Report 2016 17 Sydney Water Annual Report 2016 17 / Overview 9 OverviewCorporate governanceOur performanceFinancial statementsAppendixesThe safety and wellbeing of our people remains a top priority.

10 People are reporting hazards and near misses, which means we re learning more about where and how our people might get hurt. This information is reviewed at all Board meetings and at the Board s Safety and Wellbeing Committee to ensure that we are doing all that we can to provide a safe environment for all of our staff, contractors and visitors. Over the next year, we ll also do Safety differently , focusing on five key initiatives of our new Safe and Well Strategy These include new life saving rules and safety commitments, wellbeing programs, identification of our 16 fatal risk standards, an updated Fair and just framework and a new Alcohol and other drugs policy. We ve seen changes to our Board and Executive this year. In March 2017, we welcomed Andrew Willicott, as General Manager, Customer Delivery, and Kevin Jones, who joined us as Chief Financial Officer.