Water Journal : Water Journal December 2012
conference reviews regular features 50 DECEMBER 2012 water although the desal plant will be effectively mothballed, price rises of 34 per cent are proposed to cover the cost and customers are not perceiving the value. One of Tony’s particular concerns is that there is a lack of clarity in accountability. He called for a number of reforms including the creation of a national regulator and a Shareholder Monitoring Unit to oversee behaviour of governments and shareholding owners. Tony argued for a renewed focus on asset maintenance to ensure that the standard of living of current and future generations does not diminish. Tony’s objective is for customers to see Yarra Valley Water as a good provider that is sustainable. Kevin Young from Sydney Water also commented that while the breaking of the drought on the east coast had reduced the prominence of water as an issue, making sure that existing systems continue to run efficiently and effectively is essential. As with Western Australia, there is pressure to reduce the State’s liabilities and make sure that its AAA credit rating is preserved. Part of the strategy pursued has been to privatise – the sale of the desalination plant in Sydney being a key example. But the issue is not just one of selling the plant; it is ensuring it is removed from the balance sheet. In Sydney there has been a significant move to enhancing competition and under the sale arrangements, the desal plant can supply customers other than Sydney Water. This means that it is not considered a Sydney Water liability as it would be if Sydney Water were the plant’s only customer, improving the Corporation’s balance sheet. Opportunities to sell wastewater and water treatment plants under similar arrangements are now being made, but the fundamental issue is not merely selling assets but driving value; Sydney Water’s balance sheet must be healthy, but so too must the return on investment it achieves and the quality and consistency of product delivered to customers. The next session dealt with the attitudes of financial institutions to the funding of urban water infrastructure in the face of emergent risks such as climate change, and community expectations that companies will behave responsibly with respect to the environment and communities. Delegates heard from Rosemary Bissett, Head of Sustainability Governance and Risk at the National Australia Bank. Rosemary’s presentation covered the issue from two perspectives: risks associated with water as an input to other processes seeking funding; and risks associated with funding of water infrastructure itself. The risks with respect to the former are clear: power stations can’t run without water, nor can crops grow; human health is affected by poor water quality, affecting productivity. Similar issues arise with respect to the latter, but from a funder’s perspective there is particular concern to ensure that infrastructure that is funded is able to demonstrate a benign or positive impact on the environment, and its role in enhancing community wellbeing. Rosemary made particular note of the importance of natural capital (the stock of environmental assets within a nation’s borders or over which it has an impact) to economic sustainability. In this respect, protection of a nation’s water resources is fundamental. Diminution of land, water or air quality, or of ecosystems on which life depends, will increase a nation’s sovereign risk. Major financial institutions have recently committed to a Natural Capital declaration. Rosemary’s speech was followed by Mr Chris Herbert, Chief Executive of AquaSure, the company that built and operates the Wonthaggi Desalination Plant. Chris explained the lengths to which plant management had gone to in responding to community concerns and to ensuring that the plant had minimal environmental impact, and minimal impact on farmland neighbouring the plant itself, or the pipeline/electricity corridor that services it. These efforts, he noted, had significantly reduced community concern and led to the establishment of a plant that is world class. He noted that such initiatives come at a cost, but also noted that Melbourne would be served by a state-of-the-art plant which was as environmentally benign as such a facility could be for many decades. The morning’s sessions concluded with release of the 2012 State of the Water Sector Survey (see page 46 for a rundown of the survey). The after-lunch spot is always a tough one. Audience attention may lag, although not if speakers of the calibre and enthusiasm of Mr Chew Men Leong, new Chief Executive of Singapore PUB and Mr Christopher Gasson, Publisher of Global Water Intelligence are presenting. As well as providing an overview of PUB’s responsibilities and approaches, Mr Chew outlined three challenges facing urban utilities: • Increasing urbanisation, which means there is more competition for space, including space underground in which to place services; and greater density, which may increase run-off and place strain on stormwater infrastructure. • Increasing energy dependence and costs. Among Mr Chew’s examples was the changing nature of Singapore’s water supply mix, which will rely in future on more energy-intensive production techniques in an era of rising energy costs; and • Evolving populations with different needs and wants, including a burgeoning and more highly educated middle class, who will demand improved services and employment that better meets their skill sets. A view of Wonthaggi Desalination Plant. PHOTO:COURTESYOFAQUASURE Increasing density means there is competition for underground service corridors. Contact Us: T: 02 9502 8000 or 1300 130 149 F: 02 9502 8090 email@example.com www.georgfischer.com.au CLEAN WATER a commitment of Georg Fischer Georg Fischer created the Clean Water Foundation in 2002. Thanks to this foundation, GF has been able to help 200,000 people worldwide to have access to clean drinking water and a better water supply over the long term. To date close to $7M has been invested in this project. Visit www.cleanwater.ch for further information.
Water Journal February 2013
Water Journal November 2012-1