Response from Water Corporation

Water Corporation thanks the Office of the Auditor General (OAG) for its time and due diligence in compiling this report and the recommendations they have provided.

The Corporation is pleased to note that the OAG has acknowledged that despite a number of high profile pipe breaks in the metropolitan area in 2013, the Corporation’s rate of leaks and breaks has been the lowest, of the ten water utilities of its size, in Australia.

The OAG has also outlined the Corporation’s risk based approach to pipe replacement as sensible, as it is more cost effective and targeted than simply replacing pipes when they fail or when they have reached the end of their standard economic life.

While this process has been praised in its approach, the OAG has highlighted that its success relies on access to relevant and robust information, which is an area the Corporation could improve. As noted by the OAG, the Corporation has identified data improvement as a high priority in its latest strategic asset management plan and is working toward improvements that will be implemented over time and in line with the OAG’s recommendations.

A number of factors are taken into consideration when assessing pipe replacement – whether the need is immediate or longer term; is based on the performance and overall condition of the pipe; customer interruption and service levels; and the cost of actual repair and restoration works. The Corporation accepts the OAG’s recommendation to formalise consideration of undetected leakage as part of asset replacement processes.

While unaccounted for water cannot be eliminated from any supply system, the Corporation takes this matter seriously and is working hard to reduce this amount. A targeted program to find and repair undetected leakage from pipes has been implemented, and has saved 3.4 billion litres of water in the last 3 years. The Corporation believes this, combined with other directly targeted programs, will reduce unaccounted for water more quickly than pipe replacement as it is implemented over a much greater area of the network, in a much shorter time frame.

Pipe replacement however does play an important role in maintaining assets and the Corporation has increased its investment in water pipe replacement from $9 million in 2009 to $44 million each year from 2014-15 through to 2018-19. The water supply system has always met its Operating Licence performance targets and will only improve with the outlined increase in funding, improved data integrity, targeted water recovery initiatives and other activities that will address recommendations outlined by the OAG.

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