Sustainability Report 2006/07Business efficiency
Melbourne Water continues to identify opportunities for new ways of working and more efficient practices to improve our business performance. We identify these opportunities through regular reviews, benchmarking and audits. We look within and outside the water industry for potential improvement measures that can help us in our drive for continuous improvement and to introduce sustainability into every aspect of our business.
Some of these efficiencies include:
- Working to change the service delivery model for Developer Services to improve access to information, streamline development referrals and planning control processes
- Expanding the river health incentives program beyond the current target audience of rural landholders, councils and community groups to now include urban landholders and other organisations with river frontage land
- Modifying the control system of pumps used in the sewerage transfer system to improve cost savings in electricity charges.
A benchmarking study of mechanical and electrical maintenance activities involving 18 major Australian and overseas urban water businesses found that Melbourne Water has realised a 16% increase in efficiency since the last study was conducted in 2001. The study placed Melbourne Water in the leading practice group and found that only 1% of prospective savings were identified for Melbourne Water.
Asset management system
Melbourne Water operates and maintains a wide variety of water supply, sewerage and drainage assets valued at $8.7 billion, as well as natural assets such as waterways.
Melbourne Water’s asset management system ensures that these assets are operated and maintained to:
- Deliver safe, effective and reliable water supply, sewage treatment, and regional drainage and waterway management services
- Protect and improve the environment
- Meet agreed financial performance targets for the government and the wider community.
A comprehensive review of Melbourne Water’s Asset Management System was carried out in 2006/07. This review included a revision of the asset management policy to incorporate and reflect the sustainability principles outlined in Melbourne Water’s Sustainable Water – A Strategic Framework. This policy was approved by the Board, and in addition, an Asset Management Strategic Framework was developed to outline our asset management objectives and act as a “bridge” between the policy and the operational aspects of our asset management functions.
The policy and framework are being implemented through the development of detailed strategic asset management plans, which identify regulatory and customer levels of service requirements and take into account community concerns and environmental issues.
Sustainable purchasing policy
With a significant capital and operating expenditure program, we are in a position to promote improved environmental and business performance through our sustainable purchasing policy.
This policy, developed in 2006/07, refers to all products, materials and services purchased by Melbourne Water and includes items procured on our behalf by third parties such as contractors. It supports our sustainability principles, helps to improve environmental outcomes of our business, and demonstrates corporate social responsibility.
The policy identifies key criteria and direction for our people to assess manufacturers and suppliers when buying products, materials and services. Comprehensive training with employees is being arranged for the 2007/08 financial year, together with a database that will begin to collect information on purchases made using the policy.
Case study
Clear thinking aids asset renewal
With about one-third of Melbourne Water’s asset base nearing the end of its life, critical forecasting skills are needed to gain an accurate picture of the ones that need to be renewed and the timing of that renewal.
The expected life of assets such as reservoirs and sewerage infrastructure can be affected by issues such as regulatory compliance and new policy direction, as well as population growth and climate change.
A new forecasting method for our asset renewals program introduces a six-step process designed to provide a more accurate, long-term picture of future financial asset renewal commitments.
A key aspect of the new process is ‘asset optimisation’ in which planning for issues such as growth and compliance are linked to the renewals process.
The need for more accurate forecasting reflects the longer vision adopted by more of our key planning and strategic direction tools.
Where previous State of the Assets summaries looked five years ahead, the next water plan will predict the assets that will need to be renewed seven years out.