Chair and chief
executive's report

watercare CEO and Chair 910x512

Ki te ora te wai
Ka ora te whenua
Ka ora te tangata

The wellbeing of our customers and communities depends on us looking after our water sources. Because when the water is healthy, the land and the people are nourished.

Ongoing lower-than-average rainfall conditions in Auckland have cast a public spotlight on the resilience of our region’s water supply. In the communities we serve, the perception of tap water as an infinite resource is slowly being replaced by an awareness of water as a precious taonga. At Watercare, we are embracing and fully supporting this evolution, which will serve us well as our city grows and our climate changes.

Over the past 12 months, our response to the continued dry weather has been twofold: we have worked tirelessly to increase the volume of water available by building and expanding treatment plants; we have engaged our customers on their water use, encouraging them to use water wisely indoors while also adhering to mandatory restrictions outdoors. We are pleased to report significant progress on both counts.

Our flagship drought-response project, the Waikato 50, saw the design, procurement and construction of a new water treatment plant at Tuakau in less than 12 months – a project that would have normally taken up to four years to complete. From mid-July 2021, the new plant is supplying up to 50 million litres of water a day from the Waikato River. Crucially, this means we will take less water from our southern and western dams over winter to help them replenish ahead of summer. During the year, we also expanded our existing Waikato and Onehunga treatment plants and built new treatment plants at Papakura and Pukekohe.

In the year ahead, we will increase production at our Papakura and Waitākere treatment plants. This means that by early 2022 we will have increased the total volume of water available by more than 100 million litres a day. That is enough to meet the needs of 400,000 people (about the population of Palmerston North, Tauranga and Hamilton combined). Most importantly, we will have increased the resilience of our city’s water supply through greater diversity of sources and by reducing the reliance on dams, which suffer the effects of droughts more acutely than river and underground sources. We must also acknowledge the added demand this additional abstraction has placed on the Waikato River.

Aucklanders did an outstanding job of using water efficiently throughout the year, saving around 18 billion litres in total. We ensured that the need to be waterwise stayed top of mind by delivering a widespread campaign coupled with personalised management of commercial customers. By partnering with retailers, we were able to distribute tens of thousands of shower timers to shoppers, reinforcing our shorter shower message. And by delivering our hands-on education programme, we were able to teach 8675 pupils about the value of water.

In the year ahead, we will continue to encourage our communities and customers to be water efficient; however, our messaging will focus less on drought and more on water as a precious taonga. We will also continue to roll out smart meters to commercial customers and schools. Over the past year, we installed 1100 smart meters, which are helping these large-use customers to manage their water consumption and identify leaks more easily. We will extend this programme to home-owners in the next year.

Auckland’s economy and quality of living depends on both the availability and quality of its water supply. Over the past year, we continued to meet the Ministry of Health’s drinking water standards. We also started preparing for the new nationwide regulator – Taumata Arowai – which will introduce an enhanced drinking water regulatory system from late 2021.

We know Taumata Arowai will have a holistic approach to water safety – one that is about understanding and managing risks at each step of the way, from source to tap. We submitted updated water safety plans to the Wai Comply Drinking Water Assessors in June 2021 and began raising awareness of water safety planning across the business during the year. We strongly believe that all our employees, regardless of their position, have a role to play in delivering safe drinking water to our customers.

Our relationship with our customers has been challenged during the years, due to the drought and COVID-19. The drought saw our ability to plan, deliver and operate infrastructure questioned in the media, on social forums, and by our customers. Meanwhile, COVID-19 impacted customers’ direct experience with Watercare because our phone services and meter readings were temporarily suspended. However, over the final quarter of the year there was a marked improvement in our net promoter and trust scores. We believe this is due to several factors. Firstly, we focused heavily on first-call customer resolutions and committed more resources towards fixing leaks. Secondly, we promoted our droughtresponse projects and our future focused 20-year asset management plan with our stakeholders through media and more targeted channels.

These actions served to rebuild trust in our ability to respond to issues in the short term as well as plan ahead for the long term.

Our 2021–2041 Asset Management Plan (AMP) is our most ambitious to date. It sets out how we will invest an average of $2.5 million every day over the next 20 years to address thechallenges of population growth, climate change and ageing assets.

While our AMP is future focused, our investment in infrastructure during 2020/21 has also been significant. Over the past year, we spent $767 million, which saw us deliver several drought-response projects as well as progress some of our strategic initiatives. Substantial milestones were achieved on largescale projects such as the Central Interceptor and Pukekohe Wastewater Treatment Plant upgrade. In the coming year, we again expect to spend over $747 million, with the completion of the Glen Innes Wastewater Network upgrade,the Hūnua 4 Watermain, and phase one of the Northern Interceptor.

Climate change is one of the biggest challenges that we face as a business and as a country. As we have experienced over the last few years, the water industry has been among the first to feel the impacts of climate change. Our commitment to climate action has continued throughout 2020/21. A key focus during the year was on boosting Auckland’s water supply resilience and managing demand, as highlighted above. Our Integrated Source Management Model has been updated to reflect climate impacts on water source yield.

We cannot provide our services or deliver new infrastructure alone. Over the past 12 months, we have continued to nurture relationships with our iwi partners and stakeholders. We uphold Kia Ora Tāmaki Makaurau, a framework for the council group to place the aspirations of Māori in Tāmaki Makaurau at the heart of council business. In doing so, we have committed to award 5% of annual contract expenditure to Māori businesses by 2025. This programme will actively advance Māori business, identity, and culture.

Our responses to the drought and COVID-19 have demonstrated the collective resilience of our team, whether it is from our employee or our contractor workforce. They performed exceptionally well during a challenging and uncharted time. We appreciate their dedication to our mission.

Our focus on ensuring our team return home safely saw us roll out an in-depth culture survey in the third quarter of the year. This has led to a programme of work that will take place over the coming year to improve our health, safety and wellbeing performance. It is being supported by a change in health and safety reporting, replacing traditional lag indicators, such as the lost-time injury frequency rate, with lead indicators focused on preventing injuries.

The challenge for the coming years is to retain and recruit talent in an extremely competitive job market. We believe this can be achieved by looking after our team – supporting their wellbeing; promoting training opportunities and career pathways; and recognising their contributions. This will be supported by demonstrating externally that we are an employer of choice that offers prospective employees opportunities that are unique to our business.

We would like to acknowledge the Board of Directors for their support over the year and thank our employees for their efforts and commitment. Together, we have overcome numerous challenges and become stronger as a result. This can only serve us well in the future.