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Case Study - Adelaide Contract

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Background

In the early 1990’s the Government of South Australia took steps to reshape its water industry. The Engineering and Water Supply department was abolished in 1995 and SA Water formed to take over its functions. In January 1996 the provision of water and wastewater services to 1.1 million residents in Adelaide’s metropolitan area was outsourced to United Water.

Contract structure

United Water manages, operates and maintains Adelaide’s water and wastewater systems. SA Water retains ownership of all infrastructure, sets service standards, and implements the government’s pricing policy. SA Water also maintains control of all asset investment decisions, billing and revenue collection.

The contract also includes the design and project management of new and upgrading of existing infrastructure. United Water is also required to use best practices to improve service continuously throughout the term of 15.5 years. Best practices are drawn from Veolia Water expertise to make Adelaide a showcase for efficient operations.

Outcomes

United Water has delivered operational efficiencies, improved services to customers, reduced the impact of operations on the environment, and contributed towards greater sustainability. Specific achievements include:

Operational performance

All major KPIs set by SA Water over the life of the contract have been achieved, and continue to improve beyond the initial targets.

Water quality delivered to the customer is now fully compliant with the national Drinking Water Guidelines, with a continual reduction in the number of water quality complaints received from customers.

An additional challenge in recent years has been the delivery of services during the worst drought in Australia’s history, and during a searing 2008/09 summer with temperatures reaching 45º. The focus on water issues has resulted in unprecedented media and public interest.

Specialised asset management tools, such as reliability centred maintenance, have been employed to ensure existing assets are maintained to guarantee security of operation.

An improved safety record and consistent reduction in our Lost Time Injury Frequency rate (LTIFR) has been achieved since 1996, driven by an absolute focus on workplace safety in all areas of operations.

Significant improvements to business and IT systems, have contributed to better operational and administrative performance.

As a provider of essential services, United Water is strongly aware of our responsibility to the communities in which we operate. Significant resources have been committed to local initiatives through sponsorship, donation, and direct staff involvement; and we support our staff in their individual efforts to contribute to their communities.

Environmental performance

United Water commissioned a large water tanker to collect water from scheduled mains flushing and, where practical, from burst or leaking mains. It is estimated this program will save approximately 10 million litres of water per annum. In 2008 much of the water collected was used to water the historic Avenue of Elms at the Waite Arboretum, University of Adelaide. These elms are listed on the National Estate, State Heritage and National Trust Register of Significant Trees. Dr Jennifer Gardner, Director of the Waite Arboretum said, "the delivery of more than half a million litres of recovered water by United Water has had a positive impact on the trees and maximized their chance of survival and recovery. The support of United Water in helping to save the heritage listed Elm Avenue has been invaluable and is greatly appreciated."

Through a combination of asset upgrades, operational improvements and increased reuse of wastewater, the water quality discharged from wastewater treatment plants has significantly improved. This includes average water quality turbidity reducing by over 30%, total BOD discharged from wastewater plants reduced by 70%, and total suspended solids discharged from wastewater plants reduced by nearly 80%.

United Water has designed and project managed significant improvements to the asset base, including major upgrades to the wastewater treatment plants. Effluent reuse projects include irrigation of market gardens from the Bolivar tertiary treatment plant, dual reticulation of potable water and treated effluent/stormwater at Mawson Lakes, water for toilet flushing at the Adelaide airport, and irrigation of golf courses, vineyards and municipal parks.

Current reuse projects total A$400 million and include increased capacity for the Christies Beach Wastewater Treatmdirent Plant; the new Glenelg to Adelaide Parklands Reuse Project; and the Southern Urban Reuse Project. Although South Australia currently leads the nation on water reuse per capita (approximately 30% in 2008) the completion of these projects will increase that figure to 45%.

All wastewater biosolids are now reused through an innovative scheme of application of solids to farming land.

Innovation

United Water has developed innovative solutions and technologies to assist with the challenges faced by SA Water and the broader industry. An in-house research and development team based in Adelaide forms one of Veolia Water’s international research nodes. In conjunction with local research facilities, universities and partners, United Water is on track to facilitate the delivery of more than A$50 million in research and development projects by June 2011.

Research includes trials of Aquifer Storage and Recovery (ASR), Aquifer Storage Transfer and Recovery (ASTR), Life Cycle Analysis (LCA) of alternative water management systems at Lochiel Park, and improved processes to account for green-house gas emissions for water and wastewater operations.

Summary of Key Facts - Adelaide Contract

More than 1.1 million customers in 420,000 households

A team of 450 local employees

An average of 150 billion litres of water treated annually

An average of 90 billion litres of wastewater treated annually

An average of 22 billion litres of wastewater reused annually

More than 100,000 phone calls per annum handled by Customer Service Centre

Customer satisfaction ratings above 95 percent for key parameters including overall service

15,000 km of water and wastewater networks managed and maintained

100 percent contractual compliance

A$6 billion worth of local assets managed

Project management of current infrastructure improvement projects totalling $400 million, including:

• Glenelg to Adelaide Pipeline Scheme
• Christies Beach Wastewater Treatment Plant Upgrade
• Southern Urban Reuse Project
• Aldinga Wastewater Treatment Plant Upgrade

$50 million in research and development projects delivered

$730 million in net export opportunities facilitated for local water industry companies