2010 ANNUAL REPORT - Watercare

WATERCARE SERVICES LIMITED ANNUAL REPORT 2010Chairman and Transition Chief Executive's Report Graeme HawkinsChairman Ian PartonTransition Chief Executive“Watercare is about to enter a challenging new era as the provider of water and wastewaterser vices to the people of Auckland. A great deal of ef for t has gone into ensuring the costsof integration were accommodated within existing budgets, maintaining our minimum costcommitment and reducing the risk of future price shocks.”Graeme Hawkins, Chairman“Over the last 12 months, the company has made many important steps towards becoming the integrated waterservices company for Auckland while at the same time managing services over a record dry spell and continuingto deliver important projects on time and within budget.”Ian Parton, Transition Chief Executivechairman and transition chief executive's report8This past year has been one of the most significant in Watercare’shistory as the company has prepared to integrate the assets andservices of the region’s local network operators (LNOs). On 1 November2010, Watercare will assume responsibility as the water servicescompany for the people of Auckland 1 and will gain close to 430,000new customers. It will become one of the largest infrastructurecompanies in New Zealand with assets in excess of $6 billion,annual turnover exceeding $500 million and 650 staff.The logistics and scale of work required to bring together the region’swater and wastewater service providers with their different asset, billingand financial systems and processes have been significant. In order tomanage the change process a team of Watercare and LNO experts werebrought together to form ‘Project One’. Over the past 12 months, theprimary focus of Project One has been on making certain the people,processes and procedures are in place to ensure levels of service aremaintained to all customers from 1 November 2010.The executive management team has been established and therecruitment of staff for the integrated company is well advanced.One of the most significant areas of work was the development of acommon asset management and billing system to replace the variousLNO systems. This new system was built and configured and is nowundergoing testing. A new customer centre was established at theManukau Water premises and regional operations hubs were identifiedfor managing regional services.In keeping with the scale and significance of Project One, we werecareful to ensure that rigorous project management and reportingpractices were followed. These included independent audits ofthe programme office, the key work-streams and tasks as well asa readiness audit for 1 November. Rigorous project managementdiscipline and project governance has kept Project One on trackand within budget, with a minimal amount of disruption offeringthe greatest opportunity for success.1. United Water will continue to retail water to customers in the Papakura area under an existing franchise agreement;however Watercare will own the assets.We would like to thank Gary Swift for his contribution as Acting ChiefExecutive from June 2009 to December 2009. Gary stepped up to takeon the role after Mark Ford left to become Executive Chairmanof the Auckland Transition Agency. Gary's leadership helped to preparethe organisation for a period of significant change associated withintegration while also ensuring business continuity was maintained.It is particularly pleasing to note that the whole company has workedto manage and reprioritise the timing of expenditure to ensure theintegration costs could be accommodated within existing budgets whilstmaintaining our minimum cost commitment. Our staff have maintaineda high level of commitment to the change process as well as to theongoing delivery of high-quality water and wastewater services. It isheartening to have such passionate and committed people who willbe fundamental to the success of the integrated business.The change process affected the composition of the Watercare boardtoo. In January 2010 the board said farewell to Terry Kayes whoseterm as a director for the company ended. Ian Parton resigned also,to take up the role of Transition Chief Executive for the company.In March, Ross Keenan, Chairman of Metrowater, and Peter Drummond,a Manukau Water director, both joined the Watercare board, bringing