In this section:
Sydney Water’s core operating expenditure is well controlled and was below budget for 2009–10.
During 2009–10, Sydney Water’s prices rose on average by around seven per cent plus the Consumer Price Index (CPI). In 2010–11, prices will increase by around five per cent plus CPI. This is the third year of a four-year pricing determination announced by the Independent Pricing and Regulatory Tribunal (IPART) in June 2008.
The new price for 1,000 litres of water is $2.01. The water service charge will be $125.23 a year and the residential wastewater service charge will be $517.19. In 2010–11, the water bill of a typical household using 200,000 litres of water a year will rise by seven per cent or $68.18 a year.
The new prices cover the costs of all Sydney’s water and wastewater services, as well as new water recycling schemes at Rosehill-Camellia and St Marys. The cost of building the desalination plant, a price rise for dam water that Sydney Water buys from the Sydney Catchment Authority and 1.9% inflation are also included in the new price.
During the year, Sydney Water’s total income was $2.2 billion, $19 million below the budgeted level. This was due to lower than forecast water use. Higher capital contributions partly offset the lower income.
Operating expenses, including purchases of bulk water, were $1.1 billion – $36 million below budget. This is largely due to lower costs for materials, plant and equipment, as well as lower costs for bulk water and service contractors.
Sydney Water’s net profit after tax was $446 million – $76 million above the budget forecast. This was largely due to lower interest costs than expected and highly controlled operating expenses.
Sydney Water’s capital expenditure budget was $1.1 billion for 2009–10. The desalination project was a major part of this program. There are also key investments in renewing water and wastewater infrastructure, developing recycled water schemes and servicing Sydney’s north-west and south-west growth areas.
At 30 June 2010, Sydney Water’s total borrowings were $6.5 billion. During 2009–10, borrowings increased by $947 million – mainly to fund the completion of the desalination project and growth infrastructure. Debt was raised through the NSW Treasury Corporation and is actively managed while limiting the cost of funds.
Total borrowing expenses for the year were $291 million. This was $72 million below target, due to lower than budgeted interest rates.
Tax expense for the year was $192 million, $32 million above the target of $160 million, due to higher net profit before tax.
Sydney Water’s credit rating was unchanged at BBB in 2009–10.
Total asset charges (depreciation, amortisation, asset impairments and losses on asset disposals) for the year were $182 million. This was $14 million lower than the budget of $196 million, mostly due to a partial reversal of previous asset impairments.
A dividend of $232 million has been declared for 2009–10, as agreed with the Shareholder Ministers. The 2008–09 dividend paid was $205 million.