Bonding of works policy

Policy document number: 2908288 Version: 8 Last updated: 7 May 2025

1. Overview

1.1 At a glance

Sydney Water (us, we, our) issues a notification of our requirements to customers (you, your) applying for a compliance certificate and who want to deviate, adjust, connect to, or extend our assets. By exception, we may provide compliance certificates before completion of the works specified in our notification, if you meet certain conditions and execute a bonding agreement.

This policy covers:

• our bonding arrangements
• the value of the bond we require
• consequences of failing to meet bonding conditions, and
• information requirements for a bonding application.

1.2 Scope

This policy applies to:

• works where we require you to bond.
• applications for bonding arrangements with us for the early release of compliance certificates prior to completing works that involve adjusting, deviating, connecting to, or extending our existing services.

1.3 Objective

This policy ensures that any of our existing services being adjusted, deviated, connected to, or extended do not adversely impact our existing customers and do not affect our operating licence or environmental protection licence requirements

2. Our bonding arrangements

2.1 Why we bond

We are governed by a range of regulatory and licence requirements that set out how we operate, ensuring that the continuity, pressure, water quality or other services of our existing customers are not affected by work on our assets. These requirements include:

• Sydney Water Act 1994.
• Sydney Water Operating Licence 2019-2023.
• Sydney Water Customer Contract 2019-2023.
• Sydney Water environmental protection licences.

2.2 When we will not bond

We do not accept requests for bonding for early release compliance certificates:

• for minor works
• where development consent has not been granted
• where infrastructure contributions and capital contributions are outstanding
• if you have not resolved any existing 'permission to enter' third party property issues
• if you can complete works in up to four weeks construction time. Construction time does not include the time to:
  • design the works
  • test, disinfect (where applicable) and/or connect the works
  • submit the project completion package.
• where you require major infrastructure
• where we deem that the works depend on other works
• until disinfection of water and/or recycled water works, as we deem relevant, have passed successfully, or
• for standard wastewater connections, until pre-connection inspection of wastewater works has been completed and passed successfully.

2.3 Bonding for changes to existing Sydney Water assets

2.3.1 When you must bond

We require bonding arrangements:

• for any existing assets being adjusted, deviated, connected to, or extended
• where you need to create easements or transfer property
• for homestead subdivisions, to ensure services are connected within 12 months of subdividing the original parcel of land

2.3.2 Bond value

The amount of the bond, as a minimum, must:

• be of sufficient value to cover contingencies (including completing or rectifying any partially outstanding or completed works to our requirements):
  • If there is one quote for the works, 'sufficient value' is the quoted cost multiplied by two to cover contingencies.
  • If there are three quotes, 'sufficient value' is the average of three quotes for the works multiplied by 1.5 to cover contingencies.
• not limit the liability of the customer to us under a Developer Works Deed or other agreement, and
• be at least $25,000.

You must provide an additional bond, where we require you to re-establish, then maintain for 12 months, any disturbed waterfront vegetation after connecting to a natural waterway. This is necessary to restore native vegetation cover to disturbed areas within the riparian corridor. You must provide a quote/s, for the total cost of the revegetation and its maintenance to allow us to determine the additional bond amount.
Note - The quotes for the cost of the works must include GST.

2.4 Bonding for compliance certificate works

2.4.1 When we may consider bonding

Purely at our discretion, we may consider bonding arrangements to:

• allow the early release of a compliance certificate before completion of the works. With reference to Section 2.2 (When we will not bond), we will consider bonding at the following work steps:
  • For drinking water / recycled water: mains have passed disinfection to ensure tap water meets Australian and our strict drinking water standards.
  • For sewer: the fully constructed asset has been inspected and passed by us, to ensure the system is hydraulically sound and correctly connected.
  • For sewer where there is an upfront connection: to be assessed on a case-by-case basis, based on risk, as there are several potential bonding stages, or
• allow suspension of our objection to a road closure application.

Note – an upfront connection must have pre-approved by us. Contact your Water Servicing Coordinator (WSC) for further information.

2.4.1.1 Infrastructure contributions

Infrastructure contributions must be paid before we are able to issue a compliance certificate. We are required to charge the infrastructure contributions in line with the transition plan approved by the NSW Government. If we execute an early release bonding agreement with you:

• within 6 months of end of financial year, you must pay infrastructure contributions at the current year's rate and the value of your early release bond must cover the difference between next financial year's infrastructure contribution price and the amount you paid. In line with our infrastructure contributions policy, if your project completes in the next financial year you will need to pay the additional infrastructure contributions and we can call on the bond if you do not, and
• within 6 weeks of end of financial year, you must pay infrastructure contributions at the following financial year's rate.

2.4.2 Bond value

The amount of the bond must:

• cover the cost of all connections, inspections, and finalisation of works as decided by us
• not limit the liability of the customer to us under a Developer Works Deed or other agreement, and
• be at least $25,000 per service

3. Accepted Bonds

The bond may be in the form of either:

• electronic funds transfer (EFT)
• BPAY
• a guarantee or insurance bond from:

a. an approved financial institution regulated by Australian Prudential Regulatory Authority (APRA) An 'approved financial institution' is either:

• an 'Australian-owned authorised deposit-taking institution' or a 'branch of a foreign bank' regulated by APRA as listed by APRA on its website, provided it has a current credit rating of 'A' or above as assessed by Standards and Poors or Fitch Rating Services, or 'A2' or above as assessed by Moody's Investor's Services
• an insurer authorised to conduct new or renewal insurance business in Australia as listed by APRA on its website, provided it has a current credit rating of 'A' or above as assessed by Standards and Poors or Fitch Rating Services, or 'A2' or above as assessed by Moody's Investor's Services.

b. from an APRA regulated Australian-owned authorised deposit-taking institution or insurer having a lesser credit rating than an approved institution, would only be accepted with the prior approval of Sydney Water's Chief Financial Officer.

• an undertaking or interface agreement acceptable to Sydney Water. We only accept these from Government (and declared government) trading enterprises. We do not accept these from councils (councils are not Government trading enterprises) or corporations doing relevant business with government
• a blanket or rolling guarantee from an approved financial institution, with conditions we have approved for staged development areas.

4. Bond extensions

You must ask for a bond agreement extension as soon as you realise you cannot meet the conditions of your bond agreement and before the agreement's expiry. We may call up the bond if you have not asked for an extension before the agreement expires (See Section 6 Bond releases).

If you need a bond extension, you must explain why you cannot meet the bonding agreement conditions and include a revised project management plan (See Section 8 Definitions).

5. Failing to meet bond conditions

5.1 Bond call ups

If you fail to comply with any of the conditions of the bond agreement and you haven't asked for and been granted an extension, we will contact you to ask why you have not complied. We may then call up the bond if we believe immediate works are required to prevent a potential breach of our regulatory and licence requirements, as outlined in Section 2.1 (Why we bond).

If we call up a bond we may use the money, at rates determined by us, to:

• complete and/or assess the works, so we can complete and/or take ownership of the works, and/or
• compensate us for all the costs we incur, including:
  • all costs to complete the works, including administration and operational costs
  • any payments we must make for breaching our Customer Contract (including customer redress), and/or
  • reimbursement for service charges that we must make to our existing customers if the customer had not completed works on time.

Notes

• Calling up of a bond is a serious matter as it may jeopardise the customer's credit rating.
• Rectification costs may not be limited to the value of the bond. We may seek to recover additional amounts over and above the bond from the customer.

6. Bond releases

We will hold the bond until you transfer the asset to us and pay us all outstanding expenses and fees owed to us. After this occurs, we will return the bond (or the remaining part of the bond if we have called it up).

6.1 Stormwater

Connecting to natural waterways

We will release the additional bond for revegetation and maintenance after the 12 months maintenance period and satisfactory completion of the works.

Note – We will return cash bonds only to the nominated bank accounts that you provided when you submitted the signed bond agreement. We will return bank guarantees to the issuing financial institution.

7. Submit your application

7.1 For works where we require you to bond

If you must apply for a bonding arrangement (Section 2.3 Bonding for changes to existing Sydney Water Assets):

• we must have received and accepted a design package for all services required and the signed Developer Works Deed
• you must provide a schedule of construction costs for the works
• you must give us a project management plan (see Section 8 Definitions)
• for major infrastructure projects, we must have a head case and a signed agreement
• provide us with the return details for the release of the bond.

7.2 For early release compliance certificates

To allow us to assess if we will consider a bond (Section 2.4 Bonding for compliance certificate works), you must provide us with:

• a letter requesting the bond explaining why the bond is required
• a schedule of construction costs for the works
• a project management plan (See Section 8 Definitions), of outstanding and dependent works
• a site-specific construction method statement
• details of your Listed Provider's availability and schedule to complete the Works
• evidence that we have received and accepted a signed Developer Works Deed
• your plans as to how services will be provided without risk to our regulatory and licence requirements (See Section 2.1 Why we bond)
• submit interim pre-work as constructed plans in a format we can upload, and
• provide us with return details for the release of the bond.

8. Definitions