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Realising the efficiencies of integration

In 2011, Watercare achieved regional cost efficiencies of $100m. This meant we were able to cut the retail price of drinking water across Auckland from 1 July 2011 through cutting the unit rate and scrapping the fixed service charges for water that were previously payable in some areas. Had we not achieved efficiency savings, drinking water costs had the potential to be around 30 percent higher.
Whilst a wastewater price increased by 4.5 percent from 1 July 2011, the increase was significantly lower than the maximum of a 36.9 percent increase that had been forecast by councils prior to amalgamation. 
Efficiencies from integration are ongoing and include:
  • economies of scale, ie amalgamation and centralisation of services (eg corporate services, contact centres), improved purchasing power (eg electricity and chemicals), contract leverage (finance and operations)
  • infrastructure planning and regional optimisation, eg capacity in local assets considered on a regional basis
  • lower staff numbers (from approximately 1100 staff in 2010 to 600 in 2012)
  • consolidation of network service hubs
Continuing the drive for efficiencies and cost savings
Watercare’s legislative requirement to be a minimum cost operator has driven an organisational culture focused on delivering high quality services at the lowest cost. As a result, the company has an excellent reputation for building operational infrastructure and delivering high quality services to the people of Auckland.
Watercare continues to strive for efficiency gains in all aspects of our business while ensuring reliable, high quality services continue to be delivered to our customers. Some examples of where we have achieved such gains in our day to day operations include:
  • using models to ensure costs are minimised, eg water delivery from gravity sources is prioritised
  • reliability-centred maintenance, optimising maintenance programmes to ensure they remain efficient
  • online billing and a wider range of payment channels
  • establish remote monitoring for regional plants, thereby reducing the number and costs of call-outs while ensuring high level of operational standards are maintained
  • operating the network on a regional basis (eg the new water and wastewater network for Kumeu-Huapai and Riverhead), working towards more consistent design engineering standards