2002-03 Annual Report

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M ELBOURN E W ATERAnnual Report 2002/ 03

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Who we are 1

What we do 2

Who we work wit h 3

Why we produced t his report 3

Our goals 4

Chairman and M anaging Direct ors report 5

Our precious wat er 6

Managing our protected catchments 8

Providing safe, high quality drinking water 9

Managing drought 10

Investing in a sustainable future 11

Conserving a scarce resource 12

Recycling water towards a greener future 13Prot ect ing t he environment 16

The Western Treatment Plant 18

The Eastern Treatment Plant 18

Sustainable management of biosolids 20

Reducing greenhouse emissions 20

Our no-odour objective 21

Protecting our waterways and bays 21

Improving the health of Port Phillip Bay 25

Improving the health of Westernport 26

Education the key to behavioural change 26

Focusing on good result s 28A major benchmark managing built assets 30

Managing risk and maintaining high security 31

A safe workplace 32

Meeting our commitment to service delivery 32

Our people 35

Financial results 38

Key peformance indicators 40

Corporate governance 42

Financial st at ement s 44

Compliance index 72

St at ement of Corporat e Int ent 74

St at ut ory informat ion 77

Publications 77

Consultants 77

Government grants 78

National competition policy 78

Freedom of Information 78

Pricing changes 79

Privacy legislation 79

Energy and Water Ombudsman 79

Whistleblowers protection and procedures 79

Information available on request 79

CONTENTSMelbourne Water Annual Report 2002/ 03

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Melbourne Water ANNUAL REPORT 2002/03 1

Melbourne Water is owned by the Victorian Government.

Our operating area extends from Melbournes water

supply catchments high up in the Yarra Ranges, to

the Mornington Peninsula and Western Port, north

to Yan Yean and west to Werribee.

We are a significant business, managing $7.1 billion

of natural and built assets. Our annual operating revenue

of more than $510 million is earned from water supply,

sewage treatment and drainage rates. This is to fund our

operations and capital program, to pay off debt and return

dividends and equivalent taxes to the Government.

We plan to invest more than $145 million a year over the

next three years on our infrastructure including reservoirs,

sewage treatment plants, pumping stations, sewers and

drains to help ensure we meet our objectives. We are

committed to decision-making based on economic, socialand environmental considerations.

An independent Board of Directors is responsible for the

governance of Melbourne Water. The responsible Minister

is the Minister for Water.

Our people have diverse skills and expertise, and range

from environmental scientists to engineers and research

and technology specialists, and we place a high priority

on building strong partnerships and relationships in the

government, industry and community sectors.

WH O WE ARE

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Water

cycle

PRECIP ITATION

WATE

R

COLLE

CTION

& CATCHMENTM

ANAGEMENT

WATER SUPPLY

EVAPORATION

BAYS

& OCEANS

WATERWAYS

ST

ORMWA

TER MANAGEMENT

SEW

AGE TREATMEN

TWAT

ER RECYCLING

We protect bays and

oceans by building

wetlands to reduce

stormwater pollution,

improving the quality

of effluent discharged,

and reducing flows into

the sewage treatment

plants through water

conservation programs

We t reat sewage and

industrial wast e

collected by our retail

customers from homes

and businessesWe protect and improve

waterways by managing

irrigators, stabilising beds

and banks, preventing

flooding, fencing off stream

frontages, removing willows

and other weeds, planting

native species and releasing

water from reservoirs to

ensure environmental flows

We harvest high quality

water from uninhabited

catchments and store

water in reservoirs, often

for years at a time, to

help purification

We manage an

extensive network

of pipes, pumping

stations and water

treatment plants

and supply water

to our retail

customers

We supply

recycled water

for agricultural,

horticultural

and other

businesses and

to irrigate open

spaces such as

golf courses

We build wetlands

and other water-

sensitive features

to treat or remove

stormwater pollution

litter, engine oil

and other urban

runoff before it

washes into drains,

waterways and bays

2

We manage Melbournes water resources in a way that

aims to ensure that future generations enjoy one of the

best urban environments in the world. This involves a

major role in the total water cycle.

Our Vision

At Melbourne Water, we understand that engaging our

stakeholders is the key to achieving our vision of

Making Melbourne the worlds most water-sensitive city.

WH AT WE DO

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Who we work wit hEPA Victoria, the Department of Human Services and the

Essential Services Commission regulate the environmental,public health and economic aspects of our business.

We work across several arms of the State Government,

including the Department of Sustainability and Environment,

and the Department of Treasury and Finance.

Our main customers are the retail water companies

City West Water, South East Water and Yarra Valley Water.

We also provide services to other water authorities, local

councils, land developers, businesses that divert river

water, and recycled water users.

Industry partners include AGL Ltd, which generates

electricity from biogas to help power the Western

Treatment Plant at Werribee, research organisations

such as the CSIRO and Co-operative Research Centres,

engineering consultants, and contractors who carry out

tasks ranging from inspecting and maintaining assets

to catchment surveillance and litter removal.

We work closely with a wide range of community

stakeholders including Friends of, Landcare, resident

and environment groups, advisory bodies, rural

landowners, and the education sector.

Our valuesWe have developed values that guide our decision-making

and enable the organisation to operate in a professional

manner, and in the best interests of our customers,employees, shareholder, suppliers and stakeholders.

We are people who:

recognise we achieve more by working with others

feel privileged to be custodians of our water resources

behave with integrity

attain excellence through creativity and innovation

celebrate our achievements and learn from our

experiences.

Why we produced this reportMelbourne Waters Annual Reportoutlines how we have

performed in meeting our key responsibilities in 2002/ 03.It explains how we provide a safe and reliable supply

of water, protect the environment, deliver business

improvements and help the Victorian Government

achieve its policy objectives.

We have a goal of ensuring that the community is well

educated and informed on water issues. This publication,

our Water Resources and the Environment 2 002 / 03 and

our Social Report 2002 / 03 are important steps towards

achieving this goal. Water Resources and the Environment,

and the Social Report will be available on Melbourne

Waters website www.melbournewater.com.au.

All of our reports are available on request by e-mailing

[email protected] or ringing 131 722 within

Victoria or (03) 9235 7100 from elsewhere in Australia.

A feedback form is provided at the back of this report,

and we welcome your comments.

OUR GOALSOur strategic plan outlines our goals underthe following priority areas:

Managing Melbournes WaterResources and t he Environment

Conserve Melbournes high quality,affordable drinking water for present andfuture generations without the need forfurther dams.

Operate in a manner that improvesthe environment.

Protecting our Waterways and Bays

Improve the health and amenity of PortPhillip and Western Port bays for theprosperity and enjoyment of present andfuture populations.

Ensure that Melbournes natural waterwaysare healthy with increased numbers ofnative fish, platypus and plant life.

Managing our Built Assets Ensure that the integrity of our water,

sewerage and drainage infrastructure iswell maintained and protected now andinto the future.

Responsible Financial Management

Remain Australias most efficient waterauthority and provide ongoing financialreturns to our owner, the VictorianGovernment.

Working wit h our Cust omers andthe Community

Provide excellent service.

The community is well educatedand informed on water issues.

A motivated and skilled workforce thatgenerates new ideas and is aligned withthe latest technologies and innovations.

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4

Silvan Dam

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Melbourne Water continued to focus on sustainable

water resource management as Melbourne experienced

its seventh consecutive year of drought.

The Victorian Governments Water for the Futureprovided

the policy framework for the further development of water

recycling and water conservation programs. Melbourne

Water is committed to helping the Victorian Government

meet its key targets of reducing per capita water

consumption by 15 per cent, and increasing water

recycling to 20 per cent, both by 2010.

We have played a leading role in the past few years in

the development of the Victorian Governments Water

Resources Strategy for Melbourne. This strategy sets

a solid framework for the future. Building on the

knowledge gained from the strategy, Melbourne Water

developed a water conservation plan that will save13,000 million litres of drinking water a year by 2010.

The plan aims to broaden initiatives that are already

delivering water savings, including reducing leakage

from our operations, producing sustainable water use

plans with councils, building industry partnerships,

educating and engaging the community, and initiating

water recycling schemes. A consolidated sustainable

water plan is now being developed with Melbournes

retail water companies.

Water recycling increased by about 80 per cent this year

to 31,165 million litres, up from 18,439 million litres for

2001/ 02, with supply beginning to our first recycling

customers west of Melbourne. We also made significant

progress in examining future opportunities presented by

the Victorian Governments Werribee Plains Visionfor

major recycling schemes to service a variety of industries

and revitalise dryland areas from the Maribyrnong River

west to Geelong, Bacchus Marsh and Sunbury.

While drought, water conservation and water recycling

were priority issues, we also continued to ensure that our

management of water, sewerage and drainage infrastructure

was paramount for our business. We implemented a

$118 million program in infrastructure this year.

Melbourne Water is in the final stages of a major upgrade

of our Western Treatment Plant and further developedplans for a major upgrade of our Eastern Treatment Plant.

Investments in these upgrades will protect the marine

environment, deliver tertiary-treated water from our

sewage treatment plants, open up new recycling

opportunities, create economic growth and help us

meet community expectations.

Effective long-term planning is essential for Melbourne

Water and our new strategic plan was completed in March

2003. The plan was developed to provide a clear summary

of our business objectives, goals and actions to support

the achievement of our vision of Making Melbourne the

Worlds most water-sensitive city. Importance is also

given in the plan to responsible financial management

and to our management of major water, sewerage and

drainage infrastructure.

Research is a critical element in planning for the future.

Our people work with expert external organisations such

as the Co-operative Research Centres, the CSIRO and

universities in collaborative projects that maximise the

impact of research funds. We invested $2.5 million

in research and development programs this year. Key

research areas were treatment technology, waterwaysenvironment, drinking water and water recycling.

Studies were commissioned to investigate the impact of

climate change in greater Melbourne, and on how we can

maximise the use of Melbournes total water resources

including stormwater, treated effluent, as well as drinking

water. The latter study is being undertaken by Professor

Peter Cullen, a former Chief Executive of the Co-operative

Research Centre for Freshwater Ecology, and Professor

Russell Mein, a leading figure in urban hydrology,

catchment yield, flood estimation and salinity.

Financial results

Responsible financial management is a major priority

and we generated strong returns this year. Net cash

from ordinary activities of $324.7 million enabled us

to invest $117.9 million in assets for the future, reduce

our debt by $21.3 million and pay taxes and dividends

of $123.1 million to the Victorian Government. Net

profit after tax was $150 million, which was $18.4 million

better than our plan.

Looking ahead

We acknowledge the expertise and willingness of

our people to take on new challenges and to commit

to continuous improvement. An area of particular

importance is to improve our occupational health

and safety performance.

In the coming year we look forward to working with the

Victorian Government and other key stakeholders to

achieve the targets established in our strategic plan.

Our investment in education will continue as will our

commitment to providing safe, high quality drinking

water and to protecting and improving Melbournes

bays and waterways.

Graeme W Bowker Brian R Bayley

Chairm an Managing Director

CHAIRM AN AND M ANAGIN G DI RECTORS REPORT

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6

OUR PRECIOUS W ATERManaging Melbournes Water Resources and the Environment

Goal: We cont inue to conserve M elbournes high qualit y, affordabledrinking water for present and future generations without the

need for further dams

Achievements

Key Challenges

Disappointments

> Maintaining the communitys enthusiasm for water conservation even during periods of high rainfall.

> Implementing recommendations of the Water Resources Strategy as agreed by the VictorianGovernment.

> Developing contingency plans to counter the impact of climate change on our water resources.

> Developing a more integrated approach to managing available water resources, including theuse of groundwater, stormwater and treated effluent.

Unchlorinated water entered the system after a power failure at the Silvan treatment plant.However, timely action avoided any impact on customers.

Dirty water complaints were received when we were required to lower water levels at SilvanReservoir to carry out works on a water main.

Further delays to upgrading drinking water for Mornington Peninsula residents becauseobtaining permits for reservoir covering and replacement at Dromana, Frankston andMornington has taken longer than expected.

We provided our customers with 483,000 million litres of drinking water that enabled the retailwater companies to meet consistently high levels of service.

A major study of catchments in southern Australia found that Melbournes protectedcatchments provide the same or better water quality as that from an unprotected catchmentwith a water filtration plant.

Our drinking water experts were invited to present to the worlds first water safety and riskmanagement conference held in Berlin on Melbournes unique water quality management system.

Played a key role in helping the Victorian Government to complete a Water Resources Strategyfor greater Melbourne. We committed $50,000 this year for the preparation of the finalstrategy, making a total commitment of $850,000.

Completed a water conservation action plan that outlines initiatives to save 13,000 millionlitres of water a year to help achieve the Victorian Governments target of 15 per centreduction in water consumption by 2010.

Piloted a sustainable water management strategy with the City of Melbourne to cut its water

consumption by 15 per cent. This will now be used as a template for other councils who canapply for grants of $10,000 each.

Prepared drought contingency plans that will supply a further 170,000 million litres of waterto Melbourne should extreme conditions persist.

A market research study found 97 per cent of people surveyed were able to estimate the levelof Melbournes water storages.

Increased water recycling from our sewage treatment plants by about 80 per cent, recyclingmore than 11 per cent of treated effluent.

Invested $1.4 million on a range of industry and community education programs includingtraining workshops to accredit plumbers and gardeners in sustainable water practice.There are now 350 plumbers with Green Plumber accreditation in Melbourne.

Invested $200,000, in a partnership with the Victorian Governments Office of Housing,to reduce water usage in public housing estates by recycling stormwater to irrigate gardens.

Began supplying recycled water to the Werribee Tourist Precinct after completing a $2.5 million,six-kilometre pipeline from the Western Treatment Plant.

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Water UpdateGeorge KalogerinisYellow Cab Taxi Service

Yellow Cab taxi driver George Kalogerinisis one of Melbournes informed taxidrivers who has our latest water storagereport at his fingertips to pass on tohis passengers. Storage informationand water-saving messages are sent

to Yellow Cabs each day and distributedto the companys taxis via their internalcommunication network.

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M anaging our prot ect ed catc hment sMost of our water comes from 140,000 hectares of

uninhabited, forested catchments high up in the YarraRanges that have been closed to the public for more than

100 years. Melbourne is one of only about five cities in

the world that has protected water supply catchments.

Melbourne Water manages these catchments to ensure

the purity of the source of our drinking water. We believe

it is better to start with the highest quality source water

than having to filter it to reach required standards.

The forests act like a vast natural sponge, catching,

holding, filtering and slowly releasing rainwater into

streams and then reservoirs. About half of Melbournes

catchments are covered in mountain ash, which are

among the worlds largest hardwood trees.

Safeguarding these catchments to ensure the highest

quality source water is a major priority for Melbourne

Water. Bushfires, erosion and unauthorised public entry

are the main risks we manage.

Melbourne Water spends about $1.3 million a year to

manage these risks as part of our work to ensure the

highest possible quality source water.

Roads that run through the catchments have been built

to provide good access for firefighters. Drainage and

maintenance works on these roads are carried out

to minimise sediment run-off into streams and

eventually reservoirs.

In recent years, Melbourne Water has upgraded signage

and security systems in the catchments. Security officers

employed to minimise public access apprehended 40

people in the catchments this year.

Reviewing the risk of bushfires

Melbournes forested catchments are at risk from fire

each year. A burned forest will wash soot, ash and debris

into reservoirs, affecting short-term water quality, as

experienced this year in Canberra and Victorias north-east.

However, fire also affects the quantity of water that runs

off into streams and reservoirs. Forests of mountain

ash need large quantities of water for many years

after a bushfire.

Given the serious wildfire threat this year, Melbourne

Water worked closely with other statutory authorities, and

our catchment operations people ensured all equipment,

tanks, bulldozers, pumps and auxiliary equipment were

fully operational.

Melbourne Water attended 15 fires that could have

threatened our assets. Only one of these, at Frankston

Reservoir, developed into a significant blaze, burning

40 hectares of land around the reservoir in January 2003.

We took preventative action by diverting and filtering any

run-off from subsequent rainfall, avoiding water

contamination from ash, soil and debris.Following this years extreme fire season, Melbourne

Water is undertaking a strategic review of our approach

to fire protection and suppression, and reviewing the

vulnerability, risks and liabilities to wildfire of our water

catchments and water supply assets.

Following the devastating bushfires of early 2003, North

East Water, based in Wodonga, and ActewAGL, the ACT

water authority, sought expert advice from Melbourne

Water as part of their catchment rehabilitation planning.

Melbourne Water intends, where appropriate, to include

these findings in our bushfire planning.

Proving the value of our catc hments

A key research and development project completed during

the year was a three-year study investigating dry and wet

weather run-off quality, and the incidence of pathogens in

catchments with different land uses in southern Australia.

The study showed that our protected catchments supply

the same or better water quality as that from an

8

O U R P R E C I O U S W A TE R

M eet ing the fire threatJim TiteSection Leader, Headwork s Maint enance

Not many people realise Melbourne Water isresponsible for four crucial fire tower lookoutsduring the summer fire season in pristineforest east of Melbourne.

They also dont realise that about 50 Melbourne

Water firefighters assisted the Country FireAuthority and the Department of Sustainabilityand Environment with the battle last summerto contain one of Victorias worst bushfires.

A decision made last year to reform our full-time firefighting unit couldnt have come ata more crucial time.

Those 20 Melbourne Water firefighters,together with another 30 summer casualfirefighters, not only looked after MelbourneWaters catchments, but were also in the thickof it in the north-east of the state where the

worst fires came through. They were availablein shifts around the clock providing importantequipment, vehicles and just plain manpower.

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unprotected catchment with a water filtration plant. This

means that there would be no public health benefit to be

gained from filtering our water.

Project Co-ordinator Dr David Roser said: The protected

catchments seem to produce far better water quality than

the impacted catchments, including what can be expected

by conventional water treatment.

Providing safe, high qualitydrinking waterOur water is safe and pleasant to drink, and undergoes

minimal treatment. A range of risk management systemsprovides barriers to contamination.

Melburnians place a high value on our drinking water,

which has a reputation for being among the most

pleasant and safe in the world.

In recent years, about 10 per cent of Melbournes water

has come from Sugarloaf Reservoir, which is mainly filled

by pumping from the Yarra River, and a further five per

cent from Yan Yean Reservoir in the Plenty River valley,

Melbournes oldest and shallowest water storage. Water

from these reservoirs requires full filtration and disinfection.

Ensuring water quality

The water we supply must be safe, pleasant to drink andmeet the requirements of:

National Health and Medical Research Council drinking

water guidelines

Victorian Government Health (Quality of Drinking Water)

Regulations 2002

Health (Fluoridation) Act 1 97 3

Food Act 1984.

Our risk m anagement system

Melbourne Water treats and supplies drinking water

using a risk management system that assures its

quality and safety.

The system, Hazard Analysis and Critical Control Point

(HACCP), was originally adopted by the food industry.

It focuses on quality management from the catchment to

the tap, rather than end-point testing, by identifying risks

and establishing control points. Melbourne Water was one

of the first water authorities to apply the HACCP system

to drinking water.

Our quality and safety management systems are formally

certified and audited by Lloyds Register Quality

Assurance. This includes HACCP and international

standard ISO 9001 for drinking water quality, and ISO

14001 for environmental management.

Lloyds undertakes a recertification process every three

years and a surveillance audit every six months. Lloyds

visited Melbourne Water for a surveillance audit in July

2002 and for a recertification audit in February 2003.These audits covered both drinking water and

environmental management systems.


French

Island

Phi l l ip

Island

Port Phil l i p

Bay

YARRA

RIVER

MELBOURNE

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WINNEKE TP

YERING GORGE

PUMPING STATION

PRESTONSt ALBANS

BROADMEADOWS

COWIES HILL

GARFIELDPAKENHAM

TYABB

DROMANA

Mt VIEW

LILYDALE

OLINDA

HALLAM NORTHDANDENONG

MONBULK

PLENTYYARRA GLEN

CRANBOURNE

MORNINGTON

N

2010

Kilometres

0 LEGEND

City WestWater

Yarra ValleyWater

South EastWater

TARAGO

RESERVOIR

UPPER YARRA

RESERVOIR

THOMSON

RESERVOIR

MAROONDAH

RESERVOIR

RUNNING CREEK

RESERVOIR

TOOROURRONG

RESERVOIR

YAN YEAN

RESERVOIR

GREENVALE

RESERVOIR

FRANKSTON

RESERVOIR

SILVAN

RESERVOIR

CARDINA

RESERVOIR

BEACONSFIELDRESERVOIR

DEVIL BEND/ BITTERN

RESERVOIR

(DECOMMISSIONED)

SUGARLOAF

RESERVOIR

Water Supply Catchment

Water Storage Reservoirs

Water Service Reservoirs

Water Pumping Stations

Water Treatment Plant

Water Pipelines, Aqueducts

Retail Water Company

OSHANNASSY

RESERVOIR

Melbourne Water Water Supply System

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Framework for wat er quality

Two of our Research and Technology managers helped

revise the Australian Drinking Water Guidelines,

administered by the National Health and Medical

Research Council. The revised guidelines, due for

publication in late 2003, will include the Framework for

the Management of Drinking Water Quality, incorporating

the principles of HACCP.

The National Health and Medical Research Council has

removed the use of total coliforms as a measure of faecal

contamination from the new draft guidelines, leaving

E. col i as the primary compliance indicator, consistent

with Melbourne Waters approach.

Managing droughtAt 30 June 2003, we were in the seventh year of the most

severe drought on record. Melbournes water storages had

fallen to 40.4 per cent of capacity. And the period from

June 2002 to June 2003 was the driest since records

began in 1855.The community responded positively to the introduction in

November 2002 of water restrictions the first in 20 years.

We estimated that approximately 29,000 million litres of

Rainfall and run-off for Melbourne catchments

water more than enough to fill Maroondah Reservoir

was saved between November 2002 and June 2003

through restrictions and increased community awareness.

Balancing the needs of the environment and irrigators

Melbourne Water is responsible for managing the amount

of water taken from waterways in the Yarra, Stony, Kororoit,

Laverton, Skeleton and lower Maribyrnong catchments.

We issue licences to customers, which enable them to

take water for their homes, farms, market gardens,

vineyards and other businesses.

We work with diverters to develop plans that balance the

needs of all stream users and the environment. These

plans help diverters understand their security of water

supply and plan for the future, and provide greater

certainty during drought.

This year, Melbourne Water introduced restrictions and

bans in the Yarra and Maribyrnong catchments as several

waterways reached minimum flow levels or stopped

flowing altogether.

These bans included businesses licensed to divert water

in the Diamond Creek, Plenty River, Watts River, Hoddles

Creek, Stringybark Creek, Wandin Yallock Creek, PaulsCreek, Steels Creek and Dixons Creek catchments.

Many of these bans remained in place at 30 June 2003.

In the Maribyrnong catchment, bans were introduced on

diverters in January 2003 as a result of extremely low

river flows and depletion of Melbourne Waters share of

water in Rosslynne Reservoir. The ban was eased in April

2003, and diverters were allowed to take the balance of

their 15 per cent allocation over the following months.

Across the Yarra catchment, Level One restrictions were

introduced in November 2002. These were upgraded to

Level Two in December 2002 and Level Three in J anuary

2003. Restrictions were eased to Level Two in May 2003.

Exemptions included water required for private vegetable

gardens and essential domestic and stock use, and

emergency fire protection.

10


Leading the world in drinkingwater safet y

16001800

1992/93

1993/94

1994/95

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

1400

1200

1000

800

600

400

200

0

Catchment Run-off (mm)

Catchment Rainfall (mm)

In April 2003, two Melbourne Water drinking water

experts addressed the worlds first water safety and

risk management conference held in Berlin. The

Hazard Analysis and Critical Control Point (HACCP) risk

management system that we use to ensure drinking

water quality was a key focus of the conference.

Microbiologist Melita Stevens, Manager of Drinking

Water Research, presented the World Health

Organizations approach to HACCP water safety plans.

The text for these plans, developed by Dr Stevens and

several other scientists, contains guidance for thethird edition of the WHO Guidelines for Drinking Water

Quality, due for release late in 2003.

Water Quality Engineer Kevin Hellier spoke about

Melbourne Waters experience with developing and

implementing a HACCP plan for drinking water supply.

Dr Stevens organised and moderated the first HACCP

workshop for drinking water in the United States.

The workshop was held in Seattle in November 2002.

She is principal investigator in a project to develop a

model plan for the supply of safe drinking water in the

United States, based on HACCP. The two-year project

won US$150,000 of funding from the American WaterWorks Association Research Foundation.

This year Dr Stevens also ran a HACCP workshop for

Victorian regional water authorities.

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Investing in a sust ainable future

Our water challenge

A fundamental challenge for present and futuregenerations of Melburnians is to live within our water

means. The citys population will continue to grow,

increasing demands on water. Melbournes current water

supply and storages are limited, and we recognise that

the environmental and social costs of new dams are

unacceptably high.

Planning for the long t erm

A Water Resources Strategy for greater Melbourne, led

and principally funded by Melbourne Water, was presented

to the Victorian Government in October 2002. Melbourne

Water has contributed a total of $850,000 to the long-

term strategy.

The strategy proposed a blueprint for maintaining a safe,

reliable, and financially and environmentally affordable

water supply, which will cope with the predicted growth in

Melbournes population of 32 per cent over the next 50 years.

In its initial response, the Victorian Government adopted

10 of the initiatives proposed in the strategy, including

leading the development of national water efficiency

labelling standards, encouraging the use of water-efficient

appliances, education campaigns, research, and the

development of water management plans for large

industrial users. The Government is considering further

recommendations regarding environmental management,

water pricing and regulation of water-efficient appliances.

The planning committee comprised representatives from

government and non-government organisations, the

farming sector, and scientific and academic institutions.

Studying climate change

During October 2002, Melbourne Water sent two senior

managers to Britain, Spain and the United States to

study water resources planning for climate change. The

visit allowed us to benchmark Melbourne Waters water

resource management planning, and revealed it to be

world class. The high variability of our streamflow means

that we are relatively experienced in considering

climate uncertainty in our planning.Following the overseas visit, we commissioned an

investigation of the impact of climate change on

Melbournes water supply. The study, being conducted

by the CSIRO and due to be completed in 2003/ 04,

is examining climate change projections for Melbournes

catchment and service areas, including possible changes

in rainfall, temperature, evaporation and humidity.

The study will assess the implications of climate change

on catchment fire risks, sea level changes, flooding, water

quality and water recycling. It will also identify likely future

developments that could affect the demand for water and

opportunities to enhance the reliability of our water

supplies. Melbourne Water will use the study results

in its contingency planning.

Optimising our water resources

At the end of the year, we commissioned a study by eminent

environmentalist Professor Peter Cullen and notedhydrologist

Professor Russell Mein that will examine ways of optimising

the use of water resources in greater Melbourne.

The study will consider the most appropriate ways of

using an abundant supply of high quality effluent that

will become available as a result of major upgrades of

Melbournes two major sewage treatment plants. It aims

to guide integrated water resource management

throughout Melbourne in the next 20 years.

Placing a high value on our water

This year, a positive community response to water

conservation messages, the understanding of water

storage levels and the introduction of water restrictions

helped curb Melbournes water consumption, despite a dry

summer. Peak daily consumption of 2212 million litres

well below the maximum historic daily peak levels of more

than 3000 million litres was recorded on 25 J anuary

2003 when the temperature reached 44.1 degrees.

Melbourne Water continued working to increase

community understanding and awareness of drought.

These education programs aim to ensure the community

values and appreciates our water, leading to long-term

behavioural change.

In our annual tracking study, held in October 2002, 97

per cent of Melbournians surveyed were able to estimate

the level of Melbournes water storages. And 60 per cent

of people said the water storages were between 50

and 59 per cent full, which was correct at the time

of the survey.

A Newspoll market research study conducted in mid-June

2003, found that more than six in 10 respondents knewthe storage level within two percentage points, and 44

per cent of respondents knew the exact storage level.

Dasarath Jayasriya, manager in our Resources and Environment

group, has developed a Memorandum of Understanding with theMunicipal Association of Victoria to assist councils implement

sustainable water use plans.

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The study found that this result was due to television

weather bulletins, our newspaper and radio advertisements,

and strategically located billboards featuring electronic

displays of our water storage levels.

Information on Melbournes water supply system was

translated into 10 languages for ethnic press and radio

advertisements throughout the year.

Melbourne Water also participated in the planning of a

major behavioural change campaign undertaken by the

Victorian Government.

Conserving a scarce resourceMelbourne Water is developing and implementing water

conservation programs that minimise wastage in our

system, reduce demand through more efficient use, and

substitute drinking water with recycled water for purposessuch as garden watering to meet the Victorian

Governments policy objective to reduce water

consumption by 15 per cent by 2010.

The context of this challenge is increasing demands

on the resource, driven by population growth and

development, and climate change, which has the

potential to impact on our water resources.

Our action plan

During the year, in consultation with CSIRO Urban Water,

we developed a Water Conservation Action Plan that

proposes initiatives to achieve water savings of 13,000

million litres a year by 2010.

The plan proposes industry partnerships, community

education and engagement, management efficiency

and water recycling to deliver the savings by increasing

sustainable water use in the community, improving

understanding of our water resources, and changing

patterns of behaviour among young people.

Innovative partnerships wit h industry

This year we invested $1.4 million on a range of

industry and community education programs including

training workshops to accredit plumbers and gardeners

in sustainable water practice.

The landmark GreenPlumbers Caring for our Waterprogram was expanded, with a further 150 plumbers

achieving accreditation. There are now 350 plumbers

with GreenPlumberaccreditation in Melbourne.

The program, run by Melbourne Water and the Master

Plumbers and Mechanical Services Association of

Australia, teaches plumbers and plumbing apprentices

about water conservation, stormwater pollution and waste

disposal methods so that they can provide better advice

to the community.

The Senate Environment, Communications, Information

Technology and the Arts Reference Committee said

in its report The Value of Water: An Inquiry into Australias

Urban Water M anagement, that the program shouldprovide the model for similar accreditation programs

targeting all professions with a role in

water management.

This year we developed the GreenGardeners accredited

training program with partners Sustainable Gardening

Australia, Landscape Industries Association of Victoria,

Holmesglen Institute of TAFE and Environs Australia.

Landscape gardeners and nursery staff across

Melbourne can attend workshops on sustainable

gardening presented by qualified trainers. The training

workshops, which began in June 2003, provide

information on issues such as stormwater run-off,use of chemicals and fertilisers, non-invasive plants

and water conservation.

We also provided funding for a pilot project in 12 garden

centres and nursery businesses to increase community

awareness of the environmental impact of gardening

and landscaping.

Melbourne Water is extending our commitment to training

industry professionals in water management by developing

programs for builders and architects.

Stormwater recycling at public housing estates

Melbourne Water is investing $200,000 during 2003

to roll out a water conservation program in Melbourneshigh-rise public housing estates. The program,

a partnership with the Victorian Governments Office

of Housing, will reduce water usage in public housing

estates by recycling stormwater to irrigate gardens.

A pilot program at Prahrans King Street housing estate

will save more than 150,000 litres of drinking water a

year. A stormwater and greywater recycling project planned

for the Atherton Gardens estate in Fitzroy is designed

to save six million litres of drinking water a year.

Partners in sustainability

Melbourne Water is working with councils to develop

customised sustainable water use plans. This follows apilot project in late 2002 with the City of Melbourne that

developed a sustainable water management strategy and

created a template for other councils.

Sue Brooker, one of the first graduates of the Melbourne Water

GreenGardeners training program, is passionate about changing

attitudes to garden maintenance and design.

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In June 2003, in a joint project with the Municipal

Association of Victoria, we made $300,000 available

to other metropolitan councils over two years for the

development of sustainable water use plans. Each

council is invited to apply for a grant of $10,000 to

fund a tailored plan.

Municipal Association of Victoria President Brad Matheson

said the program demonstrated local governments

long-term commitment to working in partnership with

communities and other stakeholders to address

water conservation.

This is a practical example of how state and local

government agencies are working together to deliver

tangible water savings while encouraging all people to

be responsible for conserving their water use, he said.

Other practical examples, also involving energy use, willbe demonstrated as part of a partnership between the

Sustainable Energy Authority of Victoria and Melbourne

Water. Under the partnership, established in April 2003,

projects will be developed to showcase sustainable water

and energy management.

Minimising leakage from our system

Melbourne Water delivers drinking water via 1000

kilometres of distribution mains and more than 200

kilometres of aqueducts and tunnels.

We invest about $100,000 a year rehabilitating and

reducing leakage from our aqueducts, most of which

were built in the 1880s. The aqueducts transfer waterfrom Melbournes reservoirs to our seasonal storages.

Work during the year included rehabilitation of the Wallaby

Aqueduct in Kinglake and Maroondah Aqueduct near Yarra

Glen. We estimate this program saved 1070 million litres

of water during the year.

Recycling wat er t owardsa greener futureA valuable water resource

Water recycling is a key part of creating a sustainable

water supply for Melbourne. Water recycling reduces

the discharge of treated effluent to bays and the ocean,creates economic growth, and conserves supplies of our

precious drinking water, which in turn can defer the need

to build further water storages.

Melbourne Water believes that treated effluent should

be regarded as an important and valuable water resource.

People in and around our city use almost 500,000 million

litres of water a year for a variety of industrial, commercial,

farming and household purposes. Many of these uses do

not require drinking quality water.

Melbourne Water is investigating a range of water

recycling schemes using treated effluent, from our Eastern

Treatment Plant at Bangholme and our Western TreatmentPlant at Werribee, in agriculture, horticulture and

vineyards, or to irrigate golf courses and sporting fields.

The challenge is to ensure these schemes achieve

sustainable, economic and social outcomes.

This year we supplied 1979 million litres of recycled water

to 34 customers and used another 31,186 million litres

within our sewage treatment plants more than 11 per

cent of the total discharge from these plants and a

significant increase from the previous year.

The Victorian Government, in its Water Recycling Action

Plan announced in October 2002, set a target to increase

water recycling in Melbourne to 20 per cent by 2010.

Developing opport unities west of M elbourne

Low rainfall, concentrated land ownership and large areas

of land that could be improved by irrigation present major

opportunities to expand water recycling schemes inMelbournes west, using an abundant supply of high

quality recycled water from the Western Treatment Plant.

Seizing new opportunitiesRoss YoungGroup Manager, System Planning

About 20 per cent of our high quality drinkingwater gets flushed down the toilets, andanother 30 per cent goes directly on togardens. Victorias prolonged drought has hithome to everyone that this practice is simplynot sustainable.

The dilemma spend billions on a new damor a fraction of that implementing better

water practices. The new frontier in waterthat Melbourne Water has embraced is betterintegration of drinking water, stormwater andrecycled water. The best way we can see thatapplied is in new housing estates.

Every day about 20 new homes are completedin Melbourne, so we really need to seize theopportunity to make sure that theseintegrated water applications are in placeas soon as possible.

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Werribee Tourist Precinct

Supply of recycled water to the Werribee Tourist Precinct

began this year after the completion of a six-kilometre

pipeline from the Western Treatment Plant. Some 84

million litres was used by 30 J une 2003.

This project, our first offsite recycling scheme in the

Western region, will supply about 160 million litres of

recycled water a year to the Werribee Park Golf Course

and the National Equestrian Centre. The pipeline is

designed to accommodate the future requirements

of other potential customers in the precinct, including

Victorias Open Range Zoo and Parks Victoria (which

runs the Werribee Mansion).

Balliang district

The Balliang district, north-west of the Western Treatment

Plant, contains 70,000 hectares of land in a low rainfallarea, readily accessible to the transport and infrastructure

of Melbourne and Geelong. A Melbourne Water-led

engineering study completed in December 2002 explored

the potential of a trunk pipeline to supply recycled water

from the Western Treatment Plant to the district.

The pipeline could irrigate up to 10,000 hectares of dry

cropping land, significantly increasing agricultural and

horticultural production. Major issues to be addressed

are the salt content in the effluent and environmental

issues associated with large scale dryland irrigation.

Developing opportunit ies east of M elbourne

The Eastern Treatment Plant has sold recycled water tocustomers south-east of Melbourne to irrigate agriculture

and open spaces since the 1970s. The planned $170

million upgrade of the plant should open up new

opportunities by improving the quality of recycled water

(from Class C to Class A) through tertiary filtration,

enhanced disinfection and reduced ammonia.

This year, Melbourne Water commissioned a study to

investigate water recycling opportunities for agricultural,

industrial, recreational and urban uses in the eastern region.

The first phase of the study, costing $100,000 and jointly

funded by Mornington Shire Council and Frankston City

Council, evaluated opportunities along the 56-kilometre

pipeline from the Eastern Treatment Plant to Boags Rocks,

where treated effluent is discharged to Bass Strait. The

study looked at current and future market demand, land

capability, water quality and the costs of using recycled

water to irrigate council recreational reserves, golf

courses, orchards, vineyards and vegetable crops.

The second phase, jointly funded by South East Water,

incorporated the results of phase one into a broader

investigation of opportunities including potential urban

demand in greenfield developments and existing

residential areas. A draft report on the comprehensive

study, including assessment of anticipated volumes and a

ranking of potential schemes, was delivered in June 2003.

Eastern Irrigation Scheme

A 1999 Melbourne Water study identified a potential

demand of 8000 million litres of recycled water in acorridor from Carrum to Cranbourne and Koo Wee Rup.

That study initiated the development of the Eastern

Irrigation Scheme to deliver recycled water from the

Eastern Treatment Plant for horticultural, agricultural,

urban and recreational irrigation. The aim of the scheme

is to deliver 5000 million litres of Class A recycled water

to the Fiveways district.

In January 2003, a pipeline between the Eastern

Treatment Plant and the Sandhurst Club development in

Carrum was completed, enabling the irrigation of a new

golf course with Class C recycled water for much of

summer. When fully developed, Sandhurst will comprise

1850 homes and two golf courses, and use 600 million

litres of recycled water a year.

Onsite recycling

Melbourne Water continued to pilot and demonstrate

recycling through onsite water recycling (also known as

water or sewer mining). A portable water recycling plant

used to irrigate Kings Domain gardens during a trial

last year was upgraded and installed at Albert Park.

During May and June 2003, the plant extracted and

treated sewage from the Albert Road main sewer to

supply recycled water for park irrigation and for use in

Albert Park Lake. The trial demonstrated the potential

HOW EXISTIN G EASTERN TREATM ENT PLANT CUSTOM ERS USE RECYCLED WATER

Type of scheme Produc t t ype Volume used 2002 / 03 Percent age

(million litres)

Horticultural Nursery/ turf farm/ flowers/ vineyard/ orchard 500 29.8

Agricultural Hydroponics/ market garden 426.6 25.5

Silviculture Foliage 20 1.2

Dust control Biosolids dust control 58.6 3.5

Municipal Golf courses/ recreational reserves 666 39.8

Aquacultural/ ornamental Wetlands 3.8 0.2Total 1675 100

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for membrane technology to remove nitrogen and

phosphorus from effluent before it was discharged

into the lake.

Aquifer storage and recovery

In a study concluded in November 2002, Melbourne Water

assessed the feasibility of using depleted or degraded

aquifers to store recycled water from the Eastern and

Western Treatment Plants.

Excessive withdrawal from underground supplies has

depleted aquifers in some areas of Victoria and, in some

cases, allowed salt to degrade the reserves. Recharging

the wells with recycled water may provide a suitable

alternative to on-farm storage, reducing evaporation

and improving water quality.

The study identified an aquifer near Werribee as a

viable site for a storage and recovery trial.

Smart Water Fund

The Victorian Government launched the Smart Water

Fund in November 2002 to promote water recycling,

water conservation and biosolids use. We will contribute

$1 million over the next two years for innovative

water schemes.

A selection of 27 projects won the first round of funding

in May 2003. They range from onsite recycling in

commercial buildings, racecourses and parklands,

to enabling nurseries to recycle water using

peat-based biofilters.

Investigating water recyclingPeta MaddyWater Recycling(Project Manager, Western Projects)

The current extended dry period has reallyfocused everyones attention on maximising

water recycling opportunities.We now have four major projects usingrecycled water from the Western TreatmentPlant that are proceeding well.

These include the Balliang Project, which isdesigned to create a new irrigation area in atraditionally low rainfall area west of Melbourne.

We are working to enable Werribee Southmarket gardeners to access recycled water forirrigation. This will allow natural environmentalflows to return to the Werribee River.

The Wyndham water-sensitive residentialproject should see new urban development onthe outskirts of Werribee using recycled waterfor gardens and open space, and potentially,toilet flushing.

The Werribee Tourist Precinct should seerecycled water for golf courses and theNational Equestrian Centre.

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PROTECTING TH E ENVIRONM ENTProtecting our Waterways and Bays

Goals:

Operate in a manner to improve the environment

Improve the health and amenity of Port Phillip and Western Port baysfor the prosperity and enjoyment of present and future populations

Ensure that Melbournes natural waterways are healthy withincreased numbers of nat ive fish, plat ypus and plant l ife

Ensure the community is well educated and informed on water issues

Achievements

Key Challenges

Disappointments

> Achieving our greenhouse reduction and renewable energy targets by 2005/ 06.

> Finding cost effective ways to remediate biosolids at the Western Treatment Plant to enablethem to be recycled.

> Achieving our goal of eliminating offensive odours from any Melbourne Water asset by 2007.

> Meeting our target that all natural waterways in greater Melbourne will be in good conditionby 2025.

> Reducing nitrogen entering Port Phillip Bay from the stormwater system by 100 tonnes by 2010.

The planned major upgrade of the Eastern Treatment Plant was delayed by a legal challengeto the EPA Victoria works approval.

Delays to the Eastern Green Energy Project, which was designed to provide about half the powerneeded to run the Eastern Treatment Plant, meant Melbourne Water produced 2000 tonnes ofcarbon dioxide equivalent above target for the plant.

Failed one odour limit from our odour control facility at the Eastern Treatment Plant. Received 22 odour complaints from our sewage treatment plants and transfer system. While this

was about one-third less than last year, our goal is zero complaints.

Failed to maintain environmental flows in the Yarra in April 2003 by allowing pumping from theriver to continue for several hours after the flow dropped below the required level.

Invested $14.4 million on new treatment facilities at the Western Treatment Plants lagoons

to reduce nitrogen flowing to Port Phillip Bay by 500 tonnes a year.

Completed four wetlands that will reduce nutrients entering waterways and Port Phillip Bay bya further 14 tonnes a year.

Sourced substantial markets for biosolids generated at the Eastern Treatment Plant as a majorstep towards achieving our target to recycle all of the biosolids we produce.

Opened the $2.5 million Water Discovery Centre at the Western Treatment Plant in Werribeeto showcase water issues and increase community knowledge of water resources.

About 850,000 trees, shrubs and grasses were planted to improve the long-term health ofwaterways.

The Melbourne Water website, www.melbournewater.com.au, was further improved and receivedmore than 360,000 visits during the year.

Bought the first seven of a planned 25 hybrid electric and petrol-powered vehicles as part ofour commitment to environmentally sound operations.

Completed the CSIRO sediment study to increase our understanding of factors that affect theenvironmental health of Western Port as part of a $686,000 waterways environment researchprogram.

Submitted Victorias first two Streamflow Management Plans to the Minister for Water that willbalance the needs of users while protecting the waterways environmental flows.

Minimised the effects of the unprecedented drought conditions on the environmental healthof the Yarra River.

16

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Melbourne Water ANNUAL REPORT 2002/ 03

Lionel ShawBunnings Northland Em ployee

Lionel shows off the water storageposters that Melbourne Waterdeveloped with Bunnings and Nylex.The posters feature in each Bunningsstore throughout greater Melbourneand are updated weekly with the latestwater storage level. This program alsosupports our partnership with Bunningsto promote smart paint disposal in theinterests of protecting stormwater quality.

17

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18

PR O TEC TIN G TH E EN VIR O N M EN T

Our sewerage system

Our sewerage system includes Melbournes two main

sewage treatment plants and 400 kilometres of major

sewers. We also operate three major and several minor

sewage pump stations.

Retail water companies collect sewage and trade waste

from households and businesses and send it to Melbourne

Water for treatment. The retail water companies manage

the concentration and quantities of pollutants in industrial

sewage through Trade Waste Agreements with industry.

This year we treated 302,897 million litres of sewage and

trade waste collected by the retail water companies.

The Western Treatment PlantThe Western Treatment Plant at Werribee is the largest

sewage treatment facility in Australia, covering 10,850hectares (about the size of Phillip Island). It was designed

and built more than 100 years ago to treat Melbournes

sewage. The plant treats more than 500 million litres of

sewage a day from about half of Melbournes population

and a large proportion of the citys industry. Treated

effluent is discharged into Port Phillip Bay.

The Western Treatment Plant holds an accredited licence

from EPA Victoria to discharge to the environment. The

accredited licence reflects trust in Melbourne Water to

display high levels of responsibility in its operations of the

plant. It was granted because the plant has an Environmental

Management System, an audit program, an Environment

Improvement Plan and a history of clean operation.

Reducing nitrogen flows to Port Phill ip Bay

The $124 million upgrade of the Western Treatment Plant,

due to be completed in 2005, will reduce nitrogen flowing

to Port Phillip Bay by 500 tonnes a year. This reduction is

being achieved by installing new treatment facilities at lagoons.

The upgrade will improve effluent quality, significantly

increase opportunities for water recycling, reduce greenhouse

gas emissions and improve air quality. It also includes a

conservation management plan.

The first half of the upgrade, the enhancement of the 55

East lagoon, was commissioned at the end of 2001. The 25

West lagoon, due to be upgraded by December 2004, willdeliver the second half of the plants nitrogen reduction.

This year, we completed detailed design work for the

upgrade of this lagoon and began works to install an

activated sludge plant to improve nitrogen removal and

expand biogas capture and handling. Biogas, a byproduct

of the sewage treatment process (mainly methane), is

used to help power the plant (see Reducing greenhouse

gas emissions, page 20).

The environmental upgrade is a key feature of the

Western Treatment Plants Environment Improvement Plan.

We worked with the Community Liaison Committee to

revise this plan, which will guide further environmentalimprovements over the next three years. It covers

renewable energy generation, water recycling, biosolids

use, agricultural practice, conservation management, and

environmental objectives and actions.

Protecting biodiversityThe Western Treatment Plant has been listed as a wetland

of international importance under the Ramsar Convention,

and is an area of ecological significance because of its

size, location on Port Phillip Bay, and the presence of

several threatened species.

The environmental upgrade is subject to monitoring and

research to assess its impact on the plants conservation

values. Melbourne Waters conservation management

program involves wildlife monitoring, studies and

investigations, and habitat maintenance activities.

The Arthur Rylah Institute, on behalf of Melbourne Water,

is monitoring migratory birds, waterfowl, wading birds, and

cormorants at the plant. This extensive program, which

builds on similar work undertaken from 2000 to 2002,

began in February 2003 and will continue for three years.

During Summer, the Victorian Wader Study Group trapped

and tagged migratory shorebirds at several sites within

the plant as part of a worldwide effort to monitor migration,

survival and reproduction rates of these species.

Fauna and flora studies completed this year confirmed

that the Western Treatment Plant supports a range of

environmentally significant species requiring careful

management. Detailed studies were conducted on the

rare Growling Grass Frog, Fat-tailed Dunnart, Swamp

Harrier and Spiny Rice Flower.Our extensive weed and vermin control programs included

an ecological burn of 100 hectares of the Lake Borrie Spit

grassland in May 2003. It was the first time that Melbourne

Water has used fire for weed control and regeneration of

native grassland species. The burn, conducted with the

Country Fire Authority, was intended to especially benefit

a population of the nationally significant Spiny Rice Flower.

EPA Vict oria licence c ompliance

Melbourne Water complied fully with our obligations for

effluent discharge parameters under EPA Victoria's

licence. Detailed tables appear in our Water Resources

and the Environment Report 200 2/ 03.

The East ern Treatment PlantEvery day the Eastern Treatment Plant at Bangholme

processes 370 million litres of sewage from Melbournes

eastern and south-eastern suburbs. This is about 42 per

cent of Melbournes sewage.

The 1000-hectare plant, which opened in 1975, uses an

activated sludge process to treat sewage. A small amount

of treated effluent is recycled and most is discharged

under EPA Victoria licence via a 56-kilometre pipeline into

Bass Strait at Boags Rocks. Three smaller treatment

plants operated by South East Water also discharge

treated effluent into the pipeline.

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the quality of effluent leaving the plant through tertiary

filtration, enhanced disinfection and ammonia reduction.

Flows into and out of the plant would also be reduced

through water conservation and recycling programs.

The upgrade was based on a sustainable water resource

maintenance plan that had the support of the community.

An extension to the outfall was not recommended.

As part of the works approval process, EPA Victoria

appointed an independent panel to review our proposal.

The panel approved the works plan and recommended

the shoreline outfall at Boags Rocks be extended by two

kilometres into Bass Strait. EPA Victoria approved the

works plan in J uly 2002, and the Clean Ocean Foundation

appealed against the decision. The Victorian Civil and

Administrative Tribunal dismissed this appeal in March

2003, but the Clean Ocean Foundation has sought leaveto appeal the decision in the Supreme Court. Works are

on hold pending a court ruling.

Studying the quantity and quality of flows to t he plant

When EPA Victoria approved Melbourne Waters proposed

major upgrade to the Eastern Treatment Plant, it requested

that we undertake:

A study of the potential to achieve a 12 per cent

reduction in sewage inflows into the plant by 2012

An audit of the trade waste component of the inflow.

In April 2003, we engaged consultants to undertake these

studies. The inflow reduction study will examine water

recycling opportunities and potential measures to reducewater demand. The audit will identify strategies to reduce

trade waste pollutants and flows, and ensure that trade

waste does not compromise water and biosolids recycling.

Reducing ammonia in treated effluent

An important element of the upgrade is a $47 million

project to reduce ammonia levels in treated effluent by

more than 75 per cent. The project began in August 2002

after a successful $5 million six-month pilot in one of the

plants six aeration tanks. Ammonia reduction is achieved

by the incorporation of a treatment process, called

nitrification-denitrification, into the existing system.

Monit oring the marine environmentMelbourne Water continues to monitor closely the treated

effluent discharged from the Eastern Treatment Plant and

its impacts on the marine environment.

In April 2003, the second phase began of a wide-ranging

study of the marine environment, managed by the CSIRO.

The study is examining effluent toxicity, its dilution and

dispersion into the environment at Boags Rocks, and its

effects on marine flora and fauna.

The survey will provide a baseline against which future

monitoring results may be compared. The interpretation

and assessment of this studys results will be presented

in August 2003.

Melbourne Water ANNUAL REPORT 2002/ 03 19

A sanctuary for wildlifeWill SteeleWildlife and Wetla nds Scientist

While the plant operated well under its discharge licence

from EPA Victoria, a two-year environmental study

completed in 1999 by the CSIRO showed that the

effluent, which contains freshwater and ammonia, was

affecting the marine environment.

Environmental upgrade

As a result of the environmental study, EPA Victoria

required us to upgrade the plant and reduce these impacts.

Melbourne Water proposed a $170 million upgrade to theEastern Treatment Plant, which would significantly improve

Melbourne Waters weed and vermin controlprogram at the Western Treatment Plant ishelping to make the area an even bettersanctuary for native wildlife.

It is an enormous job to transform a completelyman-made site of this size into a wildlife-friendly zone. But the desire is there to protectremnant vegetation, to keep out vermin and

ever-devouring noxious weeds, to provide a havenfor about one-third of Australias bird species.

It is the broad range of birdlife that the hugearea of permanent water attracts that makesthe Werribee plant a unique sanctuary. Thecoastal, wetland, and wading birds all makea home there. With the introduction ofstrategically planted trees, raptors are alsoable to use the area as a hunting ground.

And it is not just the birds that benefit.Because there is relatively little humandisturbance, other wildlife such as the nationally

endangered Growling Grass Frog has a homethere as well.

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20


Assuring safety and quality of effluent and biosolids

Melbourne Water used the drinking water quality system

principles of the Hazard Analysis and Critical Control Point

system and the ISO 9001 standard as the basis of a draft

quality plan for the Eastern Treatment Plant.

The plan covers the risks to safety and aesthetic quality

associated with recycled water and biosolids provided

from the plant.

The plan, a requirement of the works approval for the

upgrade of the treatment plant, will be submitted to EPA

Victoria when it is completed. We intend to pursue

certification of the treatment process to an international

quality standard.

Planning to improve the environment

A condition of the EPA Victoria licence for the Eastern

Treatment Plant is that it has an Environment Improvement

Plan. The plan details how Melbourne Water will achieve

the required environmental standards, and describes how

we will improve on that performance.

This year, we worked with the Community Liaison Committee

to revise the existing plan published in September 1999.

The updated plan will incorporate all key environmental

initiatives at the plant included in the proposed major

upgrade. We aim to finalise the plan in 2004.

EPA Vict oria licence compliance

Melbourne Water complied with all but one obligation

under EPA Victorias discharge licence for the Eastern

Treatment Plant an air emission licence parameter whenan odour control facility exceeded its stack odour limits.

Detailed tables appear in our Water Resources and the

Environment Report 2002 / 03.

Eliminating sewage spills

Melbourne Water must manage our sewerage system so

that we experience no spills under normal rainfall conditions.

Under very heavy rain, which would occur once in every

five years, some stormwater can infiltrate sewers leading

to overflows when capacity is exceeded. Such overflows

are directed through emergency relief structures to

prevent impacts on private property and public health.

We have a rigorous program to contain these spills even

in a one-in-five-year rainfall event. This standard is among

the highest in the world and we are upgrading our

infrastructure to eliminate sewage spills due to overflows.

No sewage spills to the environment occurred this year.

This was contributed by low sewage flows due to the drought.

Sustainable management of biosolidsBiosolids are the treated and stabilised solids in sewage.

In the past, Melbourne Water has stored biosolids at oursewage treatment plants. Despite the vast amount of

space at these plants, storing biosolids is not a sustainable

approach and we accept our responsibility to put by-products

from our operations to beneficial use. Our target is to

recycle all the biosolids we produce by 2010.

The quantity of stored biosolids at the Western Treatment

Plant is significantly greater than at the Eastern Treatment

Plant because of the age of the plants. The Western

Treatment Plant was opened in 1897 and the Eastern

Treatment Plant in 1975.

The biosolids stored at our Eastern Treatment Plant are

of a higher quality, due largely to Trade Waste Agreements

that have improved the quality of industrial waste flowing

to our treatment plants in recent years.

EPA Victoria requires biosolids to be stored for three years

before allowing recycling.

Establishing market s for biosolids

This year Melbourne Water recycled 28,342 tonnes of

biosolids (equivalent to one years production plus some

stored biosolids), all from the Eastern Treatment Plant.

These biosolids were used in blended soils and to fill

a disused clay pit at the Woodlands Industrial Estate in

Braeside. A one-metre thick clay liner and cap will seal

in the biosolids and mitigate seepage, in accordance with

an EPA Victoria works approval and licence.

In February 2003, we called for expressions of interest

from companies with potential uses for biosolids from the

Eastern Treatment Plant. At 30 June 2003, Melbourne Water

had agreements with three companies to use biosolids in

the blended soil market.

Developing new opportunities

There is potential to use a range of technologies to exploit

the energy value of biosolids, which has been compared

with brown coal. Thermal processes have been developed

that extract energy and generate power from sludges.

Energy recovery is becoming more feasible with the

introduction of the Federal Governments Renewable EnergyCertificates program, in which organisations that produce

renewable energy receive certificates for each megawatt-

hour they produce, enabling them to sell surplus certificates.

Melbourne Water is registered in this program as a

generator of renewable energy through our hydro-electricity

and biogas plants.

Reducing greenhouse emissionsAs community expectations and regulatory requirements

become increasingly rigorous, so too are our requirements

to minimise our impact on the environment. These higher

environmental standards (together with population growth)

require increased energy usage, generally for pumping

water and sewage, and operating the most modern and

effective sewage treatment processes.

2002/03

2001/02

2000/01

1999/00

1998/99

1997/98

1996/97

Number of spills

36

31

3

0

0

8

6

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Electricity consumption and methane emissions from

sewage treatment are the largest contributors to Melbourne

Waters greenhouse gas emissions.

We have established targets to reduce our emissions and

their impact on climate. By 2005/ 06, we aim to reduce

our greenhouse gas emissions by 35 per cent compared

with 2000/ 01 levels, and we will cut our use of electricity

from the grid by 10 per cent over the same period. We

will achieve this by using renewable energy created in our

own treatment processes, conserving energy and reducing

direct emissions. This will also minimise our impact on

the environment and reduce costs.

Greenhouse gas em issions

Capturing biogas at the Western Treatment Plant

The major upgrade of the Western Treatment Plant

includes significant energy initiatives.

Treatment lagoons are being covered to capture biogas

a by-product of our sewage treatment process to help

power the plant.

In October 2002, Melbourne Water completed an upgrade

of the gas extraction system at the treatment plant. This

year, the power generation plant operated by AGL Ltd

used captured biogas to generate 18.1 gigawatt hours of

electricity that would otherwise have been imported from

the grid, saving about 26,500 tonnes of carbon dioxide

equivalent. These figures will increase to 24 gigawatt hours

and 32,200 tonnes when the plant runs at full capacity.

One gigawatt hour is enough energy to run an average

Melbourne household for 100 years.Eastern Green Energy Project

Melbourne Waters major upgrade of the power station

and outfall pumping station at the Eastern Treatment

Plant, originally planned for completion by September

2003, has been delayed by an industrial dispute.

The delayed works meant Melbourne Water produced

2000 tonnes of carbon dioxide equivalent above target

this year therefore increasing our 2003/ 04 emissions

above target levels.

Generating green energy from our water supply system

As part of our renewable energy program, Melbourne Water

continued to plan for the construction of 14 hydro-electric

power plants in our water supply system. When completed,

these plants will generate 66 gigawatt hours of renewable

energy a year. This year we finalised plans and next year

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

Actual Forecast

559,986

476,098

461,524

475,569

343,656

305,620

305,021

we will establish contracts with the successful tenderers

to build and operate the plants.

Environmentally friendly fleetMelbourne Water has a commitment to environmentally

friendly fleet vehicles and, in June 2003, we bought the

first seven of a planned 25 hybrid electric and petrol-

powered vehicles to replace existing fleet cars. The rest

will be incorporated into the fleet by the end of 2004.

The Toyota Prius hybrid vehicles use about 50 per cent

less fuel compared with similar-sized vehicles and

produce 46 per cent of the emissions. Each is expected

to achieve a saving of 4.5 tonnes of carbon dioxide

equivalent a year.

Our no-odour objectiveMelbourne Water aims to minimise our impact on thecommunity. We have an objective that there will be no

offensive odour from Melbourne Waters assets by 2007.

Community expectations of acceptable odour levels from

sewage treatment have risen in recent years. Melbourne

Water received 22 complaints from the public about odour

emanating from our treatment plants and transfer system.

This is half the number received in 2000/01. Each odour

complaint is investigated to reduce the source of odours.

Our EPA Victoria licence does not permit offensive odours

beyond the boundary of the Eastern Treatment Plant. By

2005/ 06, the licence for the Western Treatment will also

disallow odour beyond the boundaries.Achieving our objective

This year Melbourne Water completed a strategy to

achieve our no-odour objective. The odour management

strategy details several odour mitigation projects.

We are also working to reduce odour from our sewerage

system and at the same time manage the impact of

odorous gases from sewers. Appropriate odour

management can be achieved through, for example,

installing a treatment facility, chemically dosing sewage,

or blocking offending vents. Melbourne Water operates

four odour control facilities throughout the sewerage system.

Protecting our waterways and baysThe people of Melbourne place a high value on our

waterways and bays, which provide habitat for native

species and recreational amenities for people. Port Phillip

and Western Port bays are essential environmental,

economic and recreational assets for Victorians.

Community expectations of our waterways and bays have

increased considerably, especially in recent decades.

Considerably more stringent environmental standards

and regulations now reflect the value we place on these

natural assets.

Measuring the environmental health of our wat erways

The health of many waterways has been damaged by landclearing, loss of native vegetation, urbanisation, water

harvesting, infestation by weeds and introduced species,

and polluted by run-off.

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22


0 10 20

kilometres

WESTERN PORT

BASS STRAIT

PORT PHILLIP BAY

Not rated

Excellent

Good

Moderate

Poor

Very poor

Urban

Rural

Forest

Only 28 per cent of the streams we manage are in

excellent or good condition, with 25 per cent in moderate

condition, and 47 per cent in poor or very poor condition.

Waterways are rated against the Index of Stream Condition

a measure developed by a scientific panel for the

Department of Sustainability and Environment. Ratings

are calculated by bringing together information on flow

regime, water quality, and condition of the channel,

streamside areas and aquatic life within the stream.

Most of the waterways in excellent or good condition are

in our water supply catchments or forested areas. Densely

populated urban catchments are mostly in poor or very

poor condition.

Planning healthy catchment s

Environmental scientists and planners from Melbourne

Water are working with the Port Phillip and WesternportCatchment Management Authority to manage waterways

through a regional approach. Our work is aligned with the

Victorian Governments River Health Strategyfor managing

Victorias rivers and catchments over the next 20 years.

This strategy was released in August 2002.

Improving w aterway habitat

Melbourne Water invested $23.3 million this year to improve

the long-term health of our waterways. We planted about

850,000 trees, shrubs and grasses along streamsides,

stabilised banks, removed invasive non-indigenous trees,

removed instream barriers for fish, and investigated and

planned new works. Community and volunteer groups

made an important contribution to revegetation.

Condition rat ings for waterways in the greaterMelbourne area % of Total Waterway Length

Condition of M elbournes waterways 200 2 20 03

Excellent

Good

Moderate

Poor

Very Poor

12

35

25

12

16

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Working with the community to revitalise our waterways

Through the stream frontage management program,

Melbourne Water is enabling landholders to revitalise their

waterways damaged by erosion and loss of natural

vegetation. We fund weed removal, planting of indigenous

species along banks, and fence out livestock. Property

owners, Landcare and volunteer groups undertake the work.

This year, some 348 properties benefited from the

$900,000 program. A total of 122,680 trees, shrubs,

grasses and sedges were planted, and more than 78

kilometres of fencing erected.

Since the programs inception in 1996/ 97, more than

$3.3 million has been provided to 1230 landholders to

improve and protect almost 370 kilometres of waterways.

In addition, 12 councils received funding for 27 waterway

sites in the fourth round of Melbourne Water Corridorsof Green funding. The program provided $193,500 for

streamside revegetation works along 22 waterways, with

almost 64,000 plants established.

Melbourne Water is committed to supporting and working

with community members who give up their time to

protect and enhance the environment, especially through

revegetation and weed control along waterways. This year,

we provided a range of community, Landcare, Friends of

and other volunteer groups with almost $100,000 to

support 42 waterway improvement projects.

We contribute about $100,000 a year to Melbourne

Waterwatch, an environmental education program thathelps schools, community and environment groups

monitor their local waterways for stream life, habitat and

water quality. Melbourne Water is the regional co-ordinator

of the program in the Port Phillip and Western Port region

and this year more than 9300 people in 295 groups

monitored 566 sites.

Research into w aterway health and aquatic life

We invested $640,000 in research into waterway health

and aquatic life this year including a comprehensive

study of aquatic invertebrates in the Moonee Ponds

and Yuroke creeks.

In June 2003, the Water Studies Centre at Monash

University completed a three-year research program

for Melbourne Water into the effects of urbanisation

on stream ecology. It found that the efficiency of urban

drainage systems is the most important factor in the

degradation of aquatic life in urban streams. Slowing the

flow of stormwater, for example, using grasses or reeds,

improves water quality.

We also commissioned the Keith Turnbull Research

Institute, a partner in the Co-operative Research Centre

for Australian Weed Management, to assess risks of

new and emerging weeds in our waterways, recommend

herbicides suitable for riparian environments, and develop

methods to selectively kill weeds.

In early 2003, Melbourne Water and the Centre for

Environmental Stress and Adaptation Research investigated

the movement of the introduced mosquito fish in urban

streams and artificial wetlands. The research will help

Melbourne Water prevent mosquito fish from entering into

new wetlands.

Bringing fish back t o our waterways

Barriers to fish passage in waterways can be created

by structures such as dams, weirs and road crossings.

These structures hamper access to habitat and limitmigration of some species, especially native fish, which

affects breeding cycles. We provide a continuous passage

for fish and other aquatic animals in major waterways by

building fishways or fish ladders.

This year we built a fishway on Cardinia Creek to enable

native fish to pass a structure built to stabilise the banks.

Surveys carried out in Bunyip River in the Westernport

catchment following the construction of a fishway found

that there has been a significant increase upstream in the

range and numbers of nat

Documents

2002-03 Annual Report