We divide our expenses into two categories:
- Opex (operational expenditure) describes our day-to-day expenses.
- Capex (capital expenditure) describes our bigger one-off or project-based expenses.
Our proposed budgets for each category are outlined below.
Our capex program
What is capex?
Capital expenditure, called capex, is typically an organisation's larger expenses or projects, with benefits that continue over a long period. Examples of capex projects include upgrading to more accurate water meters, introducing hydro-electric power on our sites and replacing the roofs on our reservoirs when they've reached the end of their life.
How you influenced our program
We've sought feedback from you on what types of services and response times were more or less important, and have made adjustments to our program based on this - for example in our Water Mains Replacement Program below.
How much are we proposing to spend?
For the next five years, we propose a $408 million capex program including $162 million for investment in water assets and $245 million for investment in sewerage assets. This doesn't just include new projects though - some projects are already underway and we'll continue those, just as some new projects we're starting in this period won't be finished until after 2023.
What are we focussing on?
The main focus (65%) of our capex proposal is allocated to renewing assets nearing the end of their useful life. We'll also invest significantly in upgrading and expanding the network to support population growth (18%). The remaining 17% will be used to improve assets to make sure we continue to meet our regulatory obligations and respond to opportunities to work more efficiently.
Lower Molonglo bioreactor projectRead More
Water meter renewals programRead More
Reservoir roof replacement programRead More
Sewer main replacement programRead More
Hydro-electric powerRead More
Digital customer experience projectRead More
Water main replacement programRead More
Asset management and maintenance systemRead More
Safe work at heightsRead More
This section is a summary of Attachment 6 Capex in our 2018-23 water and sewerage price proposal.Download
An overview of our opex
Opex includes everything from maintaining our assets (such as pipes, pumps, reservoirs, vehicles and treatment plants), planning costs (the cost of making sure we are managing our $2.4 billion asset base in the most prudent and efficient way), all our behind-the-scenes expenses (including staffing) in areas like safety, environment, customer service and finance.
All of the above is classified as controllable opex, which means we can influence how much we spend.
We also have costs that are uncontrollable, which makes up approximately 23% of total opex and are charges payable to the ACT Government. These are explained in more detail further down.
Remember, if you would like to know more detail you can download our revised submission.
We need enough opex to
- Keep our network running reliably, including the extra costs of new assets we've constructed.
- Be ready to meet future demand for water and sewage services, including increases in connections as Canberra continues to grow.
- Meet our compliance obligations, like releasing water from our dams to maintain rivers downstream, or cleaning water to particular standards. There are 74 different Acts and codes which control our operations!
- Maintain our assets for as long as it's prudent and efficient to do so.
So what's our proposed opex budget?
Our total opex for the next five years is expected to be $854 million, which is around 4% lower compared with the previous five years.
This section is a summary of Attachment 7 Opex in the 2018-23 Water and Sewerage Price Proposal.Download
We have a rigorous and robust prioritisation system to make sure we are spending money on the right things.
This process tells us where to invest and how to get the best outcome. We call this being prudent and efficient. This rigorous process gets us to our final expenditure proposal - which leads us to work out what we would need to charge for water and sewerage services.
Click through the accordion below to see all the boxes our projects have to tick before we go ahead.
We are governed by the Territory Owned Corporations Act 1990 (TOC Act) which identifies four objectives for how we operate. We also have a Statement of Corporate Intent (SCI) which we build on top of the objectives in the TOC Act, which have additional strategic objectives for the next four years.
Our projects and expenditure have to align to these objectives.
We have four investment drivers:
- growing of our service capability
- renewing of our service capability
- increasing our efficiency
- meeting regulations.
All our projects must also align to one of these. If they don't, we don't do them.
We undertake condition assessments so we know which assets need to be repaired, upgraded or replaced most urgently, and cross reference this with a rating of the impact (financial, environmental and inconvenience) if the asset failed.
For this submission we engaged external experts to independently review our largest projects (which makes up 75% of our capex proposal in dollars spent).
This helps make sure they have been properly scoped and costed and that each project has an accurate risk profile.
This section is a summary of Attachment 5 Asset Management Governance in our 2018-23 water and sewerage price proposal.Download