MEDIA RELEASE

Manukau Water Issues Statement of Intent

Manukau City (30 July, 2007) – Manukau Water Limited has published its Statement of Intent (SOI) for the three years ending June 30, 2010.

The purpose of the SOI is to state publicly the activities and intentions of the company. It also provides a basis of accountability for the directors of the company to its shareholders for the performance of the organisation. Manukau Water Limited is wholly owned by Manukau City Council and the SOI has been prepared in line with Section 64 of the Local Government Act 2002.

The SOI sets outs the objectives and performance targets for Manukau Water Limited for the three years to June 30, 2010 and describes the nature and scope of the activities the company will undertake to achieve these objectives.

Although the SOI is the second to be prepared for Manukau Water Limited, it continues to reflect the early stages of the company’s establishment. As the organisations settles into its new status as a Council Controlled Organisation (CCO), annual amendments will be made to the SOI to reflect its changing environment.

The SOI reiterates Manukau Water’s mission, which is to provide high quality and cost effective water and wastewater services to the people of Manukau.

The document also notes that Manukau Water Limited does not intend operating for the purpose of making a profit and return on equity is not a business driver for the company. To avoid any doubt, as part of its pricing approach the business will not be required to generate a commercial return on its assets. It is, however, required to meet statutory and legal obligations and the Council expects the company to operate to achieve the following:

- Positive operating cashflow;

- Operating cashflow that should cover capital expenditure for renewal of existing assets;

- New capital investment that should be funded from a mix of retained earnings and new debt; and

- Financial gearing ratios that should be kept at a level appropriate for an infrastructure business.

The Statement of Intent recognises that Manukau Water Limited will undertake a comprehensive review of its current wastewater tariff structures and make a recommendation to Council by December 2007.

About Manukau Water

Manukau Water Limited is responsible for the management of the public water distribution and wastewater collection systems for the people of Manukau. The company serves approximately 338,000 people living in an area covering 552 square kilometres from Mangere, Pakuranga and Howick in the north to Manurewa in the south. It manages infrastructure assets worth nearly $1 billion. Manukau Water Limited does not operate for the purpose of making a profit, but it is required to recover its costs from customers. For the next financial year the company is forecasting a loss, mainly due to investment in new infrastructure.

ENDS

© Scoop Media