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GMW’s overall business is made up of the irrigation business and non-irrigation business, which includes non-regulated, bulk water, surface diversions and groundwater.
Marsden Jacob Associates developed a 50-year financial model for the panel that focused on each business area. This was to assess GMW’s long-term financial sustainability, the business lines it operates, and the level of change required.
The intended outcomes of recommendations 1 to 4 included lower prices for customers and a sustainable GMW, established as a regional leader, better positioned to meet community expectations, with strong business practice and prudent and efficient financial management.
Two recommendations have been completed:
Short-term operating and capital expenditure target (2018-2024): a further 10% efficiency in both operating and capital expenditure for gravity irrigation, plus 29% for pumped irrigation, drainage, water districts and fee-for-service businesses from 2019-20.
Confirmation of savings targets following further modelling work in 2018.
The original wording for Recommendation 1 reflected savings targets subject to further modelling work and validation under Recommendation 4.
Once Recommendation 4 was completed, the focus of Recommendation 1 was adjusted.
Final savings targets adopted are outlined in the table below.
Final savings targets adopted
|Short-term (2018 to 2024) $million||Short-term (2025 to 2040) $million||Short-term (2041 to 2067) $million|
|Average annual savings||19.4||45.0||32.6|
Recommendations 2 and 3
Recommendations 2 and 3 involving medium and long-term targets for operating and capital expenditure have been embedded in GMW’s ongoing business practices.
These will be delivered through GMW’s Service Strategy and Financial Sustainability Strategy. GMW’s Board, Service Planning Committee and Risk and Finance Committee will monitor progress, and this will be reported in the Corporate Plan.
A new era for GMW and its customers
- A landmark $64m reduction in GMW’s revenue requirement from the previous pricing period, enabling it to reduce costs and implement several important changes to its tariff structure.
- Reduced water prices for most customers from July 2020.
- A common water delivery charge introduced across GMW’s 6 irrigation districts.
Case study: GMW Pricing Submission 2020-24 - a pricing reset
The Essential Services Commission (ESC) price submission process requires water corporations to prepare a pricing submission for the forward four-year regulatory period for approval by the ESC.
In June 2020, the ESC approved GMW’s price submission for the 2020-24 pricing period. It set out the prices GMW customers pay, the services they receive from 1 July 2020 to 30 June 2024 and how the savings identified through the Strategic Advisory Panel review will be achieved.
The price submission led to a forecast reduction in GMW’s revenue requirements of $64 million over the 2020-24 period and more affordable water prices, with most customers benefitting from a drop in fixed charges of around 10%.
Page last updated: 08/09/23