Operational Plan SUPPLY

Transcription

1 Operational Plan e SO URCE 11 SUPPLY 0

2 Seqwater OperatiOilai Plan r<t-seq~~i~f ~ Performance agreement Board statement and agreement of Responsible Ministe!'s Seqwater's Operational Plan for the financial year 20"15-20"16 is presented in accordance with Part 4 of the South East Queensland Water (Restructuring) Act 2007 (Restructuring Act). This Operational Plan represents a formal performance agreement between the Board of Seqwater and its Responsible Ministers, the Honourable Curtis Pitt, Treasurer, Minister for Employment and ndustrial Relations and Minister for Aboriginal and Torres Strait lslancler Partnerships, and the Honourable Mark Bailey, Minister for Main Roads, Road Safety ancl Ports and Minister for Energy and Water Supply with respect to the financial and nonfinancial performance targets specified for the financial year. The Operational Plan also represents an acknowledgement and agreement on major activities, objectives, undertakings, policies, investments and borrowings of Seqwater for the financial year. This Operational Plan is consistent with Seqwater's Strategic Plan 2015~2020. n signing this Operational Plan, Seqwater agrees to take all reasonable steps to ensure the plan is executed, and that all reports to the Responsible Ministers are accurate and timely. Seqwater will promptly advise the Responsible Ministers of any major changes to the key assumptions and outcomes detailed in this Operational Plan which come to Seqwater's attention during the year. Any changes to this Operational Plan will be dealt with in accordance with the Restructuring Act. This Operational Plan is signed by the Chairman on the Board on behalf of all the members in accordance wit~ a unanimous decision of the Board of Seqwater. The Honourable Curtis Pitt MP Treasurer, Minister for Employment and ndustrial Relations and Minister for Aboriginal and Torres Strait slander Partnerships Date: The Honourable Mark Bailey MP Minister for Main Roads, Road Safety and Ports and Minister for Energy and Water Supply Date: Doc no. FNAL Version date; 31 May 2015 Trim D: D JS/180'187 Doc owner: CEO Doc; approver: The Boarcl r~ev no. Page 2 of 33 The conlrollacl version of this docurnent is registered All olher versions are uncontrollecl

3 ~ eqwater o_~eratiorial Plan water WATER FOR LFE Contents Perfonnance agreement Contents... 3 Part 1: Objectives... 4 Seqwater's core business Part 2: Undertakings... 5 Strategic outcomes for Strategic choice for Key undertakings for Measuring success... 9 Financial key performance indicators Non-financial key performance indicators Risks to delivery of objectives Community service obligations Part 3: Financials Financial performance Financial statements Assets Operational and capital expenditure program Sponsorship, advertising, corporate entertainment, donations and other activities Part 4: Other undertakings Prudent financial information Capital structure Weighted Average Cost of Capital (YVACC) Annual return policy Corporate governance Compliance with Government policies Risk management Bulk water pricing rrigation pricing Network service plans Attachment 1: Strategic Plan Strategic Plan - Five year financial outlook Attachment 2: Policies Recreation management framework Treasury policy Open data Remuneration arrangements ndustrial relations and employment plan Seqwater Certified Agreement productivity initiative Doc no. FNAL Version date: 31 May 2015 Trim D: 01 5/ Doc owner: CEO Doc approver: The Board Rev no. Page 3 of 3 T11e controll ed version of thi s document is registered. All other versions are uncontroll ed.

4 Seqwater Operational Plan _ ~, seq~~,!~~ j Part 1: Objectives Seqwater's core business Vision Healthy communities. Prosperous region. Purpose Partnering to deliver, safe, secure and cost-effective water and catchment services to our customers and communities. Values We work safe We deliver We work together We each make a difference. We continually improve Role Seqwater is the Queensland Government's statutory authority responsible for ensuring a safe, secure and reliable bulk drinking water supply for 3.6 million people across South East Queensland. Seqwater is also responsible for essential flood mitigation services, and provides irrigation services to about 1,200 rural customers in seven water supply schemes. One of Seqwater's key responsibilities is the long term planning of the region's future water supplies. Seqwater manages recreation facilities that provide more than 50% of the green space in South East Queensland outside of national parks. n 2014, more than 2.75 million people visited Seqwater's recreation areas. Seqwater is one of Australia's largest water businesses, with the most geographically spread and diverse asset base of any capital city water authority. Operations extend from the New South Wales border to the base of Toowoomba Range and north to Gympie. Assets include dams, weirs, water treatment plants, reservoirs, pumps, pipelines and climate resilient water sources like the Gold Coast Desalination Plant and the Western Corridor Recycled Water Scheme. Seqwater's only subsidiary is the Australian Water Recycling Centre of Excellence Ltd. The Australian Water Recycling Centre of Excellence is enhancing the management and use of water recycling nationally and internationally through industry, research and government partnerships. Statement of Obligations The Statement of Obligations is issued by the Responsible Ministers pursuant to 51A of the South East Queensland Water (Restructuring) Act 2007 and outlines Seqwater's strategic priorities and functions that must be performed to meet the requirements of the Responsible Ministers. The Operational Plan is aligned with the Statement of Obligations and articulates the activities that Seqwater will undertake to meet its commitments under the Statement of Obligations. Doc no. DRAFT Version date: 31 March 2015 Trim D: 0 15/12424 Doc owner: CEO Doc approver: The Board Rev no. Page 4 of 4 The controlled version of this document is registered. All other versions are uncontrolled.

5 ~ l 'Seqwater Operational Plan Part 2: Undertakings Strategic outcomes for Seqwater's objectives for align with its Strategic Plan , in particular the following strategic outcome areas: Strategic outcome area Skilled and committed workforce Knowledgeable and engaged communities Trusted and respected partner Optimised water and catchment services Sustainable financial performance Description Our workforce is motivated, empowered and agile, driving change and delivering for our customers and communities. We engage with our customers and communities providing opportunities to understand what we do and seeking feedback to improve our services. We work collaboratively with partners to improve performance and explore new opportunities across the region. We take every opportunity to optimise the way we deliver water and catchment services to benefit customers and communities. Stakeholders have confidence in the efficiency and long-term sustainability of our business. Seqwater's priorities and key performance indicators are outlined in its Strategic Plan (Attachment 1 ). Strategic choice for To deliver on its commitments and drive value for customers in , Seqwater has implemented an improved approach to enterprise performance management. Seqwater assesses the cost, risk, impact and benefit of all significant business initiatives as part of its strategic management system. Visibility of this information enables the business to make more informed choices about resource allocation and invest in initiatives that will return measurable benefits to the organisation, shareholders and customers. This process increases transparency and accountability. This improved approach helps Seqwater to execute its commitments and continually improve core service delivery. Doc no. FNAL Version date: 31 May Trim D: 01 5/80187 Doc owner: CE O Doc approver: The Board Rev no. Page 5 of 5 The controlled version of th is document is registered. All other versions are uncontrolled.

6 r eqwater Operational Plan _-, -1 Key undertakings for : Skilled and committed workforce Seqwater will: Timeframe KP Link --- continue to make safety our number one priority across Ongoing Lost time injury frequency all aspects of the business through Seqwater's positive throughout rate safety, cultural, behavioural and wellbeing programs 2016 Significant injury implement an updated permit access safety system to By December 2015 frequency rate support positive safety behaviours and streamline the site access process Completion of incident investigation outcomes to schedule J engage the workforce and align its culture to support Ongoing Workforce availability strategy execution throughout Workforce turnover 2016 (cumulative) complete capability assessments for all employees to By June 2016 ensure a capable and skilled workforce drive a culture of performance through extending By December 2015 performance plans to include all employees covered by the Seqwater Certified Agreement commission a business intelligence system to improve By June 2016 Capital expenditure the transparency and quality of planning and decision (CAPEX) spend against making budget Capital efficiencies achieved (against estimated costs of approved projects) decommission information systems that no longer serve Ongoing Operational expenditure the business. throughout against budget (excluding 2016 efficiencies achieved) Knowledgeable and engaged communities Timeframe KP Link Seqwater will: implement our customer engagement framework Ongoing Community awareness or throughout understanding of high 2016 impact projects implement a long term program to engage with Ongoing Unprompted brand customers about Seqwater projects, programs and throughout awareness initiatives to earn their trust and respect 2016 commence community engagement on the Water Ongoing Security Program (Version 1) in preparation for throughout completion of Version 2 in hold biannual two-way information sharing forums for Six monthly Partner engagement irrigation customers rating provide a range of recreation opportunities at our water Ongoing Community awareness or supply lakes. throughout understanding of high 2016 impact projects Unprompted brand awareness Doc no. FNAL Version date: 31 May 2015 Trim D : 015/80187 Doc ow ner: CEO Doc approver: The Board Rev no. Page 6 of 6 The controllecl version of this document is registered. All other versions are uncontro lled.

7 r 'Seqwater Operational Plan 201-5~ ~Tf f Seqwater ',, --- WATER FOR LFE i Trusted and respected partner Timeframe. KP Link Seqwater will: finalise the Water Security Program (Version 1) for By 4 July 2015 Community awareness or South East Queensland to meet the Water Act 2000 understanding of high impact projects commence Water Security Program (Version 2 - By July 2017 Drought Response Plan) for South East Queensland Unprompted brand ready for submission in 2017 awareness implement an integrated water quality management By June 2016 Zones compliant with the system from catchment to tap (Partnership Water Quality Australian Drinking Water Plan) with all SEQ water service providers Guidelines Planned savings achieved from Water Service Providers' Partnership initiatives as part of its Catchment Greenprint program, provide Ongoing Catchment risk reduction resources to support the collaborative project team throughout actions implemented developing regional catchment action plans in 2016 Partner engagement partnership with government and other stakeholders. rating i Optimised water and catchment services Timeframe KP Link Seqwater will: optimise its overall system operation to improve water Ongoing Zones compliant with the quality from the raw product and minimise operating throughout Australian Drinking Water costs 2016 Guidelines Operational expenditure against budget (excluding efficiencies achieved) deliver efficiencies in the use of energy, chemicals and Ongoing Variable operating cost of resources throughout water supplied from the 2016 seven major WTPs continue execution of works to improve the water supply Ongoing Compliance with bulk resilience of the Mt Crosby water treatment plants throughout water agreements 2016 operate North Pine, Somerset and Wivenhoe dams in Ongoing Compliance with dam accordance with the approved flood operation manuals throughout safety manuals and other 2016 requirements manage other dams in the portfolio in accordance with Ongoing dam safety legislation, in particular provisions relating to throughout Emergency Action Plans 2016 continue the design of the dam improvement upgrade of Ongoing Lake Macdonald (Six Mile Creek Dam) throughout plan and deliver a program that will enable Seqwater to By June 2016 Compliance with bulk more efficiently and reliably monitor and control the water agreements operation of its asset base Doc no. FNAL Version date: 31 May 2015 Trim D: 0 15/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 7 of 7 The controlled version of this document is registered. All oth er versions are uncontrolled.

8 r. Seqwater OperatiorialPlan water WATER FOR LFE Optimised water and catchment services - - ', Ti~eframe KP Link ' enhance asset and investment information systems to Ongoing Benchmark maintenance deliver reliable and accurate infrastructure and project throughout costs against like water data to make informed management and investment 2016 industry organisations decisions about Seqwater's assets develop and implement a new strategy that clearly By June 2016 All future KPls demonstrates the value, prudency and efficiency of Seqwater's research programs deliver a water treatment plant performance dashboard By December 2015 Operational expenditure that will further enable operational staff to monitor and against budget (excluding improve the efficiency of their assets efficiencies achieved) ensure continued operation of the Flood Operations Ongoing Emergency preparedness Centre with required staff and training in accordance throughout exercises completed with the Annual Statement of Preparedness deliver an Environmental Education Program to 80% of By June 2016 Community awareness or all target personnel areas understanding of high impact projects - Unprompted brand awareness develop and deliver Stormwater Management plans for By June 2016 Compliance with all operational WTP Assets environment protection obligations Sustainable financial performance ' 1 Timeframe ' KP Link Seqwater will: achieve efficiency targets as provided in the Seqwater Six monthly Workforce availability Certified Agreement contingent wage Workforce turnover increase (cumulative) Operational expenditure against budget (excluding efficiencies achieved) continue to improve asset management practices and Ongoing Capital efficiencies integrate longer planning horizons throughout achieved (against 2016 estimated costs of approved projects) finalise and implement the strategic asset management By June 2016 Benchmark maintenance plan, including reliability targets and performance costs against like water monitoring measures industry organisations actively manage and better understand Seqwater's risk Ongoing Completion of enterprise profile and appetite. throughout risk mitigation actions to 2016 schedule Completion of internal audit actions to schedule Emergency preparedness exercises completed Doc no. FNAL Version date: 31 May 2015 Trim D : 0 15/ Doc owner: CEO Doc approver: The Board Rev no. Page 8 of 8 The contro lled version of thi s document is registered. All other version s are uncontrolled.

9 [ 'SeciwaterOperation-al Plan ~~ l Measuring success The below strategic key performance indicators will be used to transparently monitor and assess Seqwater's success. Financial key performance indicators ; [ indicator J Annual target Rationale i YTD - ' ' Operational expenditure against budget (excluding efficiencies achieved) Facilitate tracking against OPEX O to -5% of approved budget commitments $11,854,000 Variable operating cost of Facilitate tracking against OPEX water supplied from the seven reduction commitments based on $73/ML majorwtps medium raw water quality Capital expenditure (CAPEX) spend against budget Capital efficiencies achieved (against estimated costs of approved projects) Provides a means for early indication of over or under spend against the capital budget - target 0-10% of quarterly forecast Tracks achievement of CAPEX savings target specified in QCA submission and included as a negative item in Other nfrastructure in table of assets under construction $97.0M to $107.?M $5.36M Non-financial key performance indicators - ndicator Rationale Annual target ~~- : l Lost time injury frequency rate Provides a broadly accepted S4.0 industry metric related to safety performance Significant injury frequency rate Provides a broadly accepted S2.0 industry metric related to safety performance Completion of incident Provides an indication of the timely 100% investigation outcomes to implementation of improvements schedule identified following incidents Workforce availability Provides an indication of workforce 96% engagement levels Workforce turnover (cumulative) Provides an indication of the <10% turnover of staff from establishment positions i Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 9 of 9 The controlled version of this document is registered. All other versions are uncontrolled.

10 J 'Seqwater Operational Plan~20~5~ ~016 ndicator Rationale ' Annual target Completion of enterprise risk Provides an indication of the timely 100% mitigation actions to schedule implementation of actions to reduce major organisational risks Completion of internal audit Measures the timely response to 100% actions to schedule audit findings Community awareness or Provides an indication of Establish baseline understanding of high impact knowledgeable and engaged projects community Report on individual projects Unprompted brand awareness 1 Provides an indication of the 26% success of our advertising and engagement campaigns Partner engagement rating 1 Provides an indication of the 75% effectiveness of our engagement with partners Planned savings achieved from Provides an indication of the ~90% delivered against plan Water Service Providers' partnership's effectiveness at Partnership initiatives reducing whole of supply chain costs Compliance with bulk water Measurement of service standards No breaches agreements Zones compliant with the Measurement of service standards 100% Australian Drinking Water Guidelines Scheduled maintenance tasks Provides an indication of adherence ~95% of tasks completed within delivered on time to the scheduled maintenance scheduled quarter program Benchmark maintenance costs Provides an indication of Benchmarking against like water against like water industry performance against like water industry organisations completed organisations industry organisations Catchment risk reduction Provides an indication of the ~90% actions implemented delivery of high priority catchment improvement initiatives Emergency preparedness Provides an indication of 100% exercises completed commitment to emergency readiness 'Measured by independent customer research. -- Risks to delivery of objectives The following summarises the enterprise risks potentially impacting on the achievement of Seqwater's performance outcomes in , as well as the mitigation strategies in place to respond to these risks. These risks are assessed, managed and monitored through the application of Seqwater's Enterprise Risk Management Framework. Seqwater's risks are continually reviewed to align with the internal and external environment. Doc no. FNAL Version date: 31 May 2015 Trim D: 0 15/ Doc owner: CEO Doc approver: The Board Rev no. Page 10 of 10 The controllecl version of this clocument is registered. All other versions are uncontrolled.

11 'Seqwater Operational Plan Seqwater's enterprise risks and key mitigation strategies are as follows: Risk Fatality or serious injury to an employee or contractor Fatality or serious injury to a member of the public Failure to maintain an efficient sustainable business Unable to attract and retain capable people Failure to deliver a long term economic water supply for South East Queensland Unable to maintain water quality and or continuity of water supply Major asset failure Key mitigation strategies Seqwater's certified Workplace Health and Safety Management System is continuously reviewed to ensure the organisation meets its legislative requirements and adopts a best practice approach to safety. A Safety Culture and Behaviour Program has been designed to continuously improve positive safety behaviours in the workplace to prevent unsafe acts by addressing workers attitudes through training, consultation and communication. A Health and Wellbeing Program has been designed to continuously improve employee wellbeing, assist in injured worker's return-to-work and rehabilitation and reduces workers health risk factors through programmed activities. Seqwater has implemented a community information campaign, Play it safe, dedicated to raising awareness of the importance of safety at recreational sites. Seqwater maintains a comprehensive scheduled recreation maintenance plan. Seqwater actively monitors and responds to feedback received from the public about recreational areas. Effective board and business governance to ensure longer term financial planning and future pricing both support balance sheet management. Seqwater has established an Enterprise Portfolio Office to drive the efficiency and effectiveness of internal projects and the execution of strategy. Seqwater has developed a cultural alignment program to drive a culture that engages and empowers staff. Seqwater conducts an annual employee survey and follows an extensive improvement planning process in response to the survey results. Seqwater is developing an employee attraction and retention strategy. To retain appropriately qualified and talented staff, Seqwater has adopted a succession planning process. Seqwater is committed to appropriately engaging with the Board and Department of Energy and Water Supply during the development of the Water Security Program. Seqwater engages with an independent review panel for review and feedback on the Water Security Program. Seqwater is developing a community engagement strategy for subsequent stages of the project. Seqwater's management tools (i.e. Drinking Water Quality Management Plan and supporting programs) are mature and are comprehensively applied across the business. Seqwater has secured SO certification for additional four sites (Drinking Water Quality Management System). Seqwater routinely reviews relevant operational procedures and maintenance schedules. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 11 of 11 The controlled version of this document is registered. All other versions are uncontrolled.

12 t seqwater,., WATER FOfl LFE ~ ~- J.'Seqwater Operational Plan 2015~ r Risk Failure to effectively manage an emergency situation Key mitigation strategies Seqwater has an integrated asset management plan, dedicated to the detection and treatment of risks to the asset base. Seqwater has a dam safety improvement program that addresses any identified risks. Seqwater's emergency management capability is predicated on a philosophy of continual improvement. Using a combination of risk identification of emerging risks and lessons learnt from actual disruption events plans, procedures are reviewed and updated to increase organisational resilience to emergencies. Establishment of a new integrated Emergency Control Centre (linking Flood Operation Centre, Network Control Room and Emergency Management Centre). Doc no. FNAL Version date: 31 May 2015 Trim D: 0 151aorn7 Doc owner: CEO Doc approver: The Board Rev no. Page 12 of 12 The controlled version of this document is registered. All other versions are uncontrolled.

13 Community service obligations The Community Service Obligations (CSOs) Agreement for the period 7 July 2014 to 28 August 2017 has been agreed between Seqwater and the State of Queensland. The CSOs apply to Water Supply Schemes operated and managed by Seqwater where the price received for water provided for irrigation purposes is, by direction, less than the cost of the provision of the water. The table below sets out the amounts of CSO payment, by Tariff Group, that the Department of Energy and Water Supply will pay to Seqwater for the period 1 July 2015 to 30 June Tariff group CSO payment Cedar Pocket Dam $134,972 Central Brisbane River $14,210 Central Lockyer Valley $713,231 Logan River $1, 172 Lower Lockyer Valley $856,744 Mary Valley $11,532 Morton Vale Pipeline $88,672 Pie Creek $265,020 + ($113 x Water UsaQe (ML)) Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 13 of 13 The controlled vei'sion of this document is registered. All other versions are uncontrolled.

14 ~~~~~~~~-- - 'Seqwater Operational Plan Part 3: Financials Financial performance n accordance with the medium to long-term objectives of the Plan, Seqwater undertakes to achieve, t th f. f. rf t t ~~ ,, Performance Targets Unit Budget Budget ' Forecast 'i Actual ' :., Statement of Comprehensive ncome ' - Operating Re\.enue ($000) 827, , , ,499 - EBT ($000) 341, , , , nterest Expense ($000) 534, , , ,316 -NPBT ($000) (193,436) (236,856) (212,546) (400, 155) Statement of Financial Performance - Total Net Assets Equity ($000) 1,060, ,543 1,254, 164 1,459,745 Statement of Cash Flows - Net Cash Flow ($000) 40,000 10,000 (4,281) (149,866) ) i -, , Ratios ' T Unit ' Budget Budget '. l~ Ratios 1l Forecast ' Actual - Current Ratio Debt to Equity Ratio Time interest earned Debt Ratio Return on Assets % (2%) (2%) (2%) (4%) - Equity Ratio % 10% 3% 11% 13% - Return on Equity % (18%) (71%) (17%) (27%) Seqwater's undertaking to achieve its financial performance outcomes is predicated upon the following assumptions: ~. Assumf)tion-s.- l r.;._.. 9~ ff;1 Economic ndices - CP 2.5% less 2.5% efficiency target - Wage Growth 2.5% (certified agreement) - Long Term nterest Rates Range 4.89% to 6.21% Revenue - Water Sales Distribution retail revenue is calculated using the Queensland Competition Authority draft report SEQ Bulk Water Price Path November 2014 for year and forward vears estimates. Operating Expenses Seqwater The operational forecast using a zero base line basis. Doc no. FNAL Version date: 31 May Trim D: 0 15/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 14 of 14 The con trolled version of th is document is registered. All other versions are uncontrolled.

15 ~ eqwater Operational Plan~ J Financial statements S.tamJ t f h ' Operating Revenue 11,, ii,r ,, J' -. Unit ' 1 Budget 11 Budget, Forecast Actual i. -,,1 Water services ($000) 805, , , ,818 nterest ncome ($000) 1,678 1,253 1,236 2,415 Other Re1.enue ($000) 4,056 5,717 14,993' 9,977 rrigation CSO Rewnue ($000) 4,991 ~ 5,169,! 4,455 Hydro Rewnue ($000) Grant Rewnue ($000) 11,382 11, ,512 16,400 TOTAL OPERATNG REVENUE ($000) 827, , , ,499 Operating Expenses Employee expenses ($000) 76,818 79,737 77,817 79,550 Supplies and services ($000) 160, , , ,255 TOTAL OPERATNG EXPENSES ($000) 237, , , ,805 Depreciation and Amortisation ($000) 249,372' 220, , ,077 Revaluation decrement ($000) ,456 Finance/Borrowing costs ($000) 534, , , ,316 TOTAL EXPENSES ($000) 1,021,068 1,033,601 1,023,850 1,120,654 PROFT (LOSS) BEFORE NCOME TAX ($000) (193,436) (236,855) (212,546) (400,155) Please note rounding applies to Table above $ ooo Notes to the comprehensive income statement: Water sales - distribution retail revenue is calculated using the Queensland Competition Authority final report SEQ Bulk Water Price Path for year and forward years estimates. The prices have been recommended from QCA for the period to with a 2.5% p.a. increase from ; unless stated otherwise by QCA. Water sales - power stations Toowoomba Regional Council (TRC) sales include only the fixed charges for and TRC $5M. The TRC fixed charge to access Wivenhoe water has been escalated by CP each year. No variable revenue for Toowoomba has been included at this point. Please note the change in financial position in year , where the forecast changes from a repeated loss to a profit before tax. The Employee Expenses budget has reduced by $2.9M in comparison to the Original Budget, primarily due to the decrease in other employee related expenditure such as overtime, allowances, training and professional development and bonus payments. The Supplies and Services Budget has reduced by $30.9M in comparison to the Original Budget, predominantly due to: Doc no. FNAL Version elate: 31 May 2015 Trim D: 015/80'187 Doc owner: CEO Doc approver: The Board Rev no. Page 15 of 15 The controlled version of this document is registered. All other versions are uncontrolled.

16 'Seqwater Operational Plan a. A reduction in external contractor costs - relating to the Western Corridor Recycled Water Scheme (WCRWS). Fixed expenses reduced by $8.2M (consisting of $5.5M for the care and maintenance program and $2. 7M for the decommissioning) compared to the original Budget of $17.6M, mainly due to reduction of employee costs and various repairs and maintenance works. b. The desalination plant (GCDP) fixed expenses have reduced by $1 M mainly due to the reduction of employee costs and preventative maintenance works. c. The 'Maintaining our Future' (MOF) project has identified a $5M reduction in the budget and forecast years. The MOF project has targeted a sustainable reduction in maintenance costs through a better understanding of our assets as well as implementing initiatives that allow more efficient maintenance service delivery. Scheduled maintenance, reactive maintenance and planned maintenance costs have reduced due to the reduction of full time contractors utilised from the maintenance panel, reducing it from 33 to 22. d. The supply system O&M contract - fixed expenses budget consists of a $2.BM reduction in lump sum fee for scheduled maintenance (due to better understanding of our assets) and variable fees for unplanned (reactive) services work, mainly due to the unpredictable nature of reactive maintenance work. e. The water source operations and management budget has reduced by $2.4M due to major effort to reduce consultant costs to a minimum by using internal resources and training staff to complete work otherwise outsourced. There were a number of studies and inspections that were conducted and completed in f. Water quality and environment has reduced their costs by $1 M; this result is mainly driven by dissolution of the catchment water quality team and the costs have been absorbed by other teams in the group. g. Asset capability and sustainability has reduced costs by $1M compared to the budget. These reductions are due to the newly created team for source protection planning which looks after the natural assets planning program. This restructure has enabled the works with the asset capability team to use only inhouse resourcing for their programs and eliminate all consultancy costs. h. Natural Asset Maintenance Projects (NAMP) the required maintenance budget for NAMPS in was reduced by $1 M after consultation with other areas of the organisation. Seasonal impacts and dependency on the completion of NAMPS capital projects that require on-going maintenance will impact this budget item. i. The renewal and minor works program has been reduced by $2.6M compared to the budget in line with updated business cases and revised priorities. j. Variable costs decrease of $3.3M is due to a combination of improved efficiencies including anticipated optimisation of chemical and energy contracts. Variable costs include costs relating to sludge removal, chemical treatment.cleaning chemicals (i.e. chemical costs) and variable energy costs. These costs are solely related to water treatment and desalination activities and include costs associated with outsourced operational arrangements. Doc no. FNAL Version date: 31 May 2015 Trim D: 0'15/80187 Doc owner: CEO Doc approver: Tile Board Rev no. Page 16 of 16 The controlled version of this document is registered. All other versions are uncontrolled.

17 'Seqwater Operational Plan ff' ,1 - Unit )[ Budget i! - 11 : ' ' _ Budget Forecast Actual : - :, ' ' Current assets Cash and cash equivalent ($000) 80,000 70,000 40,000 44,281 Trade and other recei1rc1ble ($000) 130, , ,330 98,282 lnwntories ($000) 6,863 6,445 6,863 6,863 Other current assets ($000) 3,811 4,042 3,811 22,810 Total current assets ($000) 221, , , ,236 Property, plant and equipment ($000) 10,533,450 10,024,783 10,678,095 10,813,001 Other Non-Current Assets ($000) 170, , , ,751 Total non-current assets ($000) 10,703,570 10,876,924 10,835,932 10,957,752 TOTAL ASSETS ($000) 10,924,766 11,083,580 11,012,936 11, 129,988 Current liabilities Trade and other payables ($000) 32,566 44,673 31,415 43,577 Employee Benefits ($000) 8,320 7,741 8,320 8,320 nterest bearing liabilities ($000) 34,387 35,193 35,683 34,648 Other current liabilities ($000) 11,382 11,382 11,382 11,548 Total current liabilities ($000) 86,655 98,989 86,800 98,093 Non-current liabilities Employee Benefits ($000) 11,327 11,876 10,328 9,327 Loan - interest bearing liabilities ($000) 9,386,419 9,445,973 9,270,626 9, 160,072 Deferred tax liabilities ($000) 51, , ,961 51,961 Other non current liabilities ($000) 327, , , ,790 Total non-current liabilities ($000) 9,777,383 10,649,048 9,671,973 9,572,150 TOTAL LABLTES ($000) 9,864,038 10,748,037 9,758,772 9,670,243 NET ASSETS/(LABLTES) ($000) 1,060, ,543 1,254,164 1,459,745 Equity Contributed Equity ($000) (715,888) (722,854) (715,888) (722,854 Accumulated Profit (Losses) ($000) (239,700) (287,412) (46,263) 166,283 Asset Revaluation Resen.e ($000) 2,016,316 1,345,809 2,016,316 2,016,316 TOTAL EQUTY/(DEFCENCY) ($000) 1,060, ,543 1,254, 164 1,459,745 Notes to the statement of financial position: Prudent cash management of working capital provides for the lowest possible cash balances month-to-month, thus providing optimal investment and financing savings. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 17 of 17 The controlled version of this document is registered. All other versions are uncontrolled.

18 [' Seqwaler Operationa(Plan Statement of cash flows ii ;! _!.)nit Jf _ Budg~t _,~ Budg!_t Cash flows from operating activities /nf/01m>: ' Forecast. Actual i <,[ -- - l - - Receipts from water ser.,ices ($000) 803, , , ,484 Receipts from leases, rentals and other (incl. CNF) ($000) 6,472 3,500 6,720 15,877 nterest recei\ed ($000) 1,678 1,253 1,236 2,407 Outf/01M>: ($000) Payments to suppliers and employees ($000) (234,930) (255,400) (254,143) (255,487) nterest paid ($000) (535,913) (541,990) (543,447) (617,254) Net operating cash flows ($000) 41,216 (28,253) (36,625) (162,973) Cash flow from investing activities /nf/01m>: Proceeds from sale of plant and equipment ($000) 29,908 1,232 OulflolM>: Payments for acquisition of property, plant and equipment ($000) (117,009) (122,444) (108, 118) (92,904 Net nvesting cash flows ($000) (117,009) (122,444) (78,210) (91,672 Cash flows from financing activities Jnf/01M>: QTC Borrowings Capitalised nterest ($000) 115, , , ,779 Outflows QTC Borrowings - Redemption ($000) - 50,000 Net financing cash flows ($000) 115, , , ,ng Net increase (decrease) in cash held ($000) 40,000 10,000 (4,281) (149,866) Cash at the beginning of the financial period ($000) 40,000 70,000 44, , 147 Cash at the end of the financial period ($000) 80,000 80,000 40,000 44,281 Financials: parent entity Not applicable (see above). Financials: subsidiary (Australian Water Recycling Centre of Excellence) Not applicable (see above). Assets Major assets The following major assets are 100% owned by Seqwater: Dams Weirs Water treatment plants Water pump stations Recycled water treatment plants Doc 110. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev 110. Page 18 of 18 The controlled version of this document is registered. All other versions are uncontrolled.

19 'Seqwater Operational Plan water WATER FOR L FE Desalination plant Pipeline network Recycled water pipelines rrigation channel. Seqwater will continue to seek opportunities to derive the maximum value from water assets, including decommissioned assets and those in standby modes. Subsidiary entities: assets Not applicable (see above). Operational and capital expenditure program Repairs and maintenance The following table relates to the operating expenditure programs for catchment, recycled water, desalination and network assets for the financial years: ' Repair and maintenance activity Budget Description ($'000) Provision of tactical and natural asset maintenance Strategic maintenance planning program 2,130 planning and strategic asset maintenance enqineerina. Provision of asset maintenance and repairs to ensure Scheduled, planned and reactive maintenance 15,090 facility and system operability, maintainability, safety programs and oroduct aualilv. Provision of land maintenance activities for dams and Catchment and land maintenance program 7,969 WTPs and other catchment maintenance activities associated with ooerational assets. Minor works 4,970 Asset refurbishment to sustain asset performance and make minor imorovements. Repairs and maintenance (recycled water and Overall maintenance expenditure for manufactured 6,613 desalination) water sources. Budget total 36,772 Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 19 of 19 The controlled version of this document is registered. All other versions are uncontrolled.

20 'Seqwater Operational Plan water WATER FO R LFE Business development Seqwater reports on business development matters as requested via the ad hoc Ministerial reporting process. Assets under construction and proposed capital expenditure The table below includes projects expected to be approved and commence either the design or construction phase in i Asset Class J Unit Budget ' r _ 4,., _ rrigation ($000) 1,348 Natural ($000) 5,563 Purified Recycled Water ($000) 722 Recreation ($000) 885 Water Storage ($000) 13,961 Water Transport ($000) 17,067 Water Treatment Plant ($000) 67,047 Other nfrastructure ($000) 6,442 Management Efficiency Target and Unforeseen lmoacts ($000) (16,081) Total ($000) 96,954 Notes to the proposed capital expenditure: The proposed asset investment program is based on a sound planning process, together with information available and is therefore recommended as deliverable, comprehensive and efficient. The proposed asset investment program is less than that endorsed by the Queensland Competition Authority for in its draft report (Queensland Competition Authority Draft Report SEQ Bulk Water Price Path , November 2014). Some expenditure has been deferred to later years, providing time for refined planning and increased community engagement. An independent assessment of the 26 regulated dams has identified a program of works and planning work needed to ensure the dams continue to meet national standards into the future. Dam upgrades and planning work have been prioritised to design a staged work program that is scoped and scheduled to ensure security of water supply while delivering the best value for money. The Dam mprovement Program will drive significant capital investment during the next 1 O years. Planning work currently underway will resolve the quantum and timing of these investments. Based on Seqwater's proposed long-term asset operating strategy, there is an increasing reliance on using the capacity of all of the key water treatment plants as demand increases. The capacity of water treatment plants to supply peak demands and maintain water quality will be a key investment driver in the future, particularly under adverse raw water conditions. More detailed planning for Seqwater's transport assets is underway. Based on current information, investment in this asset class is likely to be driven by renewals rather than significant capacity increases. Doc no. F NAL Version date: 31 May 2015 Trim D: 01 5/ Doc owner: CEO Doc approver: The Boa rd Rev no. Page 20 of 20 The controlled version of this document is regis tered. All other versions are uncontro lled.

21 e water WATER FOR LFE [' Seqwater operational Plan ] Overall, ensuring a reliable and safe water supply with projected growth under a range of operating conditions will drive substantial future investments in treatment, transport and catchments. The drivers will continue to be compliance and renewals with potential increases in efficiency investments. Planning priorities to ensure an efficient future investment profile across these assets include: Better understanding of asset capability, operational flexibility and least cost options to meet demands under variable conditions. Better understanding of the council owned water business expectations and continuity of supply requirements. Prioritising and optimising the investments across the asset categories. Better understanding the organisation and community risk tolerance. Proposed borrowings for , Proposed Borrowing Program ($0005) QTC Borrowing {Capitalised nterest) 115,793 Repay/Redraw, Working Capital/Short Term Funding Facilities 1 20,000 Total Borrowing 135,793 1 ncreases limit from $180M to $200M. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 21 of 21 The controllecl version of this clocurnent is registered. All other versions are uncontrolled.

22 Sponsorship, advertising, corporate entertainment, donations and other activities Table 3: Sponsorship, advertising, corporate entertainment, donations - expenditure items over $5,000 and below $5,000. details of individual Sponsorship Healthy Waterways Awards WaterAid Australia events Total over $5, Activity Description. d benefit budget ($) estimate budget ($) _ act~ ($) a. b. 34,000 34,000 6,000 2,500 40,000 36,500 Other (total) below $5,000 TOTAL 7,560 40,000 40,000 44,060 40,000* * sponsorships still under consideration. Advertising Public information campaigns (e.g. Play it safe) Dam release notification service public information campaign Weir safety public information campaign Total over $5,000 c. d. e. 770, , ,000 32,000 32,000 10,000 5,000 5,450 5, , , ,000 Other (total) below $5,000 TOTAL 5,000 5,000 15, , , ,000 Corporate entertainment Total over $5,000 Other (total) below $5,000 10,000 10,000 10, TOTAL 10,000 10,000 10,000 Donations Total over $5,000 Other (total) below $5,000 5, TOTAL 5, Description benefit notes a. Seqwater sponsored three categories of the Healthy Waterways Awards to support individuals, volunteers and researchers who contribute to improving SEQ catchments and waterways was the final year of a three-year awards sponsorship. b. As part of its corporate social responsibility program, Seqwater supports WaterAid Australia through an annual membership and sponsorship of events to raise funds to improve poor people's access to safe water, hygiene and sanitation. Seqwater staff also contributed to WaterAid through payroll and support of activities. Doc no. FNAL Version date: 31 May Trim D: 01 5/80187 Doc owner: CEO Doc approver: Tile Board Rev no. Page 22 of 22 The controlled version of this document is regislered. All olher versions are unconlrolled.

23 JSeqwater Operational Plan i & se~water- L _ -~ '11 WATER r-gr LF E c. The Play it safe public information campaign promotes visitor safety at Seqwater dams and recreation assets. Seqwater research showed many people do not have the same level of awareness about safety around lakes as they do in pools or at the beach. More than a third of all drowning deaths (35%) in Australia are on inland waterways -rivers, creeks and dams; that is more than beaches and pools combined (31%). More than 100 people drowned in Queensland last year. The public information campaign includes television, radio, online and outdoor advertising to remind the more than two and a half million people who visit Seqwater's lakes, dams and parks each year to plan ahead and follow safety rules. d. The dam release notification service public information campaign encourages the community to register for Seqwater's dam release notification service ahead of the annual wet season. There is an ongoing investment program into this campaign with funding increased in year to communicate changes to the manuals for operational procedures for flood mitigation for North Pine, Wivenhoe and Somerset dams. e. The weir safety public information campaign urges the public, especially young people, to be aware of the potentially fatal consequences of swimming in weirs and flooded waterways. Definitions Sponsorship - The association of Seqwater's name with a sponsored organisation's service, product or activity, in return for negotiated and specific benefits. Corporate entertainment - Seqwater hospitality offered to corporate customers, key stakeholders and interest groups. Advertising - Messages paid for by Seqwater intended to educate or inform the people who receive them. Donations - A voluntary transfer of money or property by Seqwater for which the organisation receives no material benefit or advantage. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: Tile Board Rev no. Page 23 of 23 Tile controlled version of tllis document is registered. All otller versions are uncontrolled.

24 'Seqwater Operational Plan Part 4: Other undertakings As part of its performance agreement with its Responsible Ministers, Seqwater provides the following additional undertakings. Prudent financial information The CEO, subject to the direction of the Board, takes full responsibility to ensure that prudent financial practices will be applied both within Seqwater and within its subsidiary. Capital structure Seqwater will prudently manage within the capital structure parameters approved by the government. Weighted Average Cost of Capital (WACC) Seqwater adopts the price path set by the government for charging distributor retailers. The price path is determined by the Responsible Minister, following recommendations from the Queensland Competition Authority. However, Seqwater will also set a WACC for use as a discount rate in project assessment, and to enable a Maximum Allowable Revenue (MAR) cap to be calculated for comparative purposes, and to allow a reconciliation of the price path revenues to the MAR. The price path calculation (pending final determination by the Responsible Minister) will be based on the Queensland Treasury Corporation Cost of Debt. Seqwater also uses WACC calculations for fair value (using the income based approach) and for annual impairment testing. The WACC calculations are provided by an independent expert. Further details on the breakdown of the WACC assumptions can be provided upon request. Annual return policy Pursuant to section 53 of the South East Queensland Water (Restructuring) Act 2007, Seqwater is required to pay the State an annual return as determined by the Responsible Ministers within six months of the end of each financial year. To determine the amount to be paid, between 1 May and 15 May Seqwater must give the Responsible Ministers an estimate of their net profit for the year, and a recommendation on the amount of annual return to be paid. By the end of the financial year, the Responsible Ministers must either accept the recommendation, or direct Seqwater to pay another amount (though not more than the estimate of net profit). Corporate governance Seqwater will continually monitor and review its corporate governance arrangements to reflect good practice, having regard to the Government Owned Corporations guidelines as directed by the Responsible Ministers. n conjunction with the Responsible Ministers' departments, Seqwater will continue to review its existing governance arrangements to cut red tape, and to deliver improved effectiveness and efficiency. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/BO ls? Doc owner: CEO Doc approver: The Board Rev no. Page 24 of 24 The controlled version of this document is registered. All other versions are uncontrolled.

25 Compliance with Government policies Seqwater and its subsidiaries will comply with all relevant government policies and guidelines. n particular, Seqwater and its subsidiaries will comply with the approval, notification, reporting and other requirements of those policies and guidelines. Risk management Seqwater will implement and maintain an Enterprise Risk Management System based on the Australian/New Zealand Standard AS/NZS SO 31000: Risk Management Principles and Guidelines. The Enterprise Risk Management System comprises a Risk Management Policy statement, Risk Management Framework, and Risk Management Procedure. The system outlines a process for the identification, analysis, evaluation, treatment and monitoring of risks, with the intention of providing stakeholders with a high level of confidence that Seqwater has a reliable basis for decision-making that improves loss prevention and maximises relevant business opportunities. Bulk water pricing Seqwater will work closely with the Queensland Government to implement the Determination on bulk water pricing once it is made by the Responsible Ministers in response to the Queensland Competition Authority's Final report: South East Queensland bulk water prices Seqwater will continue to support Government in understanding future bulk water prices and price impacts on customers. rrigation pricing Seqwater has commenced preparations for the irrigation price review in consultation with DEWS and Queensland Treasury. Seqwater will continue to advance its plans, liaising with Government, peak industry bodies and customers. Network service plans Seqwater will continue to prepare and publish network service plans for each of its irrigation water supply schemes and to consult biannually with customers. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 25 of 25 The controlled version of this document is registered. All other versions are uncontrolled.

26 Attachment 1: Strategic Plan Our vision Heafthy communities. Prosperous region. Our purpose Partnering to deriver safe. secure and cost-effective water and catchment services to our customers and communities. Partnering -working collaboratively with customers. communities. governments and industry. Safe. SECUra and cost effuctive -continuing to ensure water security. meeting regulated standards and minimising costs for businesses and cooununities. Wai.er services - effectively managing our catchments and infrastructure to source. store and supply water that is fit for purpose. Catchment services - providing water source improvement. flood mitigation. recreation and land management services. Our values We wc,rk safe We w1:,rjc together We c:011ti11ually improve We deliver We r,a,;h make a cliffereoce. Our role in the water sector We are part of South East Queensland's regional water supply network, which includes council-owned water entities, local governments and private sector agencies. Our role is to sourt:e, store and supply treated water from catchments and alternative sources, ensuring a high quality and reliable water supply for our customers. We work v.~th our inclustry partners to achieve the be1st whole-ofsystem solutions and provide industry leadership in our region. The Queensland Government has set perfonnance standards for our business through a Statement of Obligations. This provides a comprehensive framework for performance. requiring us to: Focus on core business (safe. secure. resilient and reriable water supplies) Be an effective and efficient business Communicate, consult and collaborate Achieve long-term business sustainability Be innovative Support government objectives and directions. Our contribution to regional prosperity Water is funllamental to regional prosperity. By providing safe. secure and cost-effective water and catchment services, we fuel the econwny and enhance the lives and livelihoods of the people living and wor'ring in the region. We work with our customers. communities. governments and industry to understand their needs and to assist us in meeting those needs. The affordability of water is a key issue for our customers. We continue to reduce our costs by: Maximising the productivity of our existing water supply infrastructure Taking a whole-of-water-cycle approach Wor'ring with our industry partners to meet customer needs in the most cost-effective way. We support the ongoing growth and prosperity of our region by planning for the future. We develop long-tenn water supply plans that seek to meet community expectations and needs in the most efficient way possible. Critical issues for reg ional water supply The issues most criticil to our lonq-term business performance include: Affordable water for our customers Attraction and retention of a skilleif and committed workforce A customer focused workforce that understands and meets customer expectations Planning and operating water supply assets in a variable climate and during extreme weather events Collaborative whole-of-water-cycle management Partnering to improve catchment health nfluencing the long-term regional planning agenda Seqwater in 2020 Our CtJstomers are at the heart of everyd!ing we do. We are trusted and re:;pectecl b~ customers. communities. government and industry. Our skilled aml cormlitted workforce is driving improvement Seqwater is recognised as a high performing business and a great place to work. We are continuing to work proactively with our partners to deliver safe, secure and more cost-effective watbr and catchment services. and we have shaped our long-term water future. We are an industry leader in water source management storage. treatment and supply. Water is valued-customers understand and value the water we provide and we understand our customers' expectations and are de1livering the services they require. We are at the table as a trusted advisor to inform regional planning and regulatory decisions. Our smart competitive bbiness is contnbuting to a healthier. more prosperous South East Queensland. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 26 of 26 The controlled vers ion of this document is registered. All other versions are uncontrolled

27 Strategic Plan ~~ <...) a: ::, < Q Skilled ad anmitcd wortfon:e Our v.crliorte is motivaied. empow111ecl and agile. drivirg changa and dalivoring far our customers and communities. laawledgeallle Wa engage with our customel3 and COflflltntiBS providing opponuiities to unda!stand wl131 we do ajx! sooking feedback to irr1jrtml our sosvicas. Tmn:d ad l'ft1k1lld psrmwr We work collaboratively wi1h partners 1D ilnpra 1oa perfonnanca and explore new oppununities across 1ho region. m CSll:iam:mlsenicc We lake G\'Q)' O))pOl1lJnity to op1irnise the ~ \W d;fiver water and catdunant services 111 beoolit aistomm and C uni1ias. Samimsble imacial pedanmace Staoholdeis have confidante in the llfficiooc:y :ind long-1eml SUS!ain.ibili1y of our businass. Cll... E a: 0 a: ~ A :ale worqilace Continuously improve our salaly mana!lllment syslilm Om-a ~\aldurca behavialrs th3t support a S1rong salilty cullll:re fos!sr womoroe health and v,ellbeing. 01-galliatioal lmmewvdt lmplemant ~w cp;ratitlns and m:iintooa= de6\'ul'f moc!als Enhance perloonance managamenl Positive 11tg1111isatiolllll atllme Attr.ict and ratlin the right people Build an effectr.-a la:idership team S.rengti)an skills in laadarship. empuwennant and accountability lrmlst in tha skills and cap;ibility of JlJ" people to build an.igi)e. pro3etiw. GJ'lgaged and custoroer lccusad Mllldo:te O.Mllop 3 baserni for Oii" organisational cultura Recognise and reward parforrnan:a. Alm information Bbled lmsiaess lmplomiant C!ir.clagy solutions to make O\J" worlcforce mere effi:i211 and rnsponsjw Enhance our information.!dois and inxussas to SUJ1lX)!t docisicn-m:wng l.gwrage gecgraphic informi!lian S)'Stem caj)3bifrty to suppat cur ficild workforce. &gagi11g cm1dmeismut cammuities Proattiwly engage and lismn D customers and respond ta tbair needs Strengthen community partmrships mplement our customer engagement frame-.wnc and d;velcp a lang-tlllm customer &ngaglllllentplan Engage with custnm91s about selvice kr.o;il expectatians and lcnger tlllt1l w.itw supply plans Exploru oppcxtunities D engag;iwizh cust1l111ers and toltlll1lllitias through tracfitional and digital communicatiln channgls Ocr,;ilop a CUSDlller saivice banchmatk so we can measure our performance. Slrppcctiog amdoor reaee1ioa l'ro ide a range of recreation opporrunitias at our water supply lalals.. lalpnrri11g access D iafonnri lnctease ajstolner aa:ess to information about!hair water, and water and catchment sarvi=- Ad~11 a=amity priorities Wari with custornals and partness to in!ormnd custo1ner expectations and develop dam.ind management stralllgias Coordinats iniegr:itad v.nale-of-w3lllr grid ellllll!lollcf and flood m:!113gq111dnl planning Develop an ildustry wide drought management apprc;ich. Oplimisiq indm1jy perlarmua, Orr.'13 South East Oueenserd"s water SQMCQ proviclass" parmarship 10 impmw whole of SJJJll!y m3113gement processes and efficib!x:'(. MuimisiJlg illlbiucc Shape and infuence cur extamal environment through smkaltolder So= engagement appropriato inl1uancn :it st!te and nati002l levals Contribuie to long-term local and state QC\'all1!11Bnt ragilnal planning through onhantlld relationships with SEO rouncils and govamm211t agl!llcies Partner 1D almlta!e for and imptaw catchment haalth and SOOltll \'131nr quality Col ~ta D daliver :;o-year water sec:unty program. Builmg Dll1 brud lncrnase cur understzncftng of customer. community, QO\'!llllment and industry noods and 9llllectations Continoo to implement brand stramgy Undertake Cl!getad public infurmatm t:llllpaigns. Acaaiq a,entioal ex:ellnce Provide a safa, secure and cost effocti\'il water Sl.'J>Ply that mee1s cus10mer and ccmmunity requiremenls Optimise the use al energy. chemicals and othar l'qso\cbs 111 redute cha cost of producing watar Understand!Uj)BCtnicns and acc;ptabla risk l~o;ils fur Yr.lW quality and reliabi~ty lrwast in raal-tima bast approprialll r;ctice mooiumg and con~ systems wa111r supply infrastructure and process OJ)21'3tions and pmiormance. E*Ki1lg Cllldl-=t 1enica f.ontinue D enhance mcreation opparnmities Understand haw catchment imjll(mllllent initiali\-es can oontn"bute to i;ai.roe water risk reduction Ad\'OCatll and SElClG inwstnkmt fer catl:t,men, imprc\'ament Build rtj!alionshil)s with landhald;rs m improve catchment health. Enelliag ill lood mili,ain Grow our expertise in dam m~t and flood mitigation Continue D SUJll)Olt a uilled Hood DXTTlOOS taain that uses in1emalional best prattica medals and processes, and opera:es our dams in accordance wiih Bood manuals. r..,..,,,.11 c:oimrn:ial paf,,..-ce Achiew efficientoparating costs Develop arganis:itional cammmcial ca~6ty and accountability Optimjsa cash flaw ~enl inclucfing rupormg Ensure etfactivg risk managem;mt precesses 81111Chmar1c operating and mainmn:ince cos1s agains.: other utilities. Oplilrtisiog asset petf- Driva 1ha mast \-alue out of our water SUJ)ply inifrastrucrure through leaclm;i edge asset management and strn111gic optimisation of asset use mprove asset managmnont pio,;esses and S)'St6mS Optimise asset lll!la'/131 and mainlqnance programs Ensure asset ill\oas1ments are ~ and effici;nt nvest in long-tarm asset plannilr;i OewlOJ) certified and integrated manaq11111ent systams Develop a suslalinable capital s11uc11j111.. Adii~ eco11omic rqalmid objedms l93d 1he way in driving value fur llls 1DmlllS 00\'OJ) sus:ainablo boll: V,'alar price path proposals Wort with agencies to achi;ivo 3 rggulatdry environrnant trot driv;s value for cusmrn=. en a: =-:: lost time iniujy frequency rate Significant injury frequency ratg Completion of incident im estigation outcomes to schedule \: Warilarce ~-ailabifity Wordcrce tljmo\'bf Co:nmtmity awarnness or UldelstJnding of high impact pmjectli. Ulll)!ompted brand.nvarnnsss Parm; engagement rating Planned savings and other iml)0\'9111bnts achim'ad from \'l:ltllr service pro\oiders' parulelshjp initiatives. fllmpftami with bu De water supply agre s WatEir supply :mnes compfiant vnth the AustraGan Drinking Watar Guidefinas Catchment risk ruductioo actions implemanmd Emergency prepl!ll!dness exmtises camplmsd Scheduled mainrananca tasks delivered an time. Operational expend"rtum against budgat Bonchmark mainmnanoo costs against 'N3tllr industry Variabla cost of water supplied from major wat!r!jeatrnsnt plants Capital expendilll:re against budget Capital efficiencies adlievad [against estimamd costs al apprm<ed Jlllliec!S Completion of enterprise risk mitigation actions Ccmpluticn of illalml i!udit actions to schedule. Doc no. Doc owner: FNAL CEO Version date: 31 May 2015 Trim D: 015/80187 Doc approver: The Board Rev no. Page 27 of 27 The controlled version of this document is registered. All other versions are uncontrolled.

28 ,- seqwater Operational Plan ~- Strategic Plan - Five year financial outlook The Seqwater five-year financial outlook is based upon the current bulk water price path for sales to South East Queensland council-owned water businesses. ncome statement Period Beginning Date Period Ending Date Ol-Jul Jun-16 $ Jul Jun-17 $000 Ol-Jul Jun-18 $000 Ol-Jul Jun-19 $000 Ol-Jun Jun-20 $000 :st~tement of Comprehensive ncome Operating revenue Water Services - Distribution Retail Revenue Water Services - Power Stations/ TRC Sales rrigation/ CSO Hydro revenue Grant revenue nterest income Other revenue Gain on disposal Total operating revenue 783,129 22,066 4, ,382 1,678 4, , ,503 22,618 4, ,382 1,458 4, , ,737 23,169 4, ,382 1, ,640 5,363 4, ,382 1,468 1,004 1,052,183 5,488 5, ,382 1,108 1, ,662 1,003,174 1,076,618 Operating expenses Employee Expenses Supplies and Services 76, ,261 80, ,332 83, ,275 84, ,682 87, ,546 Total operating expenses 237, , , , ,342 Earnings before interest, tax and depreciation (EBTDA) 590, , , , ,276 Depreciation and amortisation expenses 249, , , , ,814 Earnings before interest and tax (EBT) 341, , , , ,462 nterest expenses 534, , , , ,642 Net profit before tax (NPBT) (193,436) (104,177) (24,939) 37, ,820 Taxation (Expense) Benefit Net profit after tax (193,436) (104,177) (24,939) 37, ,820 Notes to income statement: Revenue: Water sales - distribution retail revenue is calculated using the Queensland Competition Authority final report SEQ Bulk Water Price Path for year and forward Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80'1 87 Doc owner: CEO Doc approver: The Board Rev no. Page 28 of 28 The controlled version of this document is registered. All other versions are uncontrolled.

29 'Seqwater Operational Plan years estimates. The prices have been recommended from QCA for the period to with a 2.5%p.a. increase from ; unless stated otherwise. Water sales - power stations Toowoomba Regional Council (TRC) sales include only the fixed charges for and TRC $5.0M. The TRC fixed charge to access Wivenhoe water has been escalated by CP each year. No variable revenue for Toowoomba has been included at this point. Please note the change in financial position in year , where the forecast changes from a repeated loss to a profit before tax. Taxation expense: No Taxation Expense has been forecast due to the uncertainty of the asset revaluation movement. Period Ending Date 30-Jun-16 $ Jun-17 $ Jun-18 $ Jun-19 $ Jun-20 $000 Cash flows from operating activities nflows: Receipts from water services Receipts from leases, rentals and other nterest received 803,909 6,472 1, ,765 6,108 1, ,151 3,065 1, ,912 3,095 1,468 1,048,748 3,125 1,108 Outflows: Payments for operating expenses nterest payment Net cash provided by operating activities (234,930) (535,913) 41,216 (238,905) (504,163) 125,264 (246,949) (495,452) 188,008 (242,058) (478,363) 260,054 (252,963) (461,979) 338,038 Cash flows from investing activities nflows: Proceeds from sale of plant and equipments Outflows: Payments for PPE and intangibles Net cash provided in investing activities (117,009) (117,009) (155,264) (155,264) (138,878) (138,878) (117,953) (117,953) (151,623) (151,623) Cash flows from financing activities nflows: QTC borrowings/ Capitalised nterest 115,793 Outflows: QTC Borrowing redemptions Net cash provided by financing activities Net increase in cash and cash equivalents 115,793 40,000 (30,000) {39,130) (39,130) 10,000 (162,101) (162,101) (20,000) (171,415) (171,415) 15,000 Cash and cash equivalents at the beginning of the financial---'------' ' '--=---=-::.,== 40,000 80,000 50,000 60,000 40,000 Cash and cash equivalents at the end of the financial year 80,000 50,000 60,000 40,000 55,000 Doc no. FNAL Version date: 31 Ma"y 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 29 of 29 The controlled version of this document is registered. All other versions are uncontrolled.

30 ---~ 'Seqwater Operational Plan Balance sheet J Period Beginning Date Ol-Jul Jul-16 Ol-Jul-17 Ol-Jul Jun-19 Period Ending Date 30-Jun Jun Jun Jun Jun-20 $000 $000 $000 $000 $000!Statement of Financial Position Current assets Cash and cash equivalents 80,000 50,000 60,000 40,000 55,000 Trade and other receivables 130, , , , ,364 nventories 6,863 6,863 6,863 6,863 6,863 Other current assets 3,811 3,811 3,811 3,811 3,811 Total current assets 221, , , , ,038 Non current assets Property, plant and equipment 10,533,450 10,450,803 10,353,571 10,234,077 10,147,037 ntangible assets 170, , , , ,169 Total non current assets 10,703,570 10,617,479 10,515,307 10,391,397 10,300,206 Total assets 10,924,766 10,819,070 10,737,770 10,605,178 10,541,244 Current liabilities Trade and other payables 32,566 33,684 28,417 33,037 33,417 Employee benefits 8,320 8,320 8,320 8,320 8,320 nterest bearing liabilities 34,387 42,132 40,549 38,909 37,572 Unearned revenue and other 11,382 11,382 11,382 11,382 11,382 Total current liabilities 86,655 95,518 88,668 91,648 90,691 Non current liabilities Employee benefits 11,327 12,327 13,327 13,327 13,327 nterest bearing liabilities 9,386,419 9,386,419 9,347,289 9,185,188 9,013,773 Deferred tax liabilities 51,961 51,961 51,961 51,961 51,961 Unearned revenue and other 327, , , , ,148 Total non current liabilities 9,777,383 9,767,001 9,717,489 9,544,006 9,361,209 Total Liabilities 9,864,038 9,862,519 9,806,157 9,635,654 9,451,900 Net assets 1,060, , , ,523 1,089,344 Equity Contributed equity (715,888) (715,888) (715,888) (715,888) (715,888) Asset revaluation surplus 2,016,316 2,016,316 2,016,316 2,016,316 2,016,316 Accumulated surplus/(deficit) (239,700) (343,876) (368,815) (330,904) (211,084) Total equity 1,060, , , ,523 1,089,344 Doc no. FNAL Version date: 3 1 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 30 of 30 The controlled version of this document is registered. All other versions are uncontrolled.

31 'Seqwater Operational Pfiill~ Attachment 2: Policies Recreation management framework Seqwater manages all of the major water storages in South East Queensland. These water storages provide the majority of sites in South East Queensland for recreation on or in freshwater. Collectively these water storages provide a 'recreational landscape' of regional significance, attracting more than 2.75 million visitors to the region in the 2014 calendar year. Consistent with the requirements of section 51 (d) (ii) of the South East Queensland Water Restructuring Act 2007, a Recreation Management Framework (the Framework) has been established to guide decision making. A key element of the implementation of the Framework is the development of site specific recreation management plans. Following extensive consultation with SEQ communities, Seqwater released recreation guides and associated management plans for 20 lakes as part of its Recreation Review. Seqwater's recreation assets play an important role in a growing and liveable region. Provision of recreation provides a unique opportunity for Seqwater to be customer connected. The Framework is available via the Seqwater website (seqwater.com.au) along with all site specific Recreation Management Plans and the rules governing the use of recreational assets. Treasury policy Seqwater has policies in place for minimising any risk of investments and borrowings that may adversely affect its financial stability. Consistent with the requirements of Section 51 (c) (V) of the South East Queensland Water (Restructuring) Act 2007, POL Treasury Policy has been implemented by Seqwater to ensure the prudent, orderly and efficient approach to the management of assets and liability associated with the financing of Seqwater's business. Open data Seqwater's Open Data Strategy complies with the Queensland Government Open Data Policy. Seqwater is committed to supporting the Queensland Government goals to: make data accessible and easy to find publish data in line with the Open Data Policy Principles inform its stakeholders and key service delivery areas of data for impending release ensure data is fit-for-purpose work with stakeholders to realise the benefits of open data. A copy of the Strategy is available on Seqwater's website (seqwater.com.au). nformation published pursuant to the Strategy will be available on the Seqwater website and the Queensland Government Open Data website (qld.gov.au/data). Remuneration arrangements Seqwater is governed by an independent Board of highly regarded professionals appointed by the Queensland Government. The Board has primary responsibility for strategic guidance and monitoring Seqwater operations. Doc no. FNAL Version date: 31 May 2015 Trim D: 015/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 31 of 31 The controlled version of this document is registered. All other versions are uncontrolled.

32 'Seqwater Operational Plan Seqwater's Board members are: Noel Faulkner (Chairman) Jenny Parker Leith Boully Michael Arnett Shane McGrath. The remuneration arrangements for Board members are in line with the remuneration arrangements as advised by the Responsible Ministers. Final remuneration amounts will be available at the end of June 2015 and included in Seqwater's Annual Report. ndustrial relations and employment plan Seqwater remains committed to having an open, consultative approach with employees, creating a safe working environment and consulting with staff on the implementation of workplace changes. Employment arrangements within Seqwater are based on the vision, purpose and values of the business, with a desired culture that supports strategy execution. Seqwater's primary employment and industrial relations goals for include: Planning, negotiation and certification of a replacement Seqwater Certified Agreement ( ). Development of a number of technical capability frameworks to define the technical skills that drive organisational success within different functions. The technical capability frameworks will be used to underpin recruitment and selection, learning and development, performance management and talent management decisions and activity at both the individual, functional, and organisational level. There is also the opportunity for targeted learning spend towards the most important technical capability gaps. mplementation of Talent Management Program which involves ensuring identified High Potentials receive targeted development that they need for readiness to fill critical roles when required. mplementation of performance indicators for all Enterprise Bargaining Agreement (EBA) covered staff through individual My Achievement Plans (MAPs). MAPs also include individual capability assessments against Seqwater's Core Capability Framework and an individual development plan for each employee within Seqwater. Design and implementation of an on-boarding program for employees who are new to a leadership role within Seqwater. The program will enable the understanding and capture of new leader needs in relation to on-boarding, the expectations held of new supervisors across various functions within the organisation and the development of tools and resources to assist hiring managers and new leaders to understand organisational requirements and expectations. Seqwater engages employees under two employment modes: An Seqwater contract of employment (where the wage rate is determined by a work evaluation and falls outside the EBA classification structure); and, Seqwater Certified Agreement Doc no. FNAL Version date: 31 May 2015 Trim D: 0 15/80187 Doc owner: CEO Doc approver: The Board Rev no. Page 32 of 32 The controlled version of this document is registered. All other versions are uncontrolled.

33 1 seqwater Operational Plan ~----- water WATER FOH LFE Seqwater is also committed to complying with the State Government's Public Sector Wages Policy and any other State Government employment ~- -. ~:_~:: ~ and industrial relations policies. f - ~ ~~ -=-=- ~-~~-~-~~ ~ ~~-~~=~~ Permanent FTE's - Employment category: Permanent full time 523 Permanent part time 24 Fixed-term full time 40 Fixed-term part time 0 Casuals 1 Total directly employed workforce: 588 Apprentices (Contractors) 3 Trainees (non-fte) 6 Graduates (non-fte) 11 TOTAL WORKFORCE: 608 Vacancies 32 1 workforce breakdown figures are as at 25 May Seqwater Certified Agreement productivity initiative Seqwater's innovative EBA has been structured to facilitate and identify business related savings across Seqwater. These savings are then used to fund the contingent wage increases available to staff. n the period, there are two contingent wage offers available to employees. Employees will be eligible to achieve the contingent increases upon successfully achieving the required savings as summarised in the table below. January June 2015 $496,605 July December 2016 $288,628 n the period since the Agreement's certification in September 2013, Seqwater employees have met each target to achieve the contingent wage increase available. At the time of certification a total of $2.2 million was expected to be saved through the life of the Agreement. This would ensure each contingent wage increase was made available for employees. The Agreement has laid a foundation for an efficiency focused workforce and employees have exceeded each savings target to date. Since July 2013, employees have identified and Seqwater has realised more than $4.6 million in savings. Doc no. FNAL Version date: 31 May 2015 Trim D: 0 15/ Doc owner: CEO Doc approver: The Board Rev no. Page 33 of 33 The controlled version of thi s document is registered. All other versions are uncontrolled.