Capital expenditure is the key cost driver for water and sewerage service providers. For example, economic modelling of the water business in Mackay shows that 80% to 90% of the cost of the provision of water supply services to the community is driven by the cost of the capital installed to deliver the services.

Similar findings have been raised in QWRAP investigations across the state. Effective utilisation of assets is a key strategy in driving down the cost of providing services into the future.

Uncertainty surrounding future water use often introduces risk in asset decision making resulting in conservative decisions surrounding the construction of trunk water infrastructure. By improving the understanding of current and future water demand, it is predicted that the following changes can be made to the management of Water Infrastructure:

• reduced operational and capital costs through optimised decision making
• reduced capital costs through a reduction in conservatism in design
• reduced emergency construction of additional trunk water infrastructure through improved forward planning of trunk infrastructure

The major contributing factor leading to the uncertainty surrounding future water use is variation in water demand from the community. This variability creates uncertainty in the following three areas:

• operational decisions associated with running the bulk water supply treatment and distribution assets
• short run decisions to manage infrastructure capacity such as water restrictions and temporary supplies
• addressing long run infrastructure decisions through the construction of new capital or accessing new water sources

This modelling was initiated for the Nebo Rd Water Treatment Plant in Mackay and expanded across the following water supply areas in Queensland.

• Cairns Regional Council
• Fraser Coast Regional Council
• Longreach Regional Council
• Rockhampton Regional Council
• Toowoomba Regional Council
• Townsville Regional Council

This report investigates the application of the Model built to predict water use in Mackay across other water utilities in Queensland and the potential implications of the Model in understanding variability in water use across water supply schemes.

Read the report here.