MEDIA RELEASE

Manukau Water Price Still Lowest In Auckland

Cost Efficiencies Minimise Impact of Bulk Rises

Manukau City (12 June, 2008) - A focus on reducing costs while enhancing customer service has enabled Manukau Water Limited to keep its water prices the lowest in the Auckland region, despite continued pressure from bulk supply costs.

The company has also contained its wastewater price for residential customers to around $1 a day, despite the rising wholesale prices and the progressive removal of an effective subsidy by business customers of homeowners.

Manukau Water Limited chief executive Raveen Jaduram said it is pleasing that the benefits of cost efficiencies within the company can be passed on to customers.

"It is extremely gratifying that we have been able to minimise any increases by becoming a more efficient business," Mr Jaduram said.

"Since we became a Council Controlled Organisation less than two years ago we have reduced our costs substantially, and that means we are now able to absorb in part the significant price pressure we are seeing in wholesale water and wastewater costs," he said.

From July 1, when its new prices will take effect, Manukau Water Limited will itself face a 14% rise in wholesale water costs, and a similar rise in wholesale wastewater costs. The wholesale supply costs account for well over half of Manukau Water Limited's total costs.

"While we cannot control the wholesale prices, we are continuing to work with our bulk supplier to see if there are areas where we can reduce future demand and therefore minimise future overheads," Mr Jaduram said. "In this respect we want encourage our customers to continue to conserve water so that future large-scale investments can be delayed or even eliminated."

Manukau Water Limited's main incentive for customers to conserve water is its variable water price. This means that the less water customers use, the less they pay. The company's water price will be 1.28 cents per cubic metre from July 1, which is the lowest water price in the Auckland region.

The average household in Manukau City uses less than 4 cubic metres (4,000 litres) a week of water, so most residential customers will pay less than $5 a week in the coming financial year for the treatment and piping of clean water to their home.

From July 1, a previous minimum water charge of $12.50 per quarter for residential customers will be eliminated - meaning every residential customer now has a financial incentive to conserve water.

Also from July 1, the annual wastewater charge for household customers in Manukau will be $399 a year. That is less than $8 a week for the removal and cleaning of water from sinks, showers, bathtubs, toilets, dishwashers, washing machines and similar appliances around the house. Wastewater charges are higher than water costs because larger pipes are needed to transport wastewater, it requires more pumping, and wastewater treatment is more complex than water treatment.

For commercial customers the fixed annual charge will be $600. Commercial customers also pay a variable charge for wastewater, based on $2.68 for each cubic meter of water used.

Manukau Water Limited's main price schedule for the financial year beginning July 1, 2008 is:

Service / Fixed annual charge / Volumetric charge per m3
Water supply / 0 / $1.28
Wastewater (sewage) / /
Residential (domestic) / $399 / 0
Residential Wastewater-Beachlands/Maraetai / $438 / 0
Non-residential (Commercial) / $600 / $2.68
Non-residential (Community facilities) / $378 / $1.68
Customers who have pay full trade waste charges to Watercare Services Ltd / $600 / $1.25

Manukau Water Limited is owned by the Manukau City Council, which operates a rates rebate programme for some ratepayers. Payments to Manukau Water Limited are eligible for the rebate programme and customers are encouraged to check their entitlement with the Council.

A full list of the company's prices will be posted on the company's website (www.manukauwater.co.nz) as will Manukau Water Limited's latest Customer Contract, which includes its Terms and Conditions.

ENDS

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