Manukau Water reduces some prices; holds others

MEDIA RELEASE

Manukau Water reduces some prices; holds others

Manukau City (10 May 2009) – Manukau Water Limited has announced it will pass onto its customers the benefits of a better-than-expected financial position after its third quarter result.

The company - which provides water and wastewater services to the people of Manukau – will reduce fixed wastewater charges for business and community group customers from 1 July 2009, and will leave unchanged its wastewater prices for residential customers. It will also hold its water price for all customers at the current level.

Manukau Water Limited chief executive Raveen Jaduram said the company is benefitting from its programme of cost reduction and rigorous management of cashflow, and wants to pass that benefit on to its customers.

“At a time when there are many other pressures on the finances of our customers, we believe this is a real benefit we can provide,” Mr Jaduram said.

The price changes mean that for around 5,000 business customers in Manukau, fixed wastewater charge will drop 20 per cent, to $482 from $600 currently. This reduction is in part due to the company reducing a subsidy that business customers effectively paid to residential customers. The fixed wastewater charge for these business customers was $1040 in 2007/08, so will more than halved over two years. For community facilities the fixed wastewater charge will drop 13 per cent to $378. The company is on target to getting the non-residential fixed annual wastewater charges to $215 by 2011/2012.

Manukau Water Limited’s water price for all customers remains at $1.28 per 1,000 litres (1 m3) of water – which is the lowest in the Auckland region.

Mr Jaduram noted Manukau Water Limited has been able to hold these prices despite significant pressure on external costs.

“Fortunately, due to the progress we have made in containing our controllable costs we are able to absorb such increases while maintaining the quality of our water and wastewater services,” Mr Jaduram said.

The price changes have been announced as Manukau Water Limited recorded a $1.5 million improvement in its pre-tax earnings for the nine months ended 31 March, 2009. The company’s pre-tax loss of $635,000 narrowed from a loss of $2.16 million a year earlier and was $1.7 million better than forecast.

Mr Jaduram said it is particularly pleasing to improve on the financial result, even though Manukau Water Limited customers are using less water. Water sales for the latest nine months were 2.9 per cent down on budget and 4 per cent below demand a year earlier.

“We believe this is due in part to the economic downturn, but also due to greater awareness about the value of water and the transparency of our pricing,” Mr Jaduram said.

Mr Jaduram noted Manukau Water Limited has performed well since it was formed as a Council Controlled Organisation. It has a strong balance sheet and funds to operate its business. Its performance is detailed in financial reports on its website (www.manukauwater.co.nz) The company’s prices (GST inclusive) for its financial year beginning July 1 2009 are:

Manukau Water Limited does not operate for the purpose of making a profit, but it is required to recover its costs from customers

ENDS

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