Goulburn-Murray Water (G-MW) has begun modernising its business operations through a series of initiatives outlined in its recently approved 2010/11 Corporate Plan.
G-MW Chairman Stephen Mills said the modernisation program would impact right across G-MW's current business operations.
"To date modernisation has tended to refer to the works NVIRP is delivering on our channel network. These works are the first step and pave the way for a much wider program of modernisation that will redefine future prices, service delivery and customer communication and engagement," said Mr Mills.
Over the next twelve months G-MW will make a number of critical decisions in consultation with customers and stakeholders as it transitions the business to new roles and functions by 2018.
"Our customers' businesses are changing rapidly and we need to ensure G-MW is able and ready to service increasingly diverse needs into the future. Some of these changes we may implement from next year, others will take longer or cannot commence until NVIRP is complete," said Mr Mills.
With improved seasonal conditions, Mr Mills believes it's the right time for G-MW to open the discussion on a range of service, price and customer engagement processes.
"We must ensure we capture the new thinking and lessons of the past decade of drought to ensure our business is even more customer service focused, responsive and cost competitive in the future," said Mr Mills.
G-MW's future directions are based on six key drivers:
1. By 2018 every G-MW channel delivery customer will be connected to a common user system (the backbone) by a connection which is owned by one or more landowners and managed by them.
2. NVIRP's modernised backbone will deliver the same standard of service to every customer. Many existing service challenges such as the variations in flows between the top and bottom of the system and across channels of different sizes will be eliminated.
3. The modernised backbone will be less than half G-MW's current 6,500 km channel network. This will directly impact on the scale of G-MW's operations and economies of scale in delivering services as well as capital and maintenance works programs.
4. The anticipated Murray Darling Basin Plan will see less water for agriculture, reinforcing the need for an efficient and well managed delivery network that maximises the available resources.
5. G-MW's customer base will continue to change in response to commodity prices and rapidly evolving on farm technology. At the same time water buybacks and the Basin Plan will see the environment become G-MW's single largest customer.
6. Improvements to carryover, system reserve policies and the continuing growth in water trading opportunities mean G-MW's customers have more options to own, use and trade their water than ever before. G-MW expects these will see less predictable and uniform patterns of water delivery and increased demands for timely information and efficient processing of water transactions.
Mr Mills said other factors including the progressive removal of the current 4 percent limit on the volume of water shares able to transferred out of Irrigation Areas, and the expected review of termination fees in 2012 would, depending on the outcomes, also impact on the foundations of many of G-MW current prices and services.
"The NVIRP program has and will define the future footprint for the irrigation network and this is already demonstrated in its channel works, connections programs and other initiatives including exemptions on water trade from some areas. Our challenge is to leverage the NVIRP investment to maximise business efficiency, contain future costs for irrigators and customers and ensure the ongoing contribution of irrigated agriculture to our region's economic prosperity," said Mr Mills.
"And until 2018 we will need to run two systems - the manual non-backbone and the automated backbone - so we need keep these costs to a minimum and progressively realise as many cost savings as possible," said Mr Mills.
Mr Mills said G-MW's business modernisation program would focus on the Irrigation Areas first because they represented on average 80 percent of customer water use across G-MW entire service region.
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