Sydney's water supply at risk because of department failure on conservation, audit finds

NSW audit office blasts water conservation efforts and finds Sydney Water was two years too late in responding to recent drought

Warragamba Dam in February 2020
Warragamba Dam in February 2020. An audit report has found that the department and Sydney Water did not effectively investigate, implement or support water conservation efforts in Sydney. Photograph: Jenny Evans/Getty Images

The New South Wales government has failed to investigate or implement water conservation measures for greater Sydney, leaving the city’s water supply vulnerable to the effects of population growth, drought and climate change, the state’s auditor has found.

The report by the NSW audit office also found Sydney Water was two years too late in increasing funding for water conservation in response to the recent drought.

The audit examined whether the state’s Department of Planning, Industry and Environment and Sydney Water had properly planned and introduced water conservation measures since 2016.

“The Department and Sydney Water have not effectively investigated, implemented or supported water conservation initiatives in Greater Sydney,” the report states.

The auditor found neither agency had met key requirements of the Metropolitan Water Plan and that Sydney Water was also failing to meet the water conservation requirements of its operating licence.

The office said there had been little effort to find new water-saving initiatives or options for funding them.

“As a result, Greater Sydney’s water supply may be less resilient to population growth and climate variability, including drought,” the report states.

NSW Labor’s water spokesman, Clayton Barr, said the report showed the government “is currently doing absolutely nothing for water conservation”.

“Worse than that, they’ve taken money out of water conservation,” he said.

“The incompetence of not dealing with water conservation, water recycling, leaks in the pipes is our water storages will fall faster which means our water bills will be higher more often.”

The independent NSW MLC, Justin Field, said the findings were alarming.

“This is a scathing report that shows that since the Liberal/National Government was elected, it has failed on water conservation exposing Sydney residents to a greater risk of water shortages and higher prices,” he said.

“As the biggest city on the driest continent on the planet, we should be world leaders in water conservation, but under the Coalition we are failing.”

Publication of the audit comes just months after the state government eased water restrictions. Restrictions were raised to level two last year as drought pushed greater Sydney’s dam storage levels below 50%.

It also comes in the wake of a new pricing structure released by the Independent Pricing and Regulatory Tribunal that will reduce water prices from next month for Sydneysiders but bring sharp price increases the next time Sydney’s dam levels fall below 60%.

As well as finding governance around water conservation was weak, the auditor concluded:

  • The department had not undertaken any detailed analysis of water conservation options since 2013.

  • The department had no documented strategy for water saving for greater Sydney, despite this being a requirement of the Metropolitan Water Plan.

  • Funding for water conservation had been cut since 2012.

  • Sydney Water should have developed a water conservation program in September 2017. It did not do this.

  • Sydney Water’s lack of planning meant it was slow to respond to the drought.

  • Investment in water conservation measures should have been increased when dam levels began to drop in 2017. Instead, extra funding did not start until May 2019 when the drought was showing serious effects across the state.

  • The department has made no progress in removing regulatory barriers to water recycling and water harvesting.

The report makes several recommendations, including that the department develop clear policies on water efficiency, reuse and recycling, that Sydney Water develop a five-year plan for water conservation and that the government improve funding for water conservation, including through the state’s climate change fund.

A spokeswoman for the department said the report had identified what the department needed to do better and it would be implementing the recommendations.

She said before the report was finalised, the department recruited a chief executive with a track record in improving the efficiency of water systems.

“We are changing the way we work across the sector so we can ensure we deliver on the recommendations, including working with Sydney Water and Water NSW in the development of a new Greater Sydney Water Strategy,” she said.

She said the strategy would include a greater focus on water conservation and a range of measures to improve Sydney’s water security. The reduction in water use by consumers during the recent drought, combined with recent rainfall, meant the outlook for water supply was now more positive.

Sydney’s water storage is currently above 80%.

A spokesman for Sydney Water said the organisation acknowledged it needed to improve.

“We have already made very significant achievements in water conservation and will continue to work collaboratively with the Department of Planning, Industry and Environment on further water sector improvements including the development of the Greater Sydney Water Strategy,” he said.

“As an example, despite a 26% increase in population, we have seen the total consumption of drinking water decrease to its lowest since mandatory restrictions were introduced 17 years ago.”