Guernsey Water Annual Report 2016

Guernsey Water 2016 Annual Report PRESIDENT’S STATEMENT annualreport2016 03 PRESIDENT’S STATEMENT New Government 2016 was a year of fiscal challenge and political change as our new structure of government was implemented. This included formation of the States’ Trading Supervisory Board (STSB) to oversee the States' incorporated and non- incorporated trading entities. I was elected by the States as President of the STSB on 21 September and would like to pay tribute to my predecessor, the late Deputy Dave Jones. As one of our longest serving States members he was a passionate politician and I am grateful for the formative work he did with the STSB. New Board The STSB provides oversight of Guernsey Water which continued to perform well for both customers and the States throughout 2016. While Guernsey Water’s business plan was established prior to the formation of the STSB it has flexibility in important areas such as the development of financial strategy. Having this plan in place while the STSB formed provided Guernsey Water with clear direction and enabled it to continue moving forward. Returns In 2016 the States supported the Policy & Resources Committee’s budget proposition for Guernsey Water to refinance its Belle Greve sea outfalls replacement. This investment is already delivering benefit for customers and will now return £18.6m to capital reserves in 2017, helping the States meet its emerging fiscal challenges. We will be required to take on debt to fund this investment and work will continue in 2017 to determine the most appropriate funding mechanism for both Guernsey Water customers and the States. In addition the board also ratified a redistribution of £1.5m from Guernsey Water’s property reserve 1 to general revenue. This still leaves the business in a healthy cash position with just over £12m held at the end of 2016, which will be important for refinancing the Belle Greve sea outfalls. The board is confident that Guernsey Water can deliver planned efficiencies to enable it to fulfil these returns while delivering its business plan and constraining bill increases for customers. Strategy Development In 2016 we made significant progress with the development of our long term water and wastewater plans. Our water resource and drought management plan considers the islands water needs until 2040, takes account of our changing climate and provides the tools for dealing with severe drought. This work will establish a clear direction for short to medium-term investment in water resources. A new water treatment strategy will also provide our customers with a more resilient water supply, even better drinking water quality and significantly improve our operational efficiency. In addition, GuernseyWater’s surface water management policy was approved by the Committee for the Environment & Infrastructure. This policy will ensure adaptation of the island’s drainage over the long term, with investment keeping pace with climate change and ensuring resilience to changing weather patterns. A strategy for the delivery of this investment will be developed in 2017. 1 Comprised of funds from property sales and rental. A new water treatment strategy will provide our customers with a more resilient water supply, even better drinking water quality and significantly improve our operational efficiency. Charles Parkinson