Guernsey Water Annual Report 2016

Guernsey Water 2016 Annual Report GENERAL MANAGER’S STATEMENT annualreport2016 05 will improve water quality, resilience and the efficiency of our water treatment works, but requires us to reduce the remaining useful life of Longue Hougue from eight to three years. This has added to depreciation costs and will continue to do so for the next two years. Our strong financial performance in recent years has also enabled us to make a one-off return to the States of £1.5m from our property reserve. This reserve was created from property sales and rental. In addition, the grant previously received for our Belle Greve outfalls has been converted into a short term loan which will be repaid in 2017. Looking ahead to next year, the cash we hold with Treasury will be added to a proportion of longer term debt and used to fund the Belle Greve sea outfalls. This will limit interest receipts and incur a cost of capital. Together with the increase in depreciation, this change to our capital structure may result in a short term deficit over the next two years before we return to surplus in 2019. Investment in Services We invested £4.8m in improving and maintaining the infrastructure we use to serve our customers. We have made good progress with the implementation of our water treatment strategy. We also continued to rehabilitate our sewers, cesspit emptying points, wastewater pumping stations and for customers at greatest risk, we have helped protect their property from sewer flooding. Operational Performance Our reorganisation and the development of strategic plans did not detract from our provision of valued day-to-day services for our customers. During 2016 we improved the safety of our drinking water as compliance increased to 99.91%, equalling our second best ever annual performance. Taste complaints also fell by 73% making our water even better to drink. Although leakage increased slightly, it remains exceptionally low when compared to the rest of the UK and again this year we responded promptly to mains bursts, minimising the impact on our customers. £4.8m IN IMPROVINGAND MAINTAINING THE INFRASTRUCTURE WE USE TO SERVE OUR CUSTOMERS £1.5m RETURNED TO THE STATES FROM OUR PROPERTY RESERVE