veolia bingara licence plan audit 2015 v5 · water futures. abn 97109956961. 66 merrivale rd,...

Water Futures. ABN 97109956961. 66 Merrivale Rd, Pymble 2073. 0409 283 737. [email protected]

t-cAM Consulting. ABN 76559967228. 15 Kim Marie Mew, Moriac 3240. 0412 540 187. [email protected]

Report on the Follow-‐up Licence Plan Audit of the Bingara Gorge Recycled Water Scheme

Independent Pricing and Regulatory Tribunal Water Industry Competition Act 2006

Network Operator's Licence Audit Report (Follow-‐up Licence Plan Audit)

Licence No. 10_012: Bingara Gorge Water Recycled Scheme, NSW

Veolia Water Solutions and Technologies (Australia) Pty Ltd (ACN 055254003)

Final Report 12th July 2015

Report on Follow-‐up Licence Plan Audit of Network Operator’s Licence No. 10_012 (Bingara Gorge) under WICA. of 20 Document Version 5. Water Futures and iq-‐AM. Last updated: 15-‐July-‐2015. Doc Controller: DD.

Table of Contents 1. EXECUTIVE SUMMARY ............................................................................................................................... 3 2. INTRODUCTION ........................................................................................................................................... 4 2.1 OBJECTIVE ........................................................................................................................................................................ 4 2.2 LICENSEE’S INFRASTRUCTURE, SYSTEMS AND PROCEDURES .................................................................................. 4 2.3 AUDIT METHOD ............................................................................................................................................................... 4 Audit scope ................................................................................................................................................................................. 4 Audit standard ......................................................................................................................................................................... 4 Audit steps .................................................................................................................................................................................. 4 Audit team .................................................................................................................................................................................. 5 Acknowledgements ................................................................................................................................................................ 5 Audit grades .............................................................................................................................................................................. 5

2.4 REGULATORY REGIME .................................................................................................................................................... 5 2.5 QUALITY ASSURANCE PROCESS .................................................................................................................................... 5 2.6 AUDIT FINDINGS ............................................................................................................................................................. 6 2.7 SITE AUDIT AGENDA FOR THURSDAY 11TH JUNE 2015 ........................................................................................... 6

3. INFRASTRUCTURE OPERATING PLAN – OUTSTANDING ISSUES ................................................ 11 3.1 SUMMARY OF FINDINGS .............................................................................................................................................. 11 3.2 REVIEW OF ACTIONS ................................................................................................................................................... 11 3.3 OPPORTUNITIES FOR IMPROVEMENT ...................................................................................................................... 11

4. WATER QUALITY PLAN (NON-‐POTABLE WATER) (WQP (NPW)) – OUTSTANDING ISSUES 12 4.1 SUMMARY OF FINDINGS .............................................................................................................................................. 12 4.2 REVIEW OF ACTIONS ................................................................................................................................................... 12 4.3 OPPORTUNITIES FOR IMPROVEMENT ...................................................................................................................... 12

5. SEWAGE MANAGEMENT PLAN (SMP) – OUTSTANDING ISSUES ................................................. 13 5.1 SUMMARY OF FINDINGS .............................................................................................................................................. 13 5.2 REVIEW OF ACTIONS ................................................................................................................................................... 13 5.3 OPPORTUNITIES FOR IMPROVEMENT ...................................................................................................................... 13

APPENDICES


1. Executive Summary

This report sets out the findings of a Follow-‐up Licence Plan Audit completed in respect of the Network Operator’s Licence (Licence No. 10_012) for the Bingara Gorge Recycled Water Scheme, NSW. An Operational Audit, which is reported separately, was undertaken in conjunction with this audit.

The auditors were provided with sufficient and appropriate evidence, as described in the IPART Audit Guideline for Greenfield Schemes, Water Industry Competition Act 2006 (NSW), July 2013 (the Audit Guideline), on which to base the conclusions reached during the audit. The auditors have observed the requirements of the Audit Guideline and the Audit Deed in conducting the audit, determining audit findings and preparing the report.

The reported audit findings accurately reflect the professional opinion of the auditors. The findings have not been unduly influenced either by the Licensee or any of its associates and express the auditors’ opinions as to whether the Licensee has met the regulatory requirements as specified in the scope. A summary of the audit findings is given in the following chapters and a detailed breakdown of the full audit findings against the audited criteria is given in the detailed Audit Tables in Appendices A (Infrastructure Operating Plan), B (Water Quality Plan (non potable water)) and C (Sewage Management Plan).

The audited infrastructure substantially complied with the audited requirements of the Regulation and Licence conditions and was found to be operating safely. The Licensee, Veolia Water Solutions and Technologies (Australia) Pty Ltd (ACN 055254003) (Veolia) was found to be constructing, repairing, maintaining and operating the infrastructure without there being significant non-‐compliances with any of the audited criteria. Three insignificant non-‐compliances noted were as follows:

WIC Reg Sch 1cl.6(1) and 13(1) – non-‐compliant insignificant:

Within the Infrastructure Operating Plan, although Veolia has yet to have all network assets covered in its systematic asset management system, the most critical network assets are included and work is continuing to include additional network assets. Therefore, although this finding is a non-‐compliance, it is considered insignificant provided work to address the shortfalls continues.

WIC Reg Sched 1 cl.7(1)(b) – non-‐compliant insignificant:

Within the Water Quality Plan (non potable water) there is no explicit identification of 'uncertainty' or ‘residual risk’ in the risk assessment and the risk assessment does not consider risks for each process step. However, since the current treatment process will soon be upgraded to a new one, and since a more comprehensive risk assessment has been completed for the new process, this non-‐compliance has been rated as insignificant.

WIC Reg Sched 1 cl. 14(1)(a) & (b) – non-‐compliant insignificant:

Within the Sewage Management Plan there is no explicit identification of 'uncertainty' or ‘residual risk’ in the risk assessment and the risk assessment does not consider risks for each process step. However, since the current treatment process will soon be upgraded to a new one, and since a more comprehensive risk assessment has been completed for the new process, this non-‐compliance has been rated as insignificant.

Given the insignificant nature of the non-‐compliances and the progress that is being made to address them, the Infrastructure Operating Plan, Water Quality Plan (non potable water) and Sewage Management Plan were found to be adequate.


2. Introduction

2.1 Objective This report presents the findings of an audit undertaken for the Independent Pricing and Regulatory Tribunal (IPART) under the Water Industry Competition Act 2006.

The audit comprised of a Follow-‐up Licence Plan Audit, as required in respect of the Network Operator's Licence (Licence No. 10_012) for the Bingara Gorge Recycled Water Scheme, NSW. The Licensee is Veolia Water Solutions and Technologies (Australia) Pty Ltd (ACN 055 254 003) (Veolia).

An Operational Audit was undertaken in conjunction with this audit and is reported separately.

2.2 Licensee’s infrastructure, systems and procedures The Licensee’s infrastructure, systems and procedures audited were those related to the Bingara Gorge Recycled Water Scheme, Wilton (myrecycledwater.com.au/wilton-‐rwtp).

2.3 Audit method

Audit scope

This audit covers the operation and maintenance of the licenced infrastructure and addresses the scope specified by IPART in its letter to Jed Lindley dated 4 February 2015 relating to a Follow-‐up Licence Plan Audit.

Audit standard

The audit broadly followed the generic principles of auditing given in ISO 19011:2011 -‐ Guidelines for auditing management systems. The principal document used to guide the audit was the IPART Audit Guideline for Greenfield Schemes, Water Industry Competition Act 2006 (NSW), July 2013 (the Audit Guideline).

Audits are by necessity limited to sampling processes. It is not practicable, nor necessary, to inspect 100 per cent of items within an audit scope. Auditing forms part of the broader risk management process, providing an independent check on the veracity of the processes and procedures in place to manage risk. Finding a balance between audit effort and practicality requires the exercise of experienced professional judgement. The amount of effort allocated to this audit has been kept to a reasonable minimum level.

The audit was undertaken and reported in accordance with the Audit Guideline and its associated Appendices. The audit templates given in the Guideline provided the reporting format for the audit as well as the detailed audit criteria.

Audit steps

An Audit Plan was submitted to both IPART and the Licensee prior to the audit taking place. Documentation was supplied by the Licensee to both the auditor and IPART.

Desktop auditing took place both prior and subsequent to the site audit. A site audit took place on Thursday 11th June 2015; this comprised of on-‐site asset inspections during the morning and a desktop audit during the afternoon. Some evidence was followed up after the audit with the report being prepared and submitted to the Licensee as draft, then a final, before submission to IPART.

The audit process involved seeking objective evidence that the Licensee met the Licence obligations identified for audit by IPART. The auditors collected evidence through interview, document review and site inspection. The auditors randomly sampled examples sufficient to verify claims made by the Licensee.


Audit team

The audit was conducted in an integrated manner by two auditors who collectively addressed the various components of the audit scope; this report sets out the audit criteria that were applied. The two-‐member team that conducted the audits consisted of Dr Dan Deere and Mr Tom Carpenter, who hold relevant Lead Auditor Accreditation under IPART’s Technical Services and Water Licensing Audit Panel, as follows:

• Dr Dan Deere – Recycled Water Quality, Sewage Management and overall management of audit;

• Mr Tom Carpenter – Infrastructure Performance and related components.

Acknowledgements

The audit team notes, and greatly appreciates, the presence of IPART staff members Kaye Power and Sachin Singh as valuable observers and commentators during the audit.

The audit team notes, and greatly appreciates, the work and effort put in by those audited, including:

• Chow Leong, Recycled Water Treatment Plant Operator, Veolia;

• Inshan Sheriff, Hydrex & NSW Service Manager, Veolia; and

• Chris Dumbrell, Project Manager, Living Utilities – Property, Lend Lease.

Audit grades

Audit grades were awarded in accordance with the definitions given in the Audit Guideline. Compliance of operation of the infrastructure with the relevant legal and formal requirements was assessed. More generally the infrastructure was assessed for its capability to operate safely. Grades were allocated as follows:

• No Requirement (NR)

• Compliant (C)

• Non-‐compliant Insignificant (NCI)

• Non-‐compliant Significant (NCS)

2.4 Regulatory regime The scheme operates under the Water Industry Competition Act 2006 (WICA) which in turn references the following requirements:

• Water Industry Competition (General) Regulation (2008).

• Conditions of Network Operator's Licence No. 10_012.

• IPART Audit Guideline for Greenfield Schemes, Water Industry Competition Act 2006 (NSW), July 2013.

• Relevant aspects of the national Australian Guidelines for Water Recycling: Managing Health and Environmental Risks (Phase 1) 2006.

• Relevant water industry and environmental NSW and national codes of practice and regulations, as applicable.

2.5 Quality assurance process Quality was assured using a professional review process. Each auditor’s work was reviewed and approved by the other auditor. Both auditors are longstanding members of the IPART audit panel.


2.6 Audit findings Audit findings are summarised in the above Executive Summary; they are presented in more detail in sections 3 and 4 and in full detail in the following Appendices:

• Appendix A – Infrastructure Operating Plan – Outstanding Issues; and

• Appendix B – Water Quality Plan – Outstanding Issues.

2.7 Site audit agenda for Thursday 11th June 2015

Time Item and audit questions Location Lead

9:00 Opening meeting Wilton Dan Deere

9:15 Asset inspection

Which infrastructure is currently in commercial operation? Has any new infrastructure been introduced into commercial operation? If so has it been appropriately approved [WIC Reg Sched 1 cl. 2(1),(2(a,b))]?

Is there alignment between the IOP, SMP and WQP (npw) on the one hand and the observed assets on the other [WIC Reg Sched 1 cl. 6(1), 7(1)(b), WIC Reg Sch 1 cl. 13(1) and WIC Reg Sched 1 cl. 14(1)(a,b)]?

Is there alignment between the PDT, turbidity, UV and chlorine critical limits and requirements between the WQP, daily operator's recording worksheet and SCADA system [WIC Reg Sched 1 cl. 7(1)(b)]?

Is there evidence on site that the customer’s installations comply with the Plumbing and Drainage Act 2011(NSW) [WIC Reg Sched 1 cl. 11]?

Is there evidence that the system is being operated in a safe and reliable manner and maintained in a proper condition [WIC Reg Sched 1 cl. 3(c)]? The auditor will a detailed, appropriate inspection program to assess whether the sewerage and recycled water systems are safe and reliable. A detailed audit of the sewerage system will be undertaken to complete the assessment of the SMP and lOP. Specifically:

• Previous audits (reports dated Aug 2012 and Apr 2013) found non-‐compliances with the sewerage system. Issues include apparent breakdown in previous construction quality control, and lack of formalisation of forward operations and maintenance processes. High levels of stormwater ingress at the treatment plant suggest there may be issues in the sewerage network. Have these issues been assessed?

• The 2013 audit also identified non-‐compliance in signage and labelling of pipes in the recycled water pump station – have these been rectified?

• In meetings in November 2014 and January 2015, Lend Lease indicated that they have implemented a program to identify and fix the defects by June 2015. Has Lend Lease's rectification program been completed and what is its adequacy and progress?

Wilton Tom Carpenter

and

Dan Deere

11:00 Travel to site office



11:15 Codes and standards

Does the licence holder have regard to any publicly available standards or codes relating to its design, construction, operation and maintenance [WIC Reg Sched 1 cl. 3(c)]?

Previous audits (reports dated Aug 2012 and Apr 2013} found non-‐compliances with the sewerage system. Issues include apparent breakdown in previous construction quality control, and lack of formalisation of forward operations and maintenance processes. High levels of stormwater ingress at the treatment plant suggest there may be issues in the sewerage network. Have these issues now been addressed?

The 2013 audit also identified non-‐ compliance in signage and labelling of pipes in the recycled water pump station. Has it been completed?

In meetings in November 2014 and January 2015, Lend Lease indicated that they have implemented a program to identify and fix the defects by June 2015. Can the auditor review Lend Lease's rectification program so that he can assess the adequacy and progress of their program?


11:30 Metering and plumbing

How does the licensee ensure that customer’s installations comply with the Plumbing and Drainage Act 2011(NSW)? [WIC Reg Sched 1 cl. cl. 11]?


11:45 IOP implementation and currency

What work is undertaken to ensure that the infrastructure operating plan is fully implemented and the network operator’s activities are carried out in accordance with that plan and in what way is it kept under regular review [WIC Reg Sched 1 cl.6(2)(a) and WIC Reg Sch 1 cl. 13(1)]?




12:00 IOP supporting items and follow-‐up licence plan audit

Have gaps identified in the previous IOP audits been closed [(WIC Reg Sch 1cl.6(1) and WIC Reg Sched 1 cl. 13(1)]?

The 2012 audit found original maintenance schedule, based on OEM requirements, had not been utilised for development of O&M schedules currently being utilised. Have the original pre-‐operational maintenance schedules been applied to develop the current maintenance schedules? Have the monthly, quarterly and yearly scheduled works been integrated into the daily, weekly schedules currently used?

The 2012 audit found that in some cases, no safe working procedure was found in procedures. The rules and logic around calling out attendance on plant when communications are not functioning are unclear. Therefore, are clear, detailed safe work procedures now included in the lOP? Are there documented safety procedures for key risks? Are there documented communication protocols?

The 2012 audit found a lack of adequate current asset condition assessment for the sewerage network. Is there now a condition assessment procedure in the plan?

The 2012 audit found an issue with groundwater ingress into service shafts and possible house paving leading to ingress via overflows. Is there a procedure for monitoring potential sewerage ingress! egress? How did the lOP address sewerage ingress/egress based on risk assessment?

The 2012 audit found no QM document numbers (no controlled document codes on O&M manuals). Are there now document control procedures in place for important documents?

The 2012 audit found no record of signoff of operator capability or authorisation to operate plant was found. This should be in place for full membrane plant introduction. Are organisational authorisations for operator responsibilities and accountabilities now included in the plan?

The 2012 audit found that the sewerage system could not be adequately assessed by Auditor in some aspects. Has the lOP now adequately covered the sewerage network (noting that this could not be adequately assessed in previous audits)? Do operational and maintenance procedures now address both normal and abnormal (incident and emergency) conditions? Has the likelihood and consequences of asset failure should be predicted? Does the lOP now indicate the arrangements in relation to the maintenance, monitoring and reporting of standards and services?

The 2013 audit found a low but increasing risk to operational reliability associated with the lack of formalisation of forward operations and maintenance procedures. Are longer term operations and maintenance procedures now in the lOP which ensure appropriate risk management for ongoing operation? Can IPART now observe that the Licensee has a process in place in the IOP to ensure compliance with relevant plumbing code and network standards?

Both brevious audits (reports dated Aug 2012 and Apr 2013) found non-‐compliances with the sewerage system. Issues include apparent breakdown in previous construction quality control, and lack of formalisation of forward operations and maintenance processes. High levels of stormwater ingress at the treatment plant suggest there may be issues in the sewerage network. Have these issues been assessed?

The 2013 audit also identified non-‐compliance in signage and labelling of pipes in the recycled water pump station – have these been rectified?

In meetings in November 2014 and January 2015, Lend Lease indicated that they have implemented a program to identify and fix the defects by June 2015. Has Lend Lease's rectification program been completed and what is its adequacy and progress?


1:00 Lunch -‐ -‐



1:30 SMP implementation and currency

What work is undertaken to ensure that the sewage management plan is fully implemented and kept under regular review and all its activities are carried out in accordance with the plan [WIC Reg Sched 1 cl. 14(3)(a)]?

Wilton Dan Deere

1:45 SMP supporting items and follow-‐up licence plan audit

Have gaps identified in the previous SMP audits been closed [(WIC Reg Sch 1cl.14(1)(a,b)]?

2012 finding: The risk assessments need to be extended to include residual risk with control in place, and a more process step by process step risk assessment, in the AGWR/HACCP style. Are residual risks and controls for each process step now included in the risk assessment for the SMP?

2013 finding: Low but increasing environmental risks due to excess stormwater entry to sewer, spillage from sewer and misuse of recycled water associated with the lack of formalisation of relevant forward O&M processes. Are environmental risks in the risk register and environmental management procedures included in the SMP?

Wilton Dan Deere

2:15 WQP implementation and currency

What work is undertaken to ensure that the water quality plan is fully implemented and the network operator’s activities are carried out in accordance with that plan and in what way is it kept under regular review [WIC Reg Sched 1 cl.7(4)(a)]?

Wilton Dan Deere

2:45 WQP supporting items and follow-‐up licence plan audit

Have gaps identified in the previous WQP audits been closed [(WIC Reg Sch 1cl.7(1)(b)]?

2012 finding: Element 2 The risk assessments completed under the HAZOP and the high level risk assessment for the scheme collectively provide adequate risk assessment documentation to meet this requirement but need to be extended to include residual risk with controls in place, and a more process step by process step risk assessment, in the AGWR/HACCP style, to become fully adequate. Are residual risks now and controls for each process step included in the risk assessment?

2012 finding: Element 2 There is no explicit identification of 'uncertainty' in the risk assessment although actions are assigned for each risk that would help investigate uncertainties. This issue does not affect scheme compliance from a scheme safety perspective but is an opportunity for improvement. Have uncertainties now been identified, investigated and documented in the risk assessment?

The 2012 audit found general training has been undertaken for incident management (AGWR Element 6) but to date a whole of scheme training incident has not been undertaken with Lend Lease. There was a low risk of confusion arising during incidents. Has this risk been addressed? Has the licensee undertaken a whole of scheme incident training session?

Wilton Dan Deere

3:00 Afternoon break -‐ -‐

3:15 Incidents

Have any incidents occurred during the conduct of the network operator’s activities that threaten, or could threaten, water quality, public health or safety and, if so, have the Minister administering the Public Health Act 2010 (NSW) and the Public Health Regulation 2012 (NSW), the Minister administering Part 2 of the Water Industry Competition Act 2006 (NSW) and any connected network operator, retail supplier or public water utility been notified [WIC Reg Sched 1 cl. 1(2)(a,b,c,d,e)]?

In addition to personal testimony, evidence will be requested in the form of water quality monitoring and SCADA results to show whether or not any incidents occurred during the audit period that threatened water quality, public health or safety.

Wilton Dan Deere

Report on Follow-‐up Licence Plan Audit of Network Operator’s Licence No. 10_012 (Bingara Gorge) under WICA. of 20

Document Version 5. Water Futures and iq-‐AM. Last updated: 15-‐July-‐2015. Doc Controller: DD.


3:30 Changes to use

For what purpose has the non-‐potable water been supplied and what evidence is there that the water has been fit for that purpose [WIC Reg Sched 1 cl. 10(a)]?

Wilton Dan Deere

3:15 Changes to authorised persons

Has an Authorised Person ceased, proposed to cease or received notification to cease providing any of the services relating to the activities authorised by this Licence and, if so, has the Licence Holder provided IPART with written notice as soon as practicable and in any event no later than 28 days before the date of cessation of the services and, if so, did such written notice include details of how the services previously undertaken by the Authorised Person will continue to be undertaken [Network Operator Licence cl. B10]?

Wilton Dan Deere

3:30 Code of conduct

Is Veolia’s network is connected to another licenced network operator or a public water utility and, if so, has the Licence Holder established a code of conduct, in writing, in relation to the respective responsibilities of the Licence Holder and each licensed network operator, licensed retail supplier and/or public water utility that is responsible for the other water industry infrastructure in accordance with Network Operator Licence cl. B9.3 [Network Operator Licence cl. B9.1 to 9.3]?

Wilton Dan Deere

3:45 Sampling and analysis

Has the appropriate water quality verification monitoring been undertaken, have full sampling records (date, time, location, sampler name) been kept and were the analyses NATA accredited [Network Operator Licence cl. B7.1 to 7.3]?

Wilton Dan Deere

4:00 Contingency period – additional items that may arise. -‐ -‐

4:30 Audit close Wilton Dan Deere



3. Infrastructure Operating Plan – Outstanding Issues

3.1 Summary of findings WIC Reg Sch 1cl.6(1) and 13(1) – non-‐compliant insignificant:

Although Veolia has yet to have all assets covered in its systematic asset management system, the most critical assets are included and work is continuing to include additional assets. Therefore, although this finding is a non-‐compliance, it is considered insignificant provided work to address the shortfalls continues.

To achieve full compliance, it is recommend that:

• The Licence Holder work to address the shortfalls in the asset management system continues, including populating the asset management system with all network assets.

3.2 Review of actions The Licensee did not provide any additional data or information and did not make any suggestions for corrections or clarifications following the review of the draft report prior to the final report being issued.

3.3 Opportunities for improvement No opportunities for improvement (further to the above recommendations) have been identified in respect of the Infrastructure Operating Plan as a result of this audit.



4. Water Quality Plan (non-‐potable water) (WQP (npw)) – Outstanding Issues

4.1 Summary of findings WIC Reg Sched 1 cl.7(1)(b) – non-‐compliant insignificant:

There is no explicit identification of 'uncertainty' or ‘residual risk’ in the risk assessment and the risk assessment does not consider risks for each process step. However, since the current treatment process will soon be upgraded to a new one, and since a more comprehensive risk assessment has been completed for the new process, this non-‐compliance has been rated as insignificant.


• in future risk assessments the Licence Holder should document and investigate uncertainties and assess maximum and residual risks at specific process steps.


4.3 Opportunities for improvement It would be helpful to include table numbers for ease of cross-‐referencing.



5. Sewage Management Plan (SMP) – Outstanding Issues

5.1 Summary of findings WIC Reg Sched 1 cl. 14(1)(a) & (b) – non-‐compliant insignificant:



• in future risk assessments Licence Holder should document and investigate uncertainties and assess maximum and residual risks at specific process steps.


5.3 Opportunities for improvement It would be helpful to include table numbers for ease of cross-‐referencing.



Appendix A Infrastructure Operating Plan (IOP) – Outstanding Issues

WIC Reg Sch 1cl.6(1) and 13(1)

Requirement Compliance Grade

Before commencing to operate water/sewerage infrastructure commercially, the licensed network operator for the infrastructure must prepare, and forward to IPART, an infrastructure operating plan that indicates the arrangements that the licensee has made, or proposes to make, in relation to:

(b) the continued safe and reliable performance of the infrastructure, and

(e) the maintenance, monitoring and reporting of standards of service.

Non-‐compliant Insignificant

Risk

There was a low but growing risk of inadequate asset management due to the asset management system not being populated with all network assets.

Target for Full Compliance

The asset management system should be populated with all network assets.

Evidence sighted

§ Infrastructure Operating Plan (IOP) entitled: Bingara Gorge Development Network Operator’s Combined Sewerage & Water Infrastructure Operating Plan, Rev 4, February 2015.

§ Interview with Inshan Sheriff, Chris Dumbrell and Chow Leong.

§ Field inspection at Bingara Gorge, Wilton, on the morning of 11th June 2015.

§ Review of electronic and hard copy documents and records at Veolia, Macquarie Park, 11th June 2015.

Summary of reasons for grade

Although Veolia has yet to have all assets covered in its systematic asset management system, the most critical assets are included and work is continuing to include additional assets. Therefore, although this finding is a non-‐compliance, it is considered insignificant provided work to address the shortfalls continues.

Discussion and notes

IOP currency

The Infrastructure Operating Plan (IOP) was last updated on the 25th February 2015 and provided to IPART on the 27th March 20151. This document appears to be sufficiently current and up to date.

Asset management

The 2012 audit found that the original maintenance schedule, based on OEM requirements, had not been utilised for development of the operations and maintenance schedules currently being utilised. During the current audit the auditors asked whether or not the original pre-‐operational maintenance schedules had been applied to develop the current maintenance schedules and whether or not the monthly, quarterly and yearly scheduled works had been integrated into the daily, weekly schedules currently used. In addition, the 2013 audit found a low but increasing risk to operational reliability associated with the lack of formalisation of forward operations and maintenance procedures. During the current audit the auditors asked for evidence that longer term operations and maintenance procedures are now in the lOP to ensure appropriate risk management for ongoing operation. Finally, the 2012 audit found a lack of adequate current asset condition assessment for the sewerage network. During the current audit the Licence Holder was asked for evidence of a condition assessment procedure in the IOP.

1 Email from Dan Deere to Kaye Power and Sachin Singh dated 27th March 2015.



Veolia have developed a detailed plan for asset maintenance based on documents prepared by VKL Consulting2. This document covers the frequency of inspection of sewer reticulation, maintenance holes and sewage pump stations. Veolia demonstrated examples of the civil drawings and network drawings of the network assets from the construction contractors and have access to the Lend Lease dial-‐before-‐you-‐dig asset information.

Veolia are using an asset management worksheet-‐based temporary asset management system (as they are for the Darling Quarter plant) rather than using a sophisticated asset management system. However, at present Veolia has only captured the details of operations and maintenance for the sewage pump stations and the generators in its excel-‐based management system. In addition, although most of the network assets are now on an Arc-‐GIS database with Lend Lease, Veolia don’t yet have these assets on the Veolia GIS. For other assets the worksheet system is not yet complete. Therefore, it cannot be said that Veolia has implemented a comprehensive asset management system for the network at the time of the audit, although it is noted that the network assets are very new, and that the most sensitive assets are included.

Some assets, such as covers, generators, sewer pump stations and pits, are included on the inspection schedules of the plant operator. Generators on the treatment plant and pump stations are scheduled for weekly services and start up runs. In general, the major pump stations have full redundancy as well as level indication alarms. Flow rate analysers and level sensors come with calibration certificates (examples were sighted).

Veolia took over operations and maintenance of the network infrastructure during December 2014. Other contractors used include VKL, who are involved in design specifications, and Cardno who carry out both hydraulic design as well as carrying out independent checks on adequacy of construction.

Documented operating procedures

The 2012 audit found that in some cases, no safe working procedure was found in procedures. During the current audit procedures were reviewed.

Veolia now has a broad set of operating procedures in place. These included Standard Operating Procedures (SOP) and Safe Work Methods Statements (SWMS). An SOP3 and SWMS4 were reviewed in detail and these procedures appeared to be adequate. This was considered adequate.

Meter readings

At present Veolia conducts quarterly meter readings. This was considered adequate.

Contractor management

Veolia takes part in formal reporting and meetings with Lend Lease on its asset management and operations and maintenance. This includes Quarterly Meetings, Periodic Service Management Reviews and Monthly Reports from Veolia to Lend Lease. This was considered adequate.

Sewerage system

The 2012 audit found that the sewerage system could not be adequately assessed by the Auditor in some aspects. During the current audit, the auditors sought evidence that the lOP now adequately covered the sewerage network. The auditors examined whether or not operational and maintenance procedures addressed both normal and abnormal (incident and emergency) conditions and whether or not likelihood and consequences of asset failure had been predicted. In addition, the lOP was assessed for an indication of the arrangements in relation to the maintenance, monitoring and reporting of standards and services. Finally, the auditors sought evidence that the Licensee had a process in place to ensure compliance with relevant plumbing code and network standards.

Under the current arrangements, the Water Services Coordinator, Cardno signs off all of the recycled and sewer assets and QualCheck do the same for the potable assets. In the past QualCheck conducted that sign-‐off without the involvement of Cardno. This was considered adequate.

2 An example was seen of the “Gravity Sewer System O&M Requirements” document prepared by VKL Consulting. 3 An example was seen of a Standard Operating Procedure for ECO Disk Drum Screen “CIP-‐PR-‐BG-‐OPS-‐007-‐Rev 1”. 4 An example was seen of a Safe Work Method Statement for UV Replace Lamp/Sleeve “SWMS-‐OHS-‐081”.



Call out to plant

The 2012 audit found that the rules and logic around calling out attendance on plant when communications are not functioning were unclear.

During the audit evidence was sought of clear, detailed safe work procedures being included in the lOP, documented safety procedures for key risks and documented communication protocols. It was noted that there is just one 1300 number for all issues which goes to Veolia as the responsible entity for first response. This was considered adequate.

Sewerage ingress/egress

The 2012 audit found an issue with groundwater ingress into service shafts and possible house paving leading to ingress via overflows. During the current audit evidence was sought of a procedure for monitoring potential sewerage ingress/egress and of how the lOP addressed sewerage ingress/egress based on risk assessment?

During the audit it was noted that on the existing system, the sewage pump stations now have high level alarms so that there is an alarm if there is a high level in those pump stations. The new assets will include pressure sewers with alarms in the POTs (albeit out of scope of the audit period). This was considered adequate.

Document quality management

The 2012 audit found no quality management document numbers (e.g. no controlled document codes on operations and maintenance manuals.). During the current audit evidence was sought of document control procedures in place for important documents.

The audit found that LATIS is now used to trigger work orders for revision of documents. Documents are nominally reviewed and updated every three years. All documents are stored on the backed up “J drive”. This was considered adequate.

Operator capability

The 2012 audit found no record of signoff of operator capability or authorisation to operate the treatment plant. The auditors considered that such training should be in place for membrane plants. During the current audit evidence was sought of organisational authorisations for operator responsibilities and accountabilities within the IOP.

The audit found evidence of Chow Leong having completed training for Part 1 of Wastewater TO during August 2011. David Harris had signed off an Operator Level Credit whereby Veolia certifies that its operators can operate the specific plants. This was considered adequate.

Recommendations

It is recommended that the Licence Holder work to address the shortfalls in the asset management system continues, including populating the asset management system with all network assets.

Opportunities for improvement

No opportunities for improvement have been identified in respect of this requirement.



Appendix B Water Quality Plan (non-‐potable water) (WQP (npw)) – Outstanding Issues

WIC Reg Sched 1 cl.7(1)(b)


Before commencing to operate water infrastructure commercially, the licensed network operator for the infrastructure must prepare, and forward to IPART, a water quality plan, in relation to the water supplied from the infrastructure, that specifies:

a) if the water so supplied is non-‐potable water, how the 12 elements of the framework for the management of recycled water quality and use, as detailed in the Australian Guidelines for Water Recycling, have been addressed and will be implemented and, having regard to those guidelines, the purposes for which the water may be used and the purposes for which the water may not be used.


Risk

There is a low risk that some relatively uncertain risks were not adequately investigated or that inadequate controls were not identified at specific process steps.


Documentation and investigation in future risk assessments of uncertainties and assessment of maximum and residual risks at specific process steps.

Evidence sighted



§ Review of electronic and hard copy documents and records at Lend Lease, Wilton, 11th June 2015.

§ Combined Sewage Management Plan (SMP) and Water Quality Plan (non-‐potable water) (WQP (npw) entitled: Bingara Gorge Development Network Operator’s Sewage Management & Water Quality Plan, Rev 6, March 2015.




Element 2. Risk assessment.

It was noted during the 2012 audit that the risk assessments did not include residual risk5, not did the process assess risk process step by process step risk6. In addition the risk assessment did not consider uncertainty. The auditors reviewed the most recent risk assessment to see whether or not residual risks and uncertainties had been assessed and whether or not risks had been assessed for each process step.

The audit found that on the 27th March 2015 Veolia conducted a revised risk assessment relating to its new recycled water treatment plant but not relating to the current arrangement. Therefore, at the time of the audit, the most recent relevant risk assessment did not include an assessment of residual risks and uncertainties and had not considered each process step in the risk assessment.

5 Risk assessed assuming the controls are in place. 6 As illustrated in the examples given in the Australian Guideline for Water Recycling 2006.



Element 6. Incident response.

The 2012 audit found that general training had been undertaken for incident management and that a whole of scheme training incident had not been undertaken with Lend Lease. Therefore, there was a low risk of confusion arising during incidents. During the current audit, the auditors asked how this risk had been addressed including asking whether or not the licensee had undertaken a whole of scheme incident training session with Lend Lease. Since the previous audit, operational responsibility for the scheme has moved to Veolia with the role of Lend Lease now being very minimal. For instance, it is now Veolia that man the 1300 number and manage the operations and maintenance for all assets. Therefore, such an action is no longer considered a priority and this insignificant non-‐compliance is now considered compliant.

Element 10. Documentation and reporting.

It was noted that the document did not contain table heading numbers for ease of cross-‐referencing and there is room to improve the document by including these.

Recommendations

It is recommended that in future risk assessments the Licence Holder document and investigate uncertainties and assess maximum and residual risks at specific process steps.


It would be helpful to include table numbers for ease of cross-‐referencing.



Appendix C Sewage Management Plan (SMP) – Outstanding Issues

WIC Reg Sched 1 cl. 14(1)(a) & (b)


Before commencing to operate sewerage infrastructure commercially, the licensed network operator for the infrastructure must prepare, and forward to IPART, a sewage management plan, in relation to the conveyance, treatment and disposal of sewage by means of the infrastructure, that indicates:

a) the manner in which health and ecological assessments will be undertaken and any concerns arising from any such assessment addressed, and

b) the arrangements for the disposal of waste from the infrastructure.


Risk

There is a low risk that some relatively uncertain risks were not adequately investigated or that inadequate controls were not identified at specific process steps.


Documentation and investigation in future risk assessments of uncertainties and assessment of maximum and residual risks at specific process steps.

Evidence sighted



§ Review of electronic and hard copy documents and records at Lend Lease, Wilton, 11th June 2015.

§ Combined Sewage Management Plan (SMP) and Water Quality Plan (non-‐potable water) (WQP (npw) entitled: Bingara Gorge Development Network Operator’s Sewage Management & Water Quality Plan, Rev 6, March 2015.




Element 2. Risk assessment

It was noted during the 2012 audit that the risk assessments did not include residual risk7, not did the process assess risk process step by process step risk8. In addition the risk assessment did not consider uncertainty. The auditors reviewed the most recent risk assessment to see whether or not residual risks and uncertainties had been assessed and whether or not risks had been assessed for each process step.

The audit found that on the 27th March 2015 Veolia conducted a revised risk assessment relating to its new recycled water treatment plant but not relating to the current arrangement. Therefore, at the time of the audit, the most recent relevant risk assessment did not include an assessment of residual risks and uncertainties and had not considered each process step in the risk assessment.

7 Risk assessed assuming the controls are in place. 8 As illustrated in the examples given in the Australian Guideline for Water Recycling 2006.



Element 10. Documentation and reporting.

It was noted that the document did not contain table heading numbers for ease of cross-‐referencing and there is room to improve the document by including these.

Recommendations

It is recommended that in future risk assessments the Licence Holder document and investigate uncertainties and assess maximum and residual risks at specific process steps.


It would be helpful to include table numbers for ease of cross-‐referencing.