Sydney Water is Australia’s largest water utility. In this issue we talk to Managing Director Kevin Young about the past, present and future of Sydney Water, and the circuitous path that led him to his current role.
The path to Sydney Water
When he first started in the water industry, Kevin never saw himself ending up at the head of Sydney Water. “I actually started by working in the gangs laying water and sewer mains, working with electricians doing pump maintenance transformer and was a labourer for the crews,” he says.
“I was a cadet at Hunter Water and they put their cadets full time through university. I worked for Hunter Water immediately afterwards and I didn’t like the water industry back then because it wasn’t efficient or as focused – it was more old world – so I left them and I joined the private sector. But interestingly, just at the time I left Hunter Water in the early 1980s, Dr John Patterson came in. He was one of the great leaders of the water industry and he changed the water industry to focus more on customers, including the introduction of user-pays.
“I stayed with the private sector and I worked overseas, but then I started to notice this groundswell of change in the water industry and I really liked what I saw. I had worked across a range of engineering disciplines when I got this amazing opportunity to come back and work at Hunter Water in the early 1990s as their organisation’s first asset manager. Before then the water industry was all about constructing things but now people had realised our assets are starting to reach an age where we need to consider how we get the most out of our assets and what’s the best maintenance we can do. That was just a wonderful opportunity to come back into the industry because it touched the whole business.
“The MD at that time was Dave Evans – he was a bit of a cricket fan and he gave me this incredible job title which was ‘The Twelfth Man’. One day I said to him, ‘What’s the twelfth man?’ He said ‘We’ve got the executive team and what you are is that you come in as the utility player if I need someone to bowl, bat or field’. So I had this incredible experience of doing a lot of relief across the business. So I did customer service, operations, strategic planning, government relations, HR, waste water treatment – it was just a wonderful time.
“Then I was Company Secretary and when David Evans got the job at Sydney Water and I was asked by the board, on one of those great days to be Managing Director at Hunter Water. I said I’d be delighted.
“I’d been there for seven years as Managing Director when Kerry Schott left Sydney Water and I applied and was absolutely delighted to get the job. I think that was a dream come true.”
It is notable that the last three Managing Directors at Hunter Water have all become Managing Directors of Sydney Water; Paul Broad, David Evans and now Kevin, who has his own thoughts on why this might be the case
“I think it’s almost like a pilot for the role because it’s a smaller organization – it’s a ninth the size of Sydney Water, but because it’s so much smaller if you’re Managing Director or Executive Manager you’ve got to know every part of the business. In bigger organizations you have dedicated teams in each of the areas and silos tend to form. In smaller organizations you have to understand all parts of the business.”
Reflecting on the differences between the two organisations, Kevin noted that, “geographically Hunter Water is a similar area, but it’s just spread out so wide. So there’s a lot more vulnerability in the Hunter system than there is in the Sydney system because you’ve got long, single pipes running long distances. We had 450 staff, so when we wanted to talk about strategic direction and new plans in Hunter you could actually talk to the business. But in Sydney, when I first came down here, we had 3000 people and spread out over an area down to the Illawarra and out West. The huge Sydney region – it’s a big exercise. I think the internal communication is a lot harder in Sydney Water. We’re doing really well on that, trying to use things like internal social networks. But I spend a lot more time getting out and about and seeing the different parts of the business than I ever did in Hunter.”
The last 30 years
When Kevin first started in the water industry, houses didn’t even have water meters. Kevin recalls that when Dr John Patterson first introduced user-pays in the Hunter “People marched in the streets to say that they didn’t want to pay for the water that they were using. It didn’t have a commercial focus and it wasn’t respected. Now people see it as a valuable commodity.”
Another change has been the shift from monolithic utilities, to smaller organisations that outsource many functions. Kevin reflects that when he began utilities “were run as in-house groups and we did everything.
“So there was very little that we partnered with the private sector. If we wanted to do investigation, design, even construction – everything was in-house without competition.
“What we’ve seen now is just a dramatic change and I think you can see that in the numbers. Sydney Water going back to when I first came out of uni around 1980, had 14,000 employees, today we’ve got 2,450.”
Reflecting on the changes in equipment, Kevin recalled, “Pumps – they were great, slow, big pumps that would last forever and I think we’ve moved now to faster speed pumps and more efficient – the cost has come down.
”When I first started in the industry someone told me our oldest pump was something like a hundred years old. I said that was not possible. But while it was the same pump it had its motor replaced about eight times and it’s had its impeller replaced. It’s like your grandfather’s axe – it’s the same one he had, it’s just had ten handles and six heads!”
Improvements in information and communications technology have also saved an enormous amount of time and resources, “When I was a graduate they used to have to send people out on runs to check gauges on the sides of the reservoirs to see how full they were and come back into town to ring up and say the system is working all right. Now of course it’s completely computerised –the whole Sydney Water network runs automatically, all pumps – if a pump fails the computer system works out the next best pump to put in. It’s trying to optimise operations costs, make sure we’ve got water – it’s fantastic what we can do today, it’s incredible.”
The next 30 years
Having seen the staggering pace of change of the last 30 years, Kevin expects the water utilities of the 2040s to be dramatically different again.
“With climate variation coming in and the challenges that we’ll face with bushfires and sea level rises and also more storms – we will need to be more resilient in that area. The world will move itself to put a cost on energy and carbon dioxide and the water industry will move towards producing more and more energy from our waste water networks.”
This is an area in which Sydney Water is already well progressed. “Our major waste water treatment plants now feed into tanks where methane gas is produced anaerobically. Then we’ve got co-generation facilities that generate energy on site. We have the capacity at the moment to generate up to 20% of our energy needs through cogeneration and hydro power at the moment.
“We were commenting the other day that in the past Sydney Water would run campaigns and tell people not to put oil and fat down the sink. While in the future we would run campaigns to say we want you to put oil and fat down the sink because we can generate energy from it.”
“Another big change is the growing population. Sydney’s going to have something like another million people within that time frame. There will be more need for integrated systems, water waste water, recycled water. People will want greenery in the cities, they’ll want some urban gardens, they’ll want water to be part of their cities.”
Continuing improvements in communications will also bring out more change, “Everyone will be on smart meters. You will be able to get information about how your house is using water today, this last two minutes, this five minutes – what the trend has been. It will send you an sms if you’re outside certain ranges so you can try and understand why you’re using water, whether you have a leak.”
Kevin speculates about where may lead, “Could you actually have cash for water, the same as telecommunications? Pricing plans – would you actually say that people could pre-pay for water and that’s possible or do they get a cap – a certain allowance? Do they pay for a certain drought security, different arrangements – there’s a lot of options that come in. Just imagine if you went up to your cap and – in my household if I go to my cap on the internet then the internet slows, I wonder if that would happen in water.”
Could water utilities in the future more closely reflect changes already seen in energy and telecommunications? “In the future there’ll be a lot more competition in water so you’ll get a lot more wholesale water suppliers coming in, competing, storm water, recycled water. I suspect in the future it could be that you could get private sector retailers coming in. I don’t know if it’ll go the same way as energy, but it’s possible. Those new retailers will want to differentiate themselves from others so they’ll be trying to give you different plans based on what they think a modern generation will want. When I say ‘modern generation’ I don’t mean the modern generation now, I mean the modern generation in the future – in 30 years’ time. That will be dramatically different, that generation will understand technology – they’ll understand social networks, what the deals are and how to get the best value out of it.
“The overall big trend is that places like Sydney Water we’re not plumbers, we’re planners and that’s what we’re seeing overseas. You’ve got to be really focused on strategic planning and enhance that Liveability in cities is going to be a key trend overseas and for us.”
Another key to the future of the sector will be the ability to attract and retain the right people. Kevin explains how Sydney Water is managing with this, “The people that work for us love to work for us so we don’t get much turnover, but what we’re doing is putting on a lot of graduates and we’re finding that we’re attracting graduates of amazing calibre. So I’m really pleased with our graduate program, it’s really popular and I think, in recent years, we’ve had a significant number of graduates that have joined the organization.”
The Sydney Water graduate program is a three-year program and includes civil, chemical, mechanical, environmental and electrical engineering as well as environmental science, commerce, business and economics, accounting, communications and marketing. Eigtheen started on the program in 2013 and 2012 and twelve will start in 2014. The average retention rate is 92%.
Out of sight
When asked what he believes is the main thing about the industry that the general public isn’t aware of, Kevin said: “The scale and complexity of the network that we run and what’s involved in giving them the clean water and taking away their waste water and treating it in a very sustainable manner. We’ve got 21,000 kilometres of water mains, and slightly more in waste water mains (24,000 kilometres). If you stretch our drinking water network end to end it will go to America and virtually back. We’ve got this incredibly complex network with all of these reservoirs and pumping stations and I think what people don’t understand is how well we manage risk and how we try and balance investing in new assets and maintenance and all the scheduling that we do. How do we make sure that all of the pumps, the waste water treatment plants, the water treatment plants – they’re all hitting their targets. It seems seamless and easy, but it’s far from that, there’s a dedicated group of people that really drive all that hard.”
Does Kevin think it matters that people often take this service for granted? “I think that’s the old proverb isn’t it? You only know the value of the well when the well runs dry. If you’re without water for an extended time period then you would think wow, this is an incredible product that we need. Luckily that doesn’t happen, but I always say for $2.17 a kilolitre you get a tonne of food grade water, world class standard, delivered to your taps and the appliances in your house on a virtually continuous basis and I think that’s great value.”
“The recent fires – the organization just was fantastic in meeting unexpected needs for water during those fires. Generally Springwood uses 4 million litres of water a day and on the day of the Springwood Fires it used 28 million litres of water. So the guys reconfigured how to get water from different locations to make sure that we could provide water for that community for the fire fighting. We were getting water in dams so that the helicopters could pick it up.”
Kevin has a keen eye on what other utilities are doing, both here and overseas and is always to new innovation, “There’s some great utilities here and overseas that are doing fantastic things with cultural change within the business, really focusing on customer service and getting customers involved.
“We’ve been watching some of the UK utilities like South West Water and Thames Water that have smart phone apps where you can pay your bill on your smartphone or find out what the storages are or report a leak in the street. I’d love some of the stuff as the new technology in what people are doing to link with customers – it’s fantastic.
“If you see a leak in the old days you’d go back to your house and you’d ring up and get through and then you’d try and describe to the person on the phone – I’ve got a leak. They’d say, where is it? Well I think I think it’s Smith Street, but it could be Gold Street – but with the app you could take a photo of it, it’s geospatial so it knows exactly where the leak is. When we’re trying to do triage – if you talk to a customer and say well how big is the leak? Is it an emergency? They’re trying to tell you how much water is coming out of it, but when you see the photo you can triage it immediately.”
Kevin believes that there is also much that overseas utilities can learn from Australia, especially in areas such as innovation and research “We’ve got a major project that a number of water utilities are involved in predicting pipe failures through critical water mains. We are creating a new tool to predict a critical failure before it occurs and we’re partnering with three universities, UTS, University of Newcastle and Monash. It’s attracted so much attention that the Water Research Foundation has become a major research partner because they believe that the work that’s being done here in Australia has got worldwide implications.”
Memorable moments
When asked which achievements in his long career he is most proud of. He immediately recalls a time at Hunter Water where he was tasked with improving safety. “I put a lot of personal commitment into that work with a great team and we got our safety stats down. I’ve always thought that that improvement potentially could have saved someone’s life and definitely stopped people being injured. I think we went for no lost time injuries in Hunter Water for period of 18 months which was amazing.”
Another memorable career moment for Kevin was his time with Seattle Public Utilities, in the northwestern USA. Working with the Managing Director, Kevin implemented a change management program over a period of 10 months. “I really put my heart and soul into that – we drove great efficiencies in the business. On the last day, when I was leaving, there was a major executive meeting on and I just had to go to the airport. As I stopped to take my bag and walk out of the door, it must have been 40 people, the entire room stopped the conversation and they stood up and they started to clap. That was a sort of spontaneous response that I look back on meaning that I made a difference in their lives.
“And at Sydney Water what we’ve done in driving efficiencies in the business has been nothing short of amazing. I think we went from bills that were going up significantly to this current price path – bills are going up by less than inflation. So we’ve done some great things there, the organization is really caring about affordability for customers.
“I think the water efficiency program that’s been run in Sydney has been spectacular. It’s often said that we use the same water today that we did in the 1970s and we’ve got a million more people. So they’ve really done well here in water efficiency.”
A critical role like this requires both a lot of hard work, but also maintaining a healthy balance. So what is involved in a typical day for Kevin. “I’m an early riser so I tend to get up by 5:30am. I get into work early and ride a bike in couple of days a week to and from where I live about 12 kilometres away.” The workday starts at about 6:30am, “I find that a really great time for me to do my top ten things I want to do in the day and plan the day out and knock my emails over. Then the day is pretty well full on then, the day is chock-a-block with meetings and working with different teams or talking at different functions.” Kevin manages to still get home in good time for dinner with the family, and will put in an hour at the gym and work as needed in the evening.
In a career that’s taken him from the labour gangs laying pipe to the top of Australia’s largest water utility, one constant is his passion and enthusiasm for the sector. So what is it about the water industry that inspires him so much? “That we’re the essence of life for our community. We have a life giving product that people just turn on the tap to get. Then we take their waste away at the press of a button. I like the fact that we do that great job and often people don’t think about it. But the people in this industry– that’s what they care about. They love the fact that we’ve been around for 125 years and that we’ve got a big future to keep that going. People in the water industry love being part of the business.”
