Analysis of urban water supply costs

This work deals with a very broad range of issues which derive from the interface between the design, development and management of water supp l y systems and urban development and change. The decisions taken by water supply authorities can affect the density and even the size of our cities . Their decisions can affect the supply )f serviced land and, hence, its price as well . Water supply policies may change the distribution of income. The heavy use of capital by water supply authorities demands a great deal of discretion. The list of implications goes on. An attempt j.8 made in this thesis to better understand some aspects of these problems by analysing the response of water supply costs to changes in certain characteristics of urban areas, as well as by evaluating how certain decisions taken by supply authorities can affect the characteristics of our urban areas. To some extent, this process is circular. Residential density, for example will affect supply costs while water supply pricing and charging policies may affect residential density . A policy on , [or example, safe draught will affect investment levels which can, in turn , affect prices. In this thesis, the effects on water supply costs of a key parameter of urban development - its density - are analysed in some detail . It is assumed that urban density is, in the first instance, determined exogeneously; that is, beyond the control or influence of the supply authority. Other variables, also beyond the apparent control of the supply authority, such as the rat e of inflation and the age of their infrastructure have an impact on costs. They are assessed by analysing the behaviour of the ratio of replacement to reported accounting costs. Knowing the influence of these variables on costs, the supply authority may be able to take certain actions which will affect~ say, urban density. Thus, alternative institutional policies concerning pricing and financing of water supply are also explored. In addition, the impact of investment decision making policy will be felt in, among other areas, the relative rate of capacity utilisation and the extent of excess capacity in the system. This area is also explored The analysis of cost behaviour with respect to changes in population, dwelling occupancy rate , dwelling unit density, per capita consumption and other exogeneous variables, which is the foundation of each chapter in this thesis , also gives some insight into the fiscal impact of urban growth and any external diseconomies in water supply associated with increased urban size. Consequently, a discussion of inter-urban decentralisation in the Australian context is also given. Analyses of water supply replacement costs , excess capacity costs, cost implications of urban density and urban form as well as financing, pricing and inter-urban decentralisation policies are inter-connected in a sometimes complex fashion. Many of the inter-actions are examined in this thesis using a powerful combination of reasonably large data sets, theoretical models of cost behaviour and a step-wise regression technique . The analyses given are strongly dependent on data from the Sydney Metropolitan Water, Sewerage and Drainage Board. The Board has kept comprehensive and consistent records of its operations since its inception and subsequently it was possible to obtain a very long, detailed and unique series of data covering the period 1890 to 1976. Much of this data is reproduced in the tables and appendices of this thesis. In addition, analysis of the Melbourne and Metropolitan Board of Works over the same time frame and a cross - sectional analysis of major Australian urban areas during 1971 are used , in part, to confirm or extend the conclusions reached in the Sydney case study. Too often, interesting analyses have been carried out without relating the results to real world problems . In this thesis , various models of the behaviour of water supply costs are postulated , data are acquired and the models are tested . However, each model of cost behaviour is evolved from a specific problem or hypothesis and, hence , is contained In the chapter dealing with that problem . Therefore, although this the sis is entitled "Analysis of Urban Water Supply Costs" it does not contain a chapter on cost analysis per se