INTRODUCTION Sydney Water is the largest water services provider in Australia with annual total revenue of $1.4 billion and assets in excess of $13 billion. It manages large-scale programs of capital works and maintenance. In recent years it has completed a number of projects including the $90 million upgrade of the Cronulla sewage treatment plant and the $460 million Alliance for the Northside Storage Tunnel. The CIBS project with a final budget of $60 million was Sydney Water’s largest IT project. In October 2002 the Treasurer requested the Auditor-General to audit CIBS and report to Parliament. The review covers Sydney Water’s performance in relation to: § § § § § project governance project specification, interface with users, project management selection of suitable contractor cost estimation risk management.
Our work has primarily focused on relevant Sydney Water documentation and interviews with individuals mainly within Sydney Water. It has been d one with the benefit of hindsight. Some individuals and parties external to Sydney Water, including PricewaterhouseCoopers (PwC) and the previous Managing Director of Sydney Water, Mr Alex Walker, were also interviewed. The focus on Sydney Water should not carry any adverse inference about Sydney Water’s legal relationship with PwC. At the time of the request for the review, Sydney Water was seeking legal advice on the project’s contractual arrangements and was considering its legal options in relation to the contract. Sydney Water is considering litigation at the time of tabling this report. Usually when the Auditor-General is aware that an agency may be involved with litigation, we would not report in such detail that it could unduly influence the outcome of the litigation. Detailed reporting may occur once the litigation has been settled. However, the Auditor-General has reviewed and reported before any possible litigation. Potential litigation