1.Introduction

On the basis of a thorough understanding of the immediate water demand trends, the Waterworks Bureau has drawn up a financial plan for fiscal years 2007 to 2010 in order to streamline water service management while better meeting user needs.

This financial plan, reflecting the management policy of the Waterworks Bureau and the concrete action plan of the reform manifesto developed by the Director of the Waterworks Bureau, contains the following numeric goals.

• Financial Plan for Water Services (FY2007 to FY2010) (PDF 8KB) (Japanese only)
• Financial Plan for Industrial Water Services (FY2007 to FY2010) (PDF 8KB) (Japanese only)

2.Main goals of financial plan

(1) To reduce operation and maintenance cost (part of personnel and non-personnel costs) by more than 20% from the FY2005 budget within five years.

Operation and maintenance cost refers to part of personnel and non-personnel costs, excluding expenses that cannot be cut simply to ensure a certain level of customer service and for other external reasons. We will reduce the cost by 20% from 30.8 billion yen (exclusive of tax) in the FY2005 budget to 24.6 billion yen in FY2010. [Water services]

(2) To reduce staff by 400 persons or more (including temporary staff but excluding reemployed staff) by the end of FY2010 from the level of July 1, 2005.

We will reduce the number of employees by 400 persons or more, from 2,300 as of July 1, 2005 to 1,900 or fewer by the end of FY 2010, by imposing a freeze on new recruitment. [Water and industrial water services]

To reduce employees by more than 350 persons by April 2010, the target year of our personnel management program in the intensive reform plan.

(3) To reduce by more than 30% expenses for commissions paid to supervised organizations in the FY2007 budget, from the level of the FY2004 budget.

In line with the principle of “encouraging outsourcing to private organizations whenever possible, Ewe will promote cost reduction efforts in the Bureau’s two supervised organizations to the fullest extent and reduce by more than 30% the expenses for commission paid to them from the FY2004 budget of approx.3.8 billion yen. [Water and industrial water services]

(4) To reduce annual average expenses for new projects of facilities construction and enhancement (water purification facility and water pipe enhancement) by more than 25% from the currently planned level.

To effectively and efficiently develop and enhance water service facilities while better meeting user needs, starting from FY2007 we will reduce the annual average expenses for new construction and enhancement projects by more than 25% from the currently planned level of 26.7 billion yen (including tax). [Water services]

(5) To reduce outstanding balance of corporate bonds by 10% within 5 years.

To lessen dependence on loan funds, we will withhold issuance of new bonds and reduce the outstanding balance of corporate bonds by more than 10% from the 280.5 billion yen at the end of FY2005 (estimated as of January 2006) to less than 252.4 billion yen at the end of FY2010. [Water services]

(6) To increase the ratio of owned capital by 6% within five years.

By promoting management reform focusing on the above-mentioned five goals, we aim to increase surplus, reduce investment-related expenses and lessen dependence on loan funds, thereby strengthening our management base. Accordingly, the ratio of owned capital will be increased by 6% from the 36% estimated at the end of FY2005 to 42% at the end of FY2010. [Water services]

[Page Financial Plan for Water and Industrial Water Services (FY2007 to FY2010) under Management Information under Guide to Waterworks on the Osaka City Waterworks Bureau Website ends here.]