May 2004

Consideration of How to Best Provide Industrial Water Service (Report by Exploratory Committee)

[Establishment of Committee]

In Osaka City, demand for industrial water has been consistently declining which is adversely affecting the financial soundness of the city’s industrial water service year by year. Such a situation gave rise to a pressing need to strengthen efforts to improve management efficiency and to reconsider the way of providing industrial water service from a mid- to long-term standpoint.

To discuss drastic solutions to these issues and newly formulate a service policy, an Exploratory Committee (chaired by Director of General Management Division) was established in November 2002, which issued the following service policy in May 2004.

[Service Policy]

Through internal deliberations, the Exploratory Committee has established the following service policy to indicate the direction that the industrial water service of Osaka City should follow in the future.

(Outline of the Service Policy)
The industrial water service of Osaka City is an important urban infrastructure and plays a role in preventing land subsidence. And we adhere to the basic principles of public enterprise management of ‘demonstrating entrepreneurship’ and ‘contributing to public welfare.’

In addition to promoting the three basic policies below we will work for improved management efficiency with the aim of eliminating a single-year-financial loss in seven or eight years and also continue to ensure a stable supply of industrial water.

• Review of water supply capacity
• Integration of facilities management of water supply and industrial water supply facilities
• Enhancement of efficiency of other operations

[Outline of Policy Measures]

1.Review of the water supply capacity

a) Downward revision of water service capacity

We will position Higashiyodogawa Purification Plant, which covers a wider service area of the former Osaka Coastal Industrial Waterworks Corporation Group, as the main industrial water purification plant of Osaka City, and will continue to provide the same level of maintenance and enhancement as in the past. On the other hand, we will apply more appropriate maintenance standards to Joto Purification Plant due to the decline in water demand in its service area.

b) Transfer of water rights

We will promote preparatory work for the release of excess water rights resulting from the downward revision of water service capacity to other business entities, and once an outline is determined, begin consultations with national government and other relevant organizations for further details.

2. Integration of facilities management of water supply and industrial water supply facilities

a) Review of the operation and management of Joto Purification Plant

The operation and management of Higashiyodogawa Purification Plant is integrated with that of Kunijima Purification Plant, which enables the provision of water supply and industrial water supply services in a more convenient, unified manner. By placing Joto Purification Plant under remote control of Higashiyodogawa Purification Plant, we will expand the coverage of integrated facility operation and management, thereby enhancing the efficiency of plant operation.

b) Reduction of personnel involved in the accounting section of industrial water service

As part of our efforts to integrate water supply service with industrial water supply service, we will review the allocation of personnel and will reduce personnel involved in the accounting section of industrial water service so as to better reflect actual needs.

3. Enhancement of efficiency in other operations

a) Cost reduction

• We will promote a reduction of public works costs
• We will enhance the operational efficiency of water facilities

b) Acquisition of public subsidies

c) Disclosure of management information

[Page Report on Study of How to Best Provide Industrial Water Service (summary) under Industrial Waterworks under For Customers on the Osaka City Waterworks Bureau Website ends here.]