Sydney Water is looking to fund upgrades to ageing infrastructure and services for new housing developments.

The authority has proposed new pricing, submitted to the Independent Pricing and Regulatory Tribunal (IPART), that would see bills rise by 18 per cent in July 2025, followed by annual increases of 7 per cent through to 2029. 

For an average household, this would mean an immediate increase of $235, then yearly hikes of $123 until the decade’s end.

Sydney Water says much of the city’s water infrastructure dates back to the 1950s and urgently needs updates to avoid system failures. 

Engineers say much of the infrastructure is now beyond its intended lifespan.

A significant portion of the $16 billion to be raised through these increases will go towards servicing new housing developments. 

The New South Wales government expects over 170,000 new homes in Greater Sydney by 2029, with many developments located in ‘greenfield’ areas of north-west Sydney, south-west Sydney, Penrith, Western Sydney Airport, Parramatta, and parts of the Illawarra.

Some costs will be offset by developer contributions, with Sydney Water estimating that $3.9 billion will be provided to connect drinking water and sewer systems to new developments. 

Sydney Water’s existing wastewater facilities, including key plants at North Head, Malabar, and Bondi, are “reaching capacity” and will require new plants to handle demand from growth areas. 

There is also a push to diversify Sydney’s water sources. 

Currently, 80 per cent of Sydney’s drinking water comes from Warragamba Dam and the Prospect Water Filtration Plant, but new desalination and recycled water plants are planned to support rainfall-independent water sources.

These investments are considered essential to avoid outages and restrictions. 

Sydney Water’s proposal is now open for public submissions until December 9, with a hearing scheduled later this month.

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