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As reported by The Sun-Herald, Sydney Water's leakage losses rose by one-seventh last year and the time it took to fix high-priority leaks doubled to more than four days.

The Auditor-General added another unflattering figure, with just over half of Sydney Water's maintenance for the year "unplanned", while for Hunter Water it was two-thirds.

The watchdog noted it was "more challenging" for water agencies to monitor underground assets, and that soil movement - presumably from the drought - triggered a "significant increase in breaks and leaks".

That said, the Auditor-General also noted the large share of unplanned work could also reflect a reactive response by the utilities because of a lack of reliable data for budgeting, some assets were "not operating adequately", and "there is a high proportion of assets with a low consequence of failure”.

'Privatisation risk'

A spokesman for Sydney Water said increased transfers to the government had "no bearing on customers’ bills, services or reliability".

It plans to spend about $2.5 billion on projects in the four years to 2020, two-thirds of which would go on renewals and upgrades. Typical annual household water bills had dropped an average of $100.

"Our asset maintenance approach uses an acceptable risk framework to achieve required service levels while remaining prudent," he said. "Operating and capital expenses are appropriately benchmarked."

But Justin Field, the Greens urban water spokesman, said the "huge profit increase" for Sydney Water had come at the expense of a big increase in leakage rates and a failure to adequately invest in water efficiency and recycling.

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"It looks more like the NSW government is fattening up the enterprise for privatisation rather than investing in a world-class water utility and preparing for the impacts of climate change on our water systems," he said.

The problem was not restricted to Sydney, with the report suggesting water assets were being neglected "across the state", Mr Field said.

Don Harwin, the NSW urban water minister, was also approached for comment.

Separately, two large recent rain events across eastern NSW have stalled the decline of water levels at Sydney's reservoirs.

As of Saturday, the dams were steady for the week at 61.3 per cent, remaining just over 1 percentage point above the 60 per cent level that would trigger the start of the Sydney Desalination Plant.