Optimisation and reliability assessment of water distribution networks are complicated processes. Most of the research focuses only on the pipes without considering other network components, such as tanks. Despite the benefits that the tanks may bring, they are usually omitted in the optimisation process or in reliability considerations. Various indices from the literature that describe network reliability are calculated exclusively based on pipe failure analyses for single demand scenario, without taking into consideration the volume of possibly existing balancing tanks. The research discussed in this paper aims to incorporate the demand balancing tanks to the optimisation process and also find out their influence on the total cost and reliability of the network. A tool called NORAT (Networks Optimisation and Reliability Assessment Tool) has been used, which determines the required balancing volume, optimises pipe diameters and tank elevations and finally calculates the total cost of supply. NORAT further assesses the hydraulic reliability of the network. The tool has been tested on a synthetic network by applying different combinations of topography, supply schemes and locations of water sources and tanks. The results prove the ability of NORAT to employ balancing tanks, both in optimisation and reliability assessment processes.