Mr. John Tierney:

I am referring to what is contained on the first page of that document.

The current delivery of water services is not fit for purpose on a consistent basis and continuing to deliver in this way will only result in a further deterioration in water and wastewater services. There are serious health, environmental and economic risks inherent in this model. The establishment of Irish Water as a national utility will secure improved water services by bringing a systematic approach to how we operate and manage services, centralising and standardising procurement and other activities to deliver major cost savings, adopting best project management practices to reduce the capital needed for projects, while accelerating their delivery within budget, delivering the largest metering programme for a water utility, and implementing a system of charging and collecting revenues from over 1.8 million customers. There are no quick fixes; it is going to take time, substantial investment and a long-term systematic and strategic approach. That is the only viable way to solve this problem for the country.

Local authority staff are critical to delivering services.

Continuity of supply to customers cannot be put at risk as we make the necessary changes. The Irish Water programme, as we debated the last day, has defined and built the processes, IT systems and capabilities to set it up as a modern utility. The delivery of the project is to best utility standards and the investment has delivered an asset that will serve the needs of the country into the future and will stand up to scrutiny in any objective international benchmarking process. We have tried to do three things, namely, to set out how Irish Water will tackle the problems in water services and what difference this will make to people; to set out the major plans in which Irish Water will be engaged during 2014 in order that the committee can understand what to expect from us; and to provide clarity on a few key issues which have arisen in recent weeks. However, it is important to remind ourselves of Government decisions taken on water sector reform, namely, to establish a new public water utility building on the proven capability of BGE; to establish independent economic regulation of the water sector, set tariffs and protect customers' interests by ensuring efficient delivery of services by the new utility; and to create a sustainable funding model to facilitate much needed investment in water services.

In 2014 we find ourselves with an abundant natural water resource but through under-investment and other factors, we have faced and are facing huge challenges in delivering water services. I point to a particular case. The European Commission has launched a pilot infringement case in regard to a number of plants. The potential cost of fines would be additional to the cost of the infrastructure required to address non-compliance. It is fair to say people involved in the service have been seriously concerned about the levels of investment. If this was allowed to continue, it would store up even greater problems for the future that would manifest across the country. Irish Water will take on this challenge by planning and investing wisely in improved national water infrastructure to meet present and future needs; implementing systems and processes that best manage this national water services infrastructure; and reducing costs by improving operational performance to the best levels of other utilities. We have set out the benefits of national utility managed water services.

I mention our approach to asset management. I will not go through all of it, but it is the area in which the committee will see a radical change in strategy and approach in asset management and capital delivery. Critical to this is central strategic planning, based on accurate asset performance data and full control of all investment decisions, both capital and operational. International benchmarks suggest efficiencies of up to 40% are achievable in capital investment alone from a combination of adopting the right choices and delivering them efficiently. The short to medium-term challenge will be to drive much higher levels of service from the existing asset base, but even with these higher levels of capital investment, a transformation of assets is a long-term project.

I have set out the priorities and related issues for Irish Water in taking over water and wastewater services. Drinking water quality is the first priority to protect consumers in terms of health risks, seeking to eliminate boil water notices and alleviating the problems of up to 50,000 people in areas where there are water restrictions. Immediately on becoming the responsible authority on 1 January Irish Water put in place a special team to assess the issues involved and progress the solutions. We point to the particular problems encountered in County Roscommon. We are trying to build on the work done there to date and bring forward the work as quickly as possible.

Drinking water capacity is the second priority. There is a series of measures in progress to ensure we stay ahead of demand. I mention the greater Dublin area where there are particular problems.

The third priority is wastewater treatment plants and compliance. Wastewater treatment plants servicing the majority of the population are currently non-compliant with the water framework directive. That is a significant challenge which will take a number of years to resolve. Irish Water's focus is on targeting those plants that will give the greatest environmental benefit in protecting waters as part of a credible plan that will allow us to meet EU requirements. We need a new focus on how to upgrade existing plants, wherever possible.

Our fourth priority is wastewater capacity. There is little point in addressing the problems with water supply in places such as the greater Dublin area if one does not address the issue of wastewater treatment capacity also. Our fifth priority is planned asset improvement schemes and development capacity schemes, as required.

I refer to major plans and developments. In the coming months one will see Irish Water undertaking a range of actions, about which we hope to keep the committee informed. In terms of capital investment, at this stage the projected capital funding available is €930 million for the three years 2014 to 2016. That figure needs to grow to an annual figure of €500 million to €600 million to meet urgent needs. Given all of the competing priorities, it is necessary to consider how to maximise output in the short-term, given the need to tackle water quality, water conservation and urgent pollution issues. Based on the asset management approach where we focus on obtaining the maximum benefit from existing assets and taking a critical look at the cost benefit balance on every scheme, we are confident that we will deliver efficiencies of at least 30% on the capital spend. An example is the Ringsend wastewater treatment plant where an alternative approach may be possible. On water conservation, Irish Water is targeting a capital spending figure of almost €200 million over three years as part of the capital investment plan.

We have to commence work on the Irish Water strategic plan for the 25 years to 2040. We will shortly open a broad public and stakeholder engagement on the high level objectives looking forward to 2040.

On interim price control from 2014 to 2016, in a few weeks Irish Water will make a submission on interim price control to the Commission for Energy Regulation. During the year we will start work on the first full regulatory cycle which runs from 2016 to 2021.

Irish Water formally took responsibility for water services six weeks ago. Our goal is to be a professional organisation which is responsible, expert, efficient and operated with integrity and the best interests of the customer at its core. To achieve this, we need to do a number of things. In response to the significant demand for information on Irish Water, we are committed to productively publishing on our website all relevant information on water services in Ireland. We will develop an integrated communications plan to inform and involve all citizens in understanding water services and engaging on managing water demand. Following on from today's briefing, we will be inviting all Members of the Oireachtas to meet management team members of Irish Water to be briefed in more detail on the points we have raised. We will put in place an information service for Oireachtas Members and council members to ensure their information requests are responded to in a timely manner. We will supply details of this service to all Oireachtas Members this week.

I refer to some of the items involved in regard to Irish Water and the local government partnership. We are transforming the water services sector, building from the current model and not replacing or duplicating it. Continuity of water services is the absolute priority. The optimum number of staff required to deliver services, after a managed transformation, will be determined by business needs, including, most importantly, public health, under the scrutiny of the regulator who will take full account of comparators with other similar utilities. There will be no allowance for surplus staff.

I mention some of the Irish Water programme in terms of the delivery of customer benefits and the high performance utility model and the system and structures put in place to drive high performance to ensure that over time we will have the organisation required to drive efficiencies and so on.

The Chairman has mentioned the metering programme which is a very ambitious one. More than 115,000 meters are in the ground and we are meeting the 27,000 meters per month installation target, which is an enormous achievement.

Reference was made recently to leaks. The metering project is uncovering leaks and provides the opportunity to deal with them in partnership with the local authorities.

Investment in water services infrastructure is a catalyst for achieving prosperity, health and sustainability. Every generation has tried to play its part within the resources available at the time and every subsequent generation has benefited from the efforts made.

Our water services are in need of serious transformation. We must learn from the delivery of services in the past century. We must finds new ways of managing the assets, delivering, developing and paying for our water services. Uisce Éireann has been given this task and will work with the local authorities and the people. We will do our utmost to meet the challenges. Through incremental progress in the next 15 years, we will deliver on our vision of building a high-quality water service. High-quality water will protect the health of our communities and the integrity of our environment and will be a driver of economic development. We want to ensure that people have a clean, safe and affordable water system.