Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I will start at the end, because it was the most recent question. We will support group water schemes. We met with the federation that represents those schemes. We had a good discussion and reassured it that we will return to the level of support for group water schemes before the introduction of the water conservation grant. The federation seemed happy with that.

Generally, the transfer of water assets from local authorities to Irish Water is happening over a phased period. Every now and again I, as Minister, sign off on a next phase of transfers. Clearly, Irish Water cannot take everything in one go, but as capacity builds we transfer the management of water assets from local authority management to Irish Water, which is the whole purpose of trying to switch to a single utility water model to try to create economies of scale, of knowledge, of capacity and so on. I see the group water schemes in that context. For that to happen for group water schemes, two thirds of those in a scheme have to sign up to it. It happens on the say-so of those involved in the group water schemes. A bit of democracy is involved to make sure this is happening with the support of the people affected.

We have not changed the landfill levy. It is €75 a tonne. If you look at how that compares to our closest neighbour, it is significantly less. Ireland does not charge a lot in comparison to other countries - certainly our closest neighbour - for landfill. Having said that, the landfill levy is designed to divert waste away from landfill and it is having the desired effect. That is a combination of people producing less waste, but also of some waste going abroad. Much of the diverted waste is recycled here, but yes, a lot is being shipped abroad for recovery in thermal treatment facilities. That reflects the fact that the economic downturn in recent years resulted in spare thermal treatment capacity in some EU countries. It also reflects the underprovision of thermal treatment capacity here in Ireland and significant pressure on space in landfill sites.

Waste is being transported from the west to Kildare for landfill.

We have pressures on available landfill capacity and we need to encourage more recycling, reuse, composting and waste minimisation. This was the thinking behind pay by weight, which we had hoped to introduce this summer but on which we have had to change tack in order to ease the transition in a way that households are more comfortable with. We should not see waste as simply material that needs to be sent to landfill but as a resource that can be recycled, reused and put to other uses as a fuel source and so on.

I will read a note on water to give members a sense of the numbers. There are big numbers changing as a consequence of the decision to suspend water charges.

Arising from the suspension of domestic water charges, Irish Water has estimated that it will require an additional funding requirement from the State in 2016 in the order of approximately €181 million. This level of funding is on the basis that there is no significant change in Irish Water's scale of operations and capital programme from that set out in its business plan. As savings in customer costs and domestic bad debt provisions are reflected in these estimates, it is proposed that the increased subvention amount of €181 million will, in part, be met by the conversion of the planned 2016 working capital amount of up to €58 million to subvention, which was factored in anyway. This will reduce the amount of additional subvention net of the working capital amount to €123 million. When account is taken of the savings from the suspension of the water conservation grant, for which €110 million was allocated in 2016, the cost of suspending domestic water charges is unlikely to exceed €20 million in cash flow terms in 2016.

A big chunk of this is being met by the €110 million now not going to the conservation grant but, instead, going into the local government fund to fund the water services that Irish Water is investing in and providing. The net cost of the decision will be less than €20 million, and may be considerably less. The figure will be worked out between now and the end of the year.

The transfer of environment functions from my Department to the Department of Communications, Energy and Natural Resources will happen before we break up for the summer. Climate change, air quality, waste management and the Environmental Protection Agency, EPA, are transferring over. There are parallels in the Department of Communications, Energy and Natural Resources with climate change and environmental issues, given the impact energy has on the overall emissions regulations. It is a reasonably good fit and will work well. We cannot factor in the changes in the Estimates until it formally happens. They will be factored in afterwards.

The urban waste water treatment directive sets out the requirements for the collection, treatment and discharge of wastewater in urban areas. In September 2013, the European Commission formally commenced infringement proceedings regarding non-compliance with requirements of the directive. Its letter in September 2015 outlines specific concerns in more than 70 areas, and the Commission does not view the list as exhaustive. A response issued in January 2016 and a follow-up meeting with the Commission took place on 25 February 2016. At this meeting, the Commission acknowledged that progress is being made and noted, in particular, the current national framework in which water services are being delivered. It also acknowledged that the significant funding allocation for investment in wastewater treatment, in the period to 2021 and beyond, would ensure compliance. The investment that is committed to between now and 2021 in this area is €2 billion of the €5.5 billion capital plan in the Irish Water business plan.

I am to meet the Commissioner next week. He is a very practical and sensible Commissioner and I have got to know him well through his role as Commissioner for the marine. I am meeting him primarily to explain why we are suspending water charges, how the process during the nine-month period will work regarding the work of the expert commission, the details of which we announced yesterday, and that feeding into an Oireachtas committee will produce recommendations on how Ireland should fund domestic water supply and domestic wastewater treatment. Let us see where the debate takes us. I will seek flexibility and accommodation from the Commission regarding what we are trying to do, which is to have an informed review and debate on where the financing of domestic water lies in Ireland so we can make a democratic decision in Parliament in nine months' time. I hope we will be facilitated to do this.

Deputy Alan Kelly has suggested this is illegal. I do not accept that and I am not sure where he is coming from. If Ireland decides to abolish water charges, there will be issues. Let us wait and see what our expert commission has to say about it regarding its judgements on our obligations under the Water Framework Directive. It does not serve a useful purpose to have the debate now, given that we have a group of experts who are there to make these assessments.

Approximately 850,000 water meters have been installed. We all know why some meters have not been installed. There has been community resistance in some areas. We should finish phase 1 of the metering programme which, in time, will be seen as value for money when meters are being usefully used in terms of understanding how we are using water, where leaks exist and the percentage of leaks that apply to localised infrastructure to people's homes.

Deputy Eamon Ryan put it well when he said we live in a world where we want data and understanding of we use natural resources. If we do not have meters, we do not know how we are using one of the most fundamental natural resources of all, namely, water. We do know nearly 50% of water leaks through pipes before it reaches its supposed destination. Although much of this happens on the main water infrastructure pipelines that do not go to people's houses, some of it happens in people's own infrastructure. The water metering programme is a good thing and in time it will be seen as a good thing. Some 40% of customers who are using water meters are paying below the cap because they understand what they are using. This is changing the mind-set on how water is used as a resource.

Proposals for potential savings on metering are included in the €5.5 billion for other investments. Along with the regulator, we will review phase 2 of metering in terms of how and when it proceeds. We do not have to do it now. The issue is finishing phase 1, which should and will proceed where practicable. That is happening.

The current phase 1 metering programme is due to end before the end of this year. It is virtually coming to an end as things stand. The revised target for that is between 870,000 and 880,000 homes, which is a very significant portion of the overall percentage of homes that would have meters. I am not aware of any country which has rolled out metering at the pace we have tried. If there is one fair criticism of what we have been trying to do around the whole water debate, it may that we have been trying to make too much to happen too quickly and expecting Irish Water to achieve it. That has put huge pressure on Irish Water and many households were not ready for the pace of change. That has raised a lot of political problems, concerns and frustrations which are genuinely held by many. Hopefully, the next nine months will allow us to address some of that frustration.