Michael McCarthy (Cork South West, Labour)
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We will discuss the establishment and future governance of Uisce Éireann with representatives from Bord Gáis Networks. Is that agreed? Agreed. I welcome Mr. John Mullins, chief executive officer, Mr. Michael O'Sullivan, group finance director, Mr. Ger Cowhig, programme manager, Irish Water programme, and Mr. Paul O'Donoghue, Irish Water programme, on behalf of Bord Gáis Networks. Thank you for your attendance, gentlemen. I draw your attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if you are directed by the committee to cease giving evidence in respect of a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise nor make charges against any person, persons or entity by name or in such as way as to make him, her or it identifiable. The opening statement and any other documents that you have submitted will be published on the committee website after this meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

The launch of Uisce Éireann is a big step in terms of Irish public administration. I congratulate Bord Gáis Éireann on having assumed responsibility for the task that lies ahead. We are moving to a new era in which, for the first time, Irish citizens will be asked to pay for water. It is a necessary step for environmental and economic reasons. Nevertheless, it is a lot to ask. If we are to ask the people to accept this we must ensure that the service we provide in terms of delivery and quality of product is second to none. I am keen to hear how the objective will be achieved and for the witnesses to address several specific areas in their presentations. One of the most important among these is the issue of metering and, in particular, where the meters are to be placed. All current indications are that the meters will be placed outside the properties of private owners, and many reasons have been given for this. The two main reasons I have heard relate to the difficulty of getting an owner's permission to enter a property and the need to make the owner responsible for the maintenance of piping on his or her private property. The first reason is insurmountable. All ESB meters are placed on the sides of houses, which are the property of the owners. Let us leave aside the second reason for the moment. I will focus on the cost of putting the meters in the ground. Approximately 1.25 million meters will have to be installed in the coming years. If each of these is to be put into the concrete pavement or if concrete must be broken through in each case, it will increase the cost significantly and add to the environmental damage. In many cases the only option may be to put the meter through a concrete base, but it need not always be necessary.

Many houses - for example, most houses in housing estates - have front gardens and there are cases in which it might be just as easy to enter through an earth boundary or surface as opposed to a concrete surface. This will still leave the property owner responsible for the piping but, nonetheless, one should look at the cost of that option in terms not only of economics but of environmental benefits. Bord Gáis Éireann is looking at the issues of resources and costs. The production and the use of many of those products is not environmentally friendly and there is a strong economic case for that. What is required is an element of imagination or creativity, and coming to this with a fresh approach. To say that something has never been done previously is not necessarily a good reason for not doing it. We can take the lead here, given the large scale of the reform that is taking place. I want Mr. Mullins to address that particular issue.

The other point is who is responsible for the piping on an owner's private property. I ask that the thought process in this regard be elaborated on. For example, are private property owners responsible for the electricity wires or the gas connections into their homes, and are they charged when these need to be repaired? There are many genuine issues in that regard in terms of what could happen and the responsibility for rectifying a situation. If we are now handing over responsibility to home owners, are we going to ensure pipe work is handed over in good condition so that a new owner does not discover, six months down the line, that he or she must contend with fixing something broken for which they never had responsibility? In terms of buy-in, it is important that the consumer is assured in that regard. I ask Mr. Mulllins to touch on those two areas in his overall presentation.

Mr. John Mullins:

Tá mé an-bhuíoch díobh go léir as an cuireadh teacht anseo inniu chun díospóireacht a bheith againn ar bhunú Uisce Éireann. If the Chairman does not mind, I will deal with the points he raised at the end and read our presentation with the assistance of my colleague, Mr. Michael O'Sullivan, Bord Gáis Éireann's chief financial officer.

On behalf of Bord Gáis Éireann, I thank the committee for the opportunity to address it today on progress concerning the establishment of the new public utility for the provision of public water and waste water services for the people of Ireland. My colleagues and I will seek to update the committee on the developments that have occurred to date, those that are about to get under way and those that will be rolled out to the conclusion of the Irish Water programme. Of course, we will be happy to respond to the comments and questions of the committee, and we will value the input and advice of the committee members as we proceed through the implementation of the programme.

In April, the Government announced a radical reform of how public water services are delivered in this country. There are three key elements to this reform: first, the creation of a new public water utility, Irish Water, which will take over responsibility for delivering public water and waste water services from local authorities; second, the appointment of a new economic regulator for the public water sector - this responsibility has been assigned to the Commission for Energy Regulation, which will be responsible for determining the cost of water services to the consumer and for ensuring that planned efficiencies are delivered; and third, the introduction of a new funding regime based on domestic water charges and the new utility's ability to raise capital on international markets so that in the future Irish Water will be financially self-sustaining. These measures represent one of the most ambitious reform programmes undertaken in the history of the State.

In Ireland water is an abundant natural resource, but it needs to be treated and transported efficiently. We face a challenge to ensure our water infrastructure has the capacity to meet the future demands of a growing population and to enhance our national competitiveness. We must support economic recovery by delivering a water system that will meet the needs of all industrial, commercial and domestic users. At present, that capacity is simply not there. Such a system can only be achieved by increasing the level of investment in our infrastructure, by introducing operational efficiencies into its management and by taking a national strategic approach to planning and investment.

This committee's report into water services in June last outlined many of the constraints in the current system. In summary, the current model of provision is reliant on the State for nearly 90% of its funding. That is simply not sustainable. The lack of access to alternative sources of funding has given rise to significant under-investment in the system, which has led to inefficiencies such as unacceptable and costly leakage rates, high operating costs per connection and severe difficulty in dealing with extreme weather events such as those we have experienced in recent winters. Despite these challenges, it is widely acknowledged that the local authorities have done a proficient job in providing water services to the community.

However, we are at a turning point. The Government has determined that reform is an absolute necessity in order to introduce new sources of funding into the system so that Ireland has a world-class water system for the future. It has given us a mandate to create a new public water utility, while working closely with the Department of the Environment, Community and Local Government, the Commission for Energy Regulation and the local authorities. Once Irish Water has been established, it will operate as a subsidiary company within the Bord Gáis Éireann group. The scale and complexity of the task is immense, but it is achievable. It is a role that we as a company sought, and it is one to which we will apply all our energies in order to succeed. The Government's decision to establish Irish Water within Bord Gáis was made in order to enable the new water utility to have access to the very best skills, experience and capabilities within the utility sector in Ireland. Bord Gáis is a highly successful and performing semi-State utility. Our experience of managing a national network and of operating in a regulated environment, our track record in raising finance and our experience of providing customer service will all be deployed to assist in the successful establishment and operation of Irish Water. In order to create a water utility that builds on the strengths of the existing system, Bord Gáis is committed to working closely with water experts from the local authorities to ensure that their considerable experience, knowledge and dedication to service provide the foundation for Irish Water.

Committee members will be aware that there is concern about how these reforms will affect local authority staff. The Department of the Environment, Community and Local Government, which remains responsible for overall policy and legislation for the sector, in association with local authority management and trade unions representing staff in the local authorities, has established a consultative group which will act as a forum for engagement on all industrial relations issues. The consultative group is chaired by Mr. Kevin Foley of the Labour Relations Commission, and Bord Gáis is also represented on the body. It is envisaged that service level agreements will be developed between Irish Water and the local authorities and that these arrangements will endure to 2017 and, if necessary, beyond.

It is expected that it will take approximately five years for Irish Water to be established. There are several important milestones in the creation of the utility. The Government will introduce legislation in late 2012 to give Bord Gáis/Irish Water an interim legal basis in order to enable it carry out water-related activities, and this will be followed by comprehensive primary legislation in 2013 to give full powers to Irish Water. Irish Water is about to commence the water metering programme. Domestic billing will commence from 2014, as outlined in the EU-IMF-ECB agreement. We will take responsibility for capital planning during 2014. From 2014, Irish Water will enter into service level agreements with the local authorities, which will act as agents of the water utility in their respective geographical areas. By 2015, Irish Water will have taken responsibility for all aspects of the provision of public water services in the country and, subject to a sustainable regulatory model, is expected to be in a position to commence fund-raising on the international capital markets for investment purposes. By the end of 2017, it is envisaged that the utility will have achieved its end state in terms of its organisation and operations.

Mr. Michael G. O'Sullivan:

Developing the appropriate funding model for Irish Water is a critical task in ensuring that the new utility has the capability to perform all its functions and to deliver high-quality public water services in the future. Work on devising the model is under way and will take a number of months to complete. There are a number of stakeholders that have an important role to play in this process, including Bord Gáis, the Department of the Environment, Community and Local Government, NewERA, the Department of Public Expenditure and Reform, the Commission for Energy Regulation and the Department of Communications, Energy and Natural Resources.

The independent assessment of Irish Water commissioned by the Government indicated that the utility could, over time, be financially self-sustaining, although it is expected that the Exchequer will continue to provide funding for an interim period. This will be complemented by the introduction of domestic water charges from 2014, by the amalgamation of existing non-domestic charges in 2015 and by fund-raising on the markets from 2016 to support investment needs.

The Government has decided that domestic water charges will be based on usage and that a national metering programme will be introduced to support that. The Commission for Energy Regulation will be responsible for devising the regulatory framework that will determine the level of domestic charges. This process is due to commence shortly and we anticipate that the commission will hold an extensive public consultation on domestic water charges in the middle of 2013.

The metering programme is a major undertaking. At this stage it is anticipated that 1.05 million residences will have meters fitted to the public water supply point connecting with their properties. Significant preparatory work must be undertaken in advance of the commencement of meter installations, such as allowing time for local authorities to conclude their surveys, which will inform the location of the meters; the appointment of local and regional contractors to undertake the installations; and the procurement of boundary boxes and meters. Installation of boundary boxes and meters will commence next year.

The regulator will determine the charging approach for customers who do not have a meter when domestic billing starts. Based on experiences in other countries, it is possible to structure these charges so that they are aligned to equivalent metered charges. It is important to reiterate that billing will not commence before 2014, and there will be no up-front costs.

Bord Gáis will be ready to commence domestic billing from 2014. However, as the committee will be aware, there are a number of outstanding policy decisions that will be finalised in the coming months, including a final decision on billing day one for domestic customers; the level and structure of the free allowance andmeasures to address the needs of those with affordability issues or medical needs requiring a high essential use of water; the disconnections policy, although it is understood that domestic disconnections will be disallowed; and a final decision on who is responsible for the bill, namely, the tenant or the landlord in the case of tenanted properties.

These are public policy matters and I have no doubt that the joint committee will continue to play a positive and constructive role in the debate on the issues. I will hand over to our chief executive officer, Mr. John Mullins.

Mr. John Mullins:

We do not underestimate the scale of the task we have been set. Reform of the water sector is an important national priority and we are committed to delivering what has been asked of us in an effective, collaborative and expert manner. Irish Water will operate to the very best standards. It will be an efficient and well-run organisation that has, at its very core, an impeccable commitment to serving the needs of the citizens of this country. Our vision for Irish Water is that it will deliver sustainable, high-quality and efficient public water and waste water services for the benefit of all our community.

The citizens of Ireland will undoubtedly expect that water services will improve once they start paying for them directly. Irish Water cannot be successful unless it meets this expectation. To serve the public successfully we must do the following: improve the quality, resilience and capacity of the water system and water services; enhance national water infrastructure through increased investment; reduce leakage rates; deliver efficiencies in water services through the use of new technologies that are used in other utilities elsewhere and here; use the experience and expertise of the local authorities and other bodies, in addition to our own unique Bord Gáis utility experience; utilise Bord Gáis's successful international financing capabilities; and engage with the public to set out and explain the objectives and the benefits of reform.

We are fully aware of the challenges we face and that the active support of public representatives such as the committee members, as well as a wide variety of stakeholders, is crucial to success. We guarantee that we will be open and transparent in the way we are going about the job we have to do and that we will listen and respond to the issues and concerns that are put before us.

After the Government announcement in April, Bord Gáis immediately initiated a three-month mobilisation phase to develop a comprehensive implementation plancovering five years on every single aspect of this ambitious reform programme. This involved working in close co-operation with the Department of the Environment, Community and Local Government. There are a number of important milestones in the next three months of which I would like to advise the committee.

By the end of the year, local authorities will commence surveying of their water assets to gather information to support the roll-out of water meters - that is, pinpointing the location of those water meters. The procurement process for the metering programme will begin this month. There are four distinct elements to that. We will appoint a panel of 150 to 200 local contractors - I emphasise "local" - to install boundary boxes and meters. We would expect construction and plumbing contractors to be interested in this work. We will then appoint a panel of larger management contractors to operate on a regional basis. They will be responsible for managing the workflows to local contractors and overseeing the quality of the installation on a regional basis. Between the local and regional contractors and the support programme, we expect to create up to 2,000 much-needed jobs arising from the metering programme, particularly in the area of construction. We will also purchase more than 1 million boundary boxes and meters. As members would expect, that will be a significant international tender. We are also currently putting together a panel of subject matter experts in various fields. In total, we will create ten panels that will be in place for three years. The experts on this panel will be called on to provide specific services to complement our existing in-house expertise and expertise available from the Department and the local authorities.

The advantage of taking this approach is that it allows small and medium-sized business to tender for services that would otherwise be too large for them to provide. We expect to appoint upwards of 100 small and medium enterprises to these panels, creating opportunities for Irish business to be involved in Irish Water and also ensuring that the new utility has access to the best business resources in Ireland.

In the early months of 2013, Irish Water will appoint a call centre provider to manage and operate the Irish Water customer care centre for the new utility. That will create 400 new roles, which will be based in Ireland. By May 2013, 100 of these roles will be in place, with the remainder coming on line when domestic billing commences.

We are also about to begin the recruitment process for Irish Water itself. In November, we will begin recruiting for a managing director and heads of human resources, customer operations, assets, finance and regulation. This will be an open recruitment process and will be widely advertised. We expect to make these appointments in the spring of 2013 and at that point we will begin recruiting for the wider organisation.

I sincerely hope our presentation has conveyed the scale and ambition of what we are trying to achieve. This committee made a valuable contribution to the water reform debate in June with the publication of its report on water provision. Included in that report were a number of recommendations on the implementation plan, from 1.1 to 1.20, which I discussed with the previous Chairman, Deputy Ciarán Lynch, before he moved on to another committee. We have taken those points into account. One of the recommendations was for Irish Water to stay in public ownership. The Government has made clear that this is its intention and no communication otherwise has been provided to us. The committee expressed concern about the lack of information on water assets and liabilities within the local authorities. We will shortly commence a comprehensive due diligence programme that will run until the end of 2013 and one of the objectives of this exercise is to set out a valuation of our national water assets and document the actual costs of providing public water and waste services, probably for the first time in the history of the State. The committee called on the new utility to have a strong brand presence to raise customer awareness of the need to pay for water services. One of the most critical tasks facing Irish Water is the need to win public acceptance, and we have comprehensive plans in place to do this on a regional and national basis. The committee also called for all funds generated from metering to be invested in maintaining and improving the administration of an efficient and high-quality water service. That is and must be a key principle upon which Irish Water will operate. Finally, the committee called for clarification of Irish Water's borrowing capacity. That is something that will be determined as part of the funding model. Clearly, that will be determined by the economic regulator.

Bord Gáis is now ready to deliver one of the largest reform projects in the history of this State. The project has real momentum and is being resourced appropriately, not just in human terms but in terms of IT systems, which are vast and complex. We are now entering an action phase where, as outlined, there are various activities of significant scale taking place. We recognise in particular that communication with members of the public - who will, after all, become Irish Water customers for the first time - is a key element of the utility's success. In this regard, we will deploy a comprehensive communications and public engagement plan which has public information regarding our plans at its core.

That is the end of the formal presentation. If the Chairman does not mind, I might pick up on a number of his points. I take the Chairman's point about new technologies. As a gas utility, Bord Gáis has been trying various forms of smart meter, as has the ESB. In the context of our metering programme, we are conscious that the placement of meters is an extremely sensitive matter.

Access to meters is vital and, for this reason, the meters will be accessible on an automated read basis. The tender will be based on state-of-the-art technology.

From our experience of running an electricity and gas company, one third of customer interactions are on the basis of estimated bills. The beauty of having external boundary boxes is that the issue of accessing premises disappears because we would have open access to all meters at all times to report an accurate bill reading. If we are going to get acceptance of Irish Water, we must ensure we are as accurate as possible.

I am aware of the technologies to which members referred. Calibration and sensitivity issues arise and, speaking as an engineer as well as a chief executive, I am not in the business of investing the nation's money in unproven technologies or billing systems. I would prefer to use proven systems that meet international standards, including on boundary boxes and available meters. We are particularly concerned about the possibility of issuing estimated bills to new customers of Irish Water if we are unable to access the meter infrastructure.

We do not know the quality of pipes in gardens and front or back drives. We have no sense of where leaks are located. By introducing meters we will for the first time understand technically whether, for example, house No. 5 on a particular road has a bigger leakage problem than No. 6. The introduction of meters will give us the capacity to determine whether significant issues arise between the stopcock connecting the mains and the water inlet. That will be beneficial from an engineering point of view.

In regard to handing over assets in a fit state, these are matters for the local authorities until the assets are transferred to Irish Water. I am sure we will encounter various interesting issues when we investigate specific locations. We could, for example, find asbestos or pipes that are not buried deep enough or sitting on electrical cabling. We may also discover significant leakage in the culverts entering homes. In that case we will ask our contractors to do as much as possible on the open area but once leakage detection is in place extraordinarily high meter readings would suggest problems between that point and the water inlet. These will be recorded and reported to the local authority and we hope they will be addressed as part of the mains rehabilitation programme. It has been suggested in the committee's own report that the issue could be addressed by means of some form of grant support for reparations between the stopcock point and the water inlet. That has great merit and should be considered but where extraordinary leaks are found it is in the best interest of householders and Irish Water to stop them because every litre of water wasted creates costs in chemicals and pumping. In 2009 Coffey Construction conducted a study which indicated that if water leakage in Galway city was reduced to international norms, €600,000 per annum could be saved in pumping costs alone. Leakage rates nationally are 41%. This represents a significant expenditure in treatment chemicals and energy. As engineers, we have to fix these issues but they will require significant investment.

I previously worked with West of Scotland Water Authority and Yorkshire Water as a consultant. These companies had to invest 15 years worth of capital with the support of the regulator to reduce leakage rates from between 40% and 50% to 20%. These are significant issues. Every litre of water leaking into a private garden or a street is an expense we want to eliminate.

Michael McCarthy (Cork South West, Labour)
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If a contractor discovers a leak in the public water supply to the house, who pays to fix it?

Mr. John Mullins:

I understand that the local authority is currently responsible for delivery of water to the point of the inlet. The stopcock is located at the entrance to the property and, as such, is effectively the dividing point. That is not the case in all properties, however. In respect of electricity and gas, everything that is downstream of the gas and electricity meter is the property of the house owner. Clearly transitional issues arise in regard to property rights and ownership of sections of pipes between boundary point and inlet where they are located on private property.

Michael McCarthy (Cork South West, Labour)
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In the case of the ESB, the meter is in the house or abutting the residence. If an issue arises in respect of water supply to a house and the meter is at a point beyond the leak, the cost of the leaking water logically falls to the householder.

Mr. John Mullins:

Absolutely. The Commission for Energy Regulation will have to take account of acceptable leakage levels in its economic assessments. One can correct for an acceptable level of leakage between the stopcock and the entry point in applying the charge to households. However, elements of the committee's report are worthy of consideration. If one wants to cut down on energy usage, which in itself is a form of leakage, one can apply for grants for insulation and other works. There are similarities between the energy business and the particular issues that the committee highlights.

Michael McCarthy (Cork South West, Labour)
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I urge members to ask questions. We do not have the luxury of time for Second Stage speeches.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank Mr. Mullins and his colleagues for the presentation. This is our first opportunity to discuss in detail the proposed establishment of Irish Water under the auspices of Bord Gáis and, as such, it allows us to clarify certain outstanding issues. My first question concerns the ownership of Irish Water by the Irish public and taxpayer forever and a day, despite the fact that Bord Gáis is included in the NewERA programme on the sale of State assets. My second point is that today should offer an opportunity to clarify the costs of metering and the costs of water by presenting exact scientific information.

The third point relates to local authority staff and the expertise that has existed in local authorities for many years, which has served the country well. What can the witnesses do or say to ensure the future of those staff within local authorities?

Bord Gáis is due to be partially privatised under the NewERA programme. In justifying his selection of Bord Gáis Éireann over Bord na Móna to operate Irish Water, the Minister gave as some of the key reasons its track record in customer service and its capacity to leverage private sector funding in the future. A couple of weeks ago, the Minister said Bord Gáis Éireann had specific skills gained from its experience of transformation, customer relations, network management, metering and utility operation that can be quickly deployed to assist in the successful establishment and operation of Irish Water. That being the case and with the privatisation of Bord Gáis Éireann, can Mr. Mullins say what impact the loss of key assets and capabilities has on the ability to undertake the establishment of Irish Water?

Both Mr. Mullins and the Minister mentioned that the potential for private sector finance was also a key part of the selection process. The Minister said we must find the money elsewhere and that the private sector had some interest in becoming involved and being part of the public utility company they had agreed to establish. Given the comments on leveraging private sector involvement and the decision to move Irish Water into a body that is earmarked for privatisation, is that simply moving towards a system whereby Irish Water can be sold off in the future when it is up and running? This fear is common among many people in rural and less populated areas. They see themselves at the outer edge of profit making potential because most connections are made in urban areas.

There are contradictory messages being given out as to how much water metering will cost and how much of that cost will be passed on to households. The Taoiseach said in the past the cost would not be passed on to households, a Department official has said it would and the Tánaiste has said that no decision has yet been made on it. After what has been a long debate, the public is entitled to be made aware of what the costs will be. Take for example counties such as Offaly, Westmeath and Laois, where, currently, the cost of maintaining water services and facilities, based on EU directives and regulations, is in the region of €12 million per annum. There are approximately 20,000 houses in each of these counties, indicating a cost per household of €600 to maintain water supply. This does not take into consideration the cost of water metering, the dual charge for the provision of water or the proposed household property tax. These charges are now moving towards €1,500 per annum. If nothing else, this meeting offers the witnesses the opportunity to kill that myth.

Was the capacity to roll out metering by 2014 a key component of the bid by Bord Gáis Éireann for Irish Water? How much will water metering cost per household? It appears the reason the cost cannot be published is that the internal report has not been published. When will that be published? Will households bear the cost? Will local authorities, which have already funded water metering in many areas, be compensated for the initiative they took on the understanding they would be charged with custody of our water system? Fianna Fáil supports keeping custody of our water system within the local authority structure, perhaps on a regional basis rather than on a county basis.

Has Bord Gáis Éireann taken on board the prospect that according to the latest census figures, not the 2006 figures used by PwC in the report, over 500,000 homes will not be suitable for metering? The original figure indicated in the report was 300,000. The most recent census indicates the figure is far in excess of that. With regard to the 60,000 holiday homes and vacant units throughout the country, what is envisaged for these homes? Will these homes be metered and at what cost and expense? Is it necessary to meter these or should there be a flat charge on them?

The employment status of workers currently employed in the water section of local authorities is unclear. The PwC report suggests there will be job losses on the creation of Irish Water. The consultant's report states the number of people employed in Irish Water will be significantly lower than the 4,278 employed today. However, the Taoiseach has denied during Leaders' Questions there is any ongoing confusion on this and other issues. Mr Mullins mentioned also that Bord Gáis Éireann will enter into service agreements with local authorities for the establishment, setting up and commissioning of Irish Water, up to the year 2017. Can he give us any indication of what will happen thereafter? What is the remit of the group that has been set up? Is it its remit only to enter into service agreements up to 2017? If not beyond that, why not?

I may have some more questions to put, depending on the responses. I thank the group for coming. This discussion offers an opportunity to clarify these three main issues.

Michael McCarthy (Cork South West, Labour)
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Before we go any further, I will take the contributions of spokespersons from Sinn Féin, Fine Gael and the Labour Party after Mr. Mullins has responded to Deputy Cowen. Following that, we will group questions. We have already spent ten minutes on the first batch of questions and will run out of time otherwise. If people go on with Second Stage speeches, others will not get the opportunity to contribute. When we get to the grouped questions, it will be questions only.

Mr. John Mullins:

In respect of the ownership of Irish Water, it is a subsidiary company, and in any engagement we have had, there has never been any discussion of water assets being available for privatisation, either partially or fully. The network assets of Bord Gáis Éireann throughout the country are not for privatisation. Effectively, Bord Gáis group will end up being an infrastructure and retail Irish water company with a gas networks business. Clearly there will be shared services that are appropriate to both in terms of efficiency, provision of IT systems and other support systems. It is not envisaged that Irish Water or any of its assets will be sold by the State. I am thinking here in terms of pylons, pipelines and water pipelines. This policy is very clear and there is universal agreement across all parties on that.

With regard to resources, Bord Gáis Energy is being sold. The billing system we use in Bord Gáis Energy is already being adapted for Irish Water and the design for the Irish Water billing system is in progress. The billing system will be ready by 1 January 2014 and we have already seconded resources from our energy retail business into Irish Water, transferring those who are proficient in the establishment of billing and customer service. Therefore, this expertise will not be lost with the privatisation. We have had to backfill some positions to replace those people, which means more employment within Bord Gáis for people from other customer service and billing organisations. This is already happening. We put forward the view that we would leverage and clearly we have already started that process. I can therefore assure the committee that we will have the billing system up and running by 1 January 2014.

With regard to our work and asset management system, we do not use paper-based job cards. All of the metering roll-out in this country will be done digitally and in a smart fashion.

All contractors will be trained in how to use hand-held devices. They will get their job cards and schedule their work which they will complete digitally. They will use a centralised work and asset management system to send the information to a central base. The system in question is a Bord Gáis system which we are adapting for water use. At any point in time the utilities would certainly question the change from a legacy system to these two significant systems. They will mean that we will operate on an efficient basis from the word go. These resources in terms of leverage are not being lost in any way. We are making sure that will happen in advance of the process of selling Bord Gáis Energy, which is an issue for 2013 and 2014. Our business is organised into an Irish Water division, an energy division and a networks division. We are moving towards a situation where we will fundamentally have a shared infrastructure company that will devote centralised systems and processes to water use and the gas network business.

I wish to respond to what has been said about the cost of metering and charges. Various numbers have been bandied about when estimates have been of the cost of metering. Our guesstimate is that the cost will be approximately €450 million. We hope to be able to reduce that number on a tendered basis in the current climate. It is clear that there will be no upfront costs for any customer as a result of the introduction of water meters. These costs will not be borne by local authorities either. We are in conversations with the National Pensions Reserve Fund about the facilities needed to attract seed investment in these meters. Our chief financial officer is discussing the commercial arrangements with the National Pensions Reserve Fund. When these arrangements are in place, we hope to come back to the committee to give it more detail on them. We will come back with a specific number for the cost of metering when we have gone through the full tender process involving boundary boxes, contractors, meters and data requirements.

I wish to speak about tariffs. This is unique. We are migrating from a system that is based in local authorities to an economic regulatory system that will take some time to be financially independent in its own right. We are talking about a significant level of assets. Some valuations are set out in the committee's documentation and the report published in June. The asset base of the new entity will be bigger than that of any other State entity. That is exactly what is being created. We are talking about assets worth between €11 billion and €19 billion. Clearly, the manner in which that will be economically regulated will be a matter for the Commission for Energy Regulation. We will see a progressive reduction of the Exchequer commitment. In effect, the domestic, industrial and commercial charges already in place will give Irish Water the financial wherewithal it needs to move forward. There will be significant Exchequer investment in Irish Water for many years to come. It is not the objective of the Government or Irish Water to put the total loading of cost on the country's domestic customers. It is clear that the hybrid model to be used will be similar to the Network Rail regulatory model in Britain, of which I have some experience from my time in that country. Essentially, the Government will be involved in and make contributions towards the capital programme. Operating costs of €600 per customer have been cited in the cases of some counties mentioned. Nobody is suggesting all of these costs will be borne by domestic customers. Certainly, €600 would be way above any expected tariff applied in any jurisdiction within the OECD. There is an issue regarding the consultation process that will be needed to move towards an economic tariff that - most importantly - will be acceptable in the current economic climate.

I wish to respond to what has been said about local authority workers. I have made it clear that we want to put programmes and service level agreements in place up to 2017 and it is clear they will be adjusted over time. We need to appreciate that the operation and maintenance of the country's patchwork quilt of assets involve local authority and private sector workers. There are many examples of privately tendered projects across the country, including the Dublin Bay wastewater treatment works in Deputy Kevin Humphreys's constituency. Clearly, these assets and contracts will have to be honoured by Irish Water. I assure the committee that there is no expectation that Irish Water will impose compulsory redundancies in the local authority sector. The objective of the consultative group led by Mr. Kevin Foley is to ensure we will have change management. We have experience of this in our own company because we have had to do it progressively during the years, for example, in the cases of Dublin Gas and Cork Gas, etc. We will have to do it over a period of time in agreement with the local authority workers on an industrial relations basis. I assure Deputy Barry Cowen that we would like to second to Irish Water local authority staff who have specific engineering and technical expertise and knowledge of the assets on a national or regional level. We must respect the fact that capable people are working in the local authorities and adding value to those services on a regular basis.

I ask my colleague, Mr. O'Sullivan, to comment on the issue of financing.

Mr. Michael G. O'Sullivan:

One of the objectives of the establishment of Irish Water is to ensure ultimately it will be on a self-financing footing. Under the structure currently in place, the funding comes from the central Exchequer to a large degree. A contribution is also being made by the business customer community. We expect that the funding mix will change on a phased basis over a period of time. The introduction of domestic water charges in 2014 will be part of the change in the funding mix. As I said in our presentation, we expect Irish Water to be in a position to go to the market and raise funding independently some time around 2015. Mr. Mullins alluded to our belief that the central Exchequer would continue to have to provide funding to support the Irish Water model for a relatively significant period before the entity could be self-financing in terms of its ability to fund its operating expenditure and capital expenditure needs. We think that will probably happen in 2017 or 2018. The migration of the funding mix will be an evolving process. The experience of Bord Gáis in raising funding from a diverse range of funding sources on the international capital markets for its current energy and networks business was one of the key reasons Irish Water was awarded to Bord Gáis. Another reason was the ability of Bord Gáis to interact with, engage with and manage credit rating agencies which comprise a vitally important ingredient of this process.

As I said, a number of things have to be in place before we can access the international capital markets. I mentioned that we would like to be able to do this by 2014. We certainly need a regulatory structure. Therefore, the Commission for Energy Regulation will have a critical role to play in bringing about regulatory certainty and predictability. If we are to bring a degree of certainty and predictability to revenue flows and thereby attract investors, we will need to have a track record of customer collection activity. As I said, we will need to establish a credit rating for the water entity. In addition, the entity will have to develop an asset base at which investors can look. All of these facets need to be in place before Irish Water has the ability to access the funding markets independently.

The earliest we see that happening would be in or around the 2015 time period and then probably around the 2017 or 2018 time period plus, we would potentially be getting into a situation that this entity would be self-financing in its own right. Certainly, in the transitional phase from where we are today to that particular end point, we expect that the Exchequer will continue to have to provide funding to Uisce Éireann but obviously on a reduced basis from the levels that are provided today.

Mr. John Mullins:

I shall give an example of where EIB financing would be important. We have significant experience of EIB financing. Deputy McLellan is aware of the Whitegate power plant which was built in her constituency. A total of 50% of the financing for it was provided by the EIB. Our wind farms, which are now being built in six different locations across the country are also now partially financed by the EIB. We would view the national leakage programme as a capital programme that would qualify for EIB financing and we would hope to put that forward for European funding at appropriate rates. We have experience of dealing with the European Investment Bank. We are doing it as we speak in terms of drawing down loans for wind farms.

To return to the 500,000 homes that were mentioned, frankly, we have not seen empirical evidence in any shape or form that can confirm the number of homes that could be metered. At the end of a survey process we will be able to provide numbers. We will store the information on a geo-directory database. We will be able to provide a database of what we can do and what we cannot do. In terms of dispatching the metering arrangements we will have to ensure the contractor can do its work. We are drawing up specifications for the work and we will know exactly which homes will qualify for meters. We will come back to the committee on that at an appropriate time.

On holiday homes, if a home is used a lot in the summer time-----

Barry Cowen (Laois-Offaly, Fianna Fail)
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There are many vacant homes.

Mr. John Mullins:

Yes, there are many vacant homes as well but they may be filled in the future. The supply of water is in the same context as houses having gas and electricity available. We are aware from the gas business that we have had to supply many homes across the country that are vacant but we have invested in them. If one looks at the population growth, they will be filled at some stage. I accept that is not the case in all locations but one can expect over time with population growth that vacant houses in urban areas will in the main be filled. We will have to survey vacant homes and ensure appropriate infrastructure is in place in order to be fair to whoever occupies the home so that he or she is able to get fair treatment in terms of the meter charge.

Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Bord Gáis Éireann for the presentation. We received more information but some questions arise. It was said that according to estimates the cost of metering would be €450 million and that slightly more than 1 million households require to be metered. A total of 480,000 houses have septic tanks, many of which have a mains water supply. The water is supplied by the council in cases where group water schemes were taken over. I suspect the figure could be much higher. I would like a response to the question. I have seen various figures bandied about on costs. Reference was made to the expertise of professional staff in local government. They suggested the cost would be €1.2 billion. The Irish Academy of Engineers proposed a figure of €600 million.

The other critical point on meters is the timeframe for their roll-out. Reference was made to working for Yorkshire Water and Scottish water. The witnesses will be aware that in the south of England in particular some domestic dwellings have still not been metered 12 and 15 years on. One could ask how long it will take to roll out the system in this country. The Minister indicated to us that it could take between 12 and 24 months.

What will happen in cases where meters have already been installed? For example, a meter was installed in my house. Will existing meters be removed? In urban areas the meters that are to be fitted could be 8 inches or 10 inches high and they will have to be inserted 16 inches or 18 inches below the ground to avoid frost damage. If one opens an existing stopcock the pipes are only 4 inches to 6 inches below the ground. I have seen a lot of examples of that, in particular in the past two winters. The entire system will have to go underground.

It was indicated in the presentation that it is understood that domestic disconnections will be disallowed. The Taoiseach gave a different answer in the Dáil before the summer break on possible disconnections. The introduction of charges is due to commence in 2014. Was 1 January 2014 indicated as a starting date or was it 1 July 2014?

Mr. John Mullins:

I stated that the system would be ready on 1 January. It is a matter for Government whether billing commences on that date.

Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Mullins might wait until 1 July.

Mr. John Mullins:

Okay.

Brian Stanley (Laois-Offaly, Sinn Fein)
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Perhaps Mr. Mullins might clarify the issue for me. Currently, there is a capacity issue. We all accept that. Are we 20%, 30% or 40% short? I am concerned that we could be 30% short, in addition to leakages of 41%. Some county councils have introduced what is generally known as district metering. Different terms are used in different localities. It shows that most of the leaks are in the mains, in the supplies going to the meter. Will Mr. Mullins comment on the point?

I wish to ask a couple of brief questions on the Garryhinch project. Up to last year it was a major project that Bord na Móna was anxious to roll out. There were big plans for this ambitious project costing €450 million to €500 million. The intention is to pipe water from the Shannon, where there is too much water for part of the year, to Dublin where there is not enough water. Could Mr. Mullins provide clarification on the future of the project? Is the project considered to be critical to the future of Irish Water?

An environmental impact statement, EIS, was carried out on the first section of the pipeline to the first lake at Garryhinch in the midlands. What is the position with an EIS for the remainder of the pipeline? Is there a lead authority? Is Bord Gáis pursuing the project and what is the position of Irish Water in terms of the project? Is it considered that Bord na Móna would be in a position to deliver the project, including the pipeline as far as Dublin?

Metering and charging were introduced in the 1980s. It is intended to undertake an extensive programme of metering. The witnesses have indicated there are slightly more than 1 million households. I believe it will be approximately 1.2 million households. Is it envisaged that there will be much resistance to the roll-out of the project at community level?

Mr. John Mullins:

I shall try to deal with the Deputy's questions in the order in which they were put. I thank him for his commentary. Our estimation is on the basis of 1.05 million meters. We are taking a view on the number that will remain assessed. I understand the point that people are on public mains but are not covered by wastewater treatment in various locations across the country. We have tried to take that into our estimation as well. We have made soundings on the costs based on existing contractor arrangements. We have also spoken to meter manufacturers and boundary box providers as well.

Effectively, what we have done is a sum of the parts, with some contingency applied. I reiterate that I would like to be in a better position, whereby we would have done all the tenders and come back on a cost per meter basis. However, until we have the tenders completed, which will be in the spring, there may be an opportunity to come back and look at those numbers in better detail.

On the issue of timing, we are looking at a programme that will last until 2016 and be very aggressive. The whole county of Westmeath will be covered every month for 30 months, which involves a lot of construction. If one considers the scale and size of Westmeath and the covering of that in one month, it is a significant undertaking. We will have to repeat that process for 30 months right across the country. The rate at which we propose to do this is actually double the rate Thames Water in London is doing at this time. That company has a much bigger security of supply issue than we have in the east coast of Ireland. Does Mr. O'Donoghue wish to comment on the use of personally owned meters? Deputy Stanley referred to his.

Mr. Paul O'Donoghue:

We will be looking to procure metering technology which will allow us a degree of redundancy within the technology. In that way, we will have meters that come from more than one party as well as meters capable of being read by more than one technology. This will ensure that if we run into difficulties with a contractor or with any of the technology we will have coverage. We can always extend other contracts to ensure we can go about our work. Therefore, no single meter will be deployed, rather a number of similar type meters. Neither will there be a single meter-reading technology but a number of technologies that are capable of reading the suite of meters. The question in regard to Deputy Stanley's meter is whether it will fit inside that suite. Hopefully, the local authority survey campaign, yet to be undertaken, will identify not only the Deputy's meter but many others that may exist. From that, we should be able to tell whether a meter will fit inside the spectrum we will specify. If it does fit we will probably use it but we will have to inspect it, subject to its age, battery condition and whether we can clip on units that can pulse readings to us. We will need to assess whether the meter can be used. The chances are that in most instances we will fit new meters in order to ensure they can be read.

Mr. John Mullins:

In terms of the total cost of installing a meter, replacement is most probably the cheapest part because no civil work is being done and the boundary box is not being installed. One is using the existing infrastructure and replacing the meter.

I refer to disconnections, an issue I commented on in my formal presentation and which was commented on in the committee's report in June. It is not usual in other jurisdictions to have full disconnection of a domestic customer although there might be a reduced flow. At this point the thinking is that there will be no disconnections. However, we will put in appropriate channels in terms of equal pay approaches, direct debit, paperless billing and all other channels available to customers. These will all be available from the start, on 1 January or 1 July, whichever date in 2014 is chosen.

I spoke to the chief executive of Bord na Móna last week when we both attended a conference. I am familiar with the project in the midlands. There is no doubt that whenever there is additional industrial activity on the eastern seaboard or each time an IDA client comes to Ireland those concerned are looking at fundamental aspects of any district or region - energy, sustainability and water supply. For example, expansion in Intel, in County Kildare is, in itself, a significant draw on the eastern seaboard water take. There is expansion in the agrifood sector. Currently all the queries that come to us in the gas business come from that sector, and deal with expansion. That will drive water usage and consumption nationwide, both at an agricultural and a processing level. We are at a very interesting point whereby our water consumption and demand, not only on the east coast but right across the country, will come under significant pressure. To meet that requirement works will be needed in numerous locations, and not only in Dublin.

We had an engaging encounter with the Dublin authorities. As members know, the Dublin authorities are conjoined and act as one authority. They communicated to us that there are issues. The committee's report quotes Professor Convery on the realisation that we are heading for a security of supply issue in the Dublin area. Projects such as that of Bord na Móna must be looked at seriously. Desalination is not an option in this country. Although it may be an option in places such as Abu Dhabi or Dubai it should never be an option in the case of the east coast and midlands of Ireland.

The Deputy suggested that one specific project should be endorsed by Irish Water. There may be other projects that wish to enter the fray although I am not aware of any others. However, a project of such a size in water terms, involving €450 million, which is similar to the figure I mentioned in regard to metering, is something I would assume would come through the stewardship of this committee and go all the way to the Cabinet sub-committee on infrastructure, as we have had to. However, there is need for such a project. The solution put forward as being least costly is one whereby water is taken from an area that is enriched and given to an area that is not as enriched.

Michael McCarthy (Cork South West, Labour)
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I call Deputy Coonan.

Noel Coonan (Tipperary North, Fine Gael)
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I welcome Mr. Mullins and his team, thank them for the information they have given us and for their presentation. It is somewhat ironic that we are discussing security of supply of water in a country where it never seems to stop raining, winter or summer. We are surrounded by water and yet, looking into the future, we seem to have nothing but water problems.

I wish Bord Gáis well with the Irish Water venture. It is important that we get it right and that the company is successful. I am sure, based on its record, it will make a success of Irish Water. Will Mr. Mullins be around long enough to see this through in five years time - he indicated he had other intentions - or are we looking at a potential managing director here in our midst? That is for Mr. Mullins to comment upon but we certainly wish him well with the project.

He mentioned the agrifood programme for 2020 which will place an enormous emphasis on water. It is important for agricultural production and food manufacture that we have proper supply of water. I am concerned about one proposal. Does Irish Water favour the proposal from Bord na Móna to plunder Lough Derg in County Tipperary in order to bring water to Dublin? What does Mr. Mullins think of opening up the supply of water to other concerns, or looking at other options? For example, there is an enormous aquifer in Lisheen Mines in County Tipperary which is being pumped out at considerable cost. That would be more than enough to supply Dublin and its surrounding areas. We are told there is a huge aquifer in Kildare-Meath and the Dublin area. Are Irish Water or Bord Gáis prepared to look at other alternatives? Lough Derg is a special area of conservation and this is of great concern to local people. People might accept the extraction of water but not to a lake which would then compete, on a tourism level, with what is available on Lough Derg. If there were boating on such a lake it would be in direct competition with Lough Derg. What is in it for County Tipperary and that particular area? The companies will encounter severe difficulties with that proposal. I would like to know what their attitude is and whether they are considering other proposals that would augment security of supply or water supply in the area.

I do not wish to go over matters that were mentioned but I refer, for example, to quality of water. Mr. Mullins stated it was important to have public acceptance of what Irish Water will do. What is the view of Irish Water on the fluoridation of water about which there is considerable public concern?

Some local authorities no longer use fluoride. In some countries its use is actually banned. In the event that our guests are concerned about people's dental health, I must inform them that I have two dogs at home and neither of them will drink from the public water supply. They would rather go hunting for water to drink from streams, puddles or whatever. I can assure our guests that my dogs have very good teeth. This is a matter of growing concern among people and I would like our guests' opinions in respect of it.

Mr. Mullins stated that Irish Water will purchase over 1 million boundary boxes and meters and that this "will be a significant international tender". Is he stating that the company will not be prepared to consider tenders from indigenous Irish companies? There is a company in Limerick which has received international awards for the flow meters it produces. If that company were successful in winning the contract to supply meters, this would lead to the creation of significant additional employment and would provide a big boost to the area in Limerick in which its operation is located. I am a Corkman but just because the company operates out of Limerick - and is headed up by a person from Tipperary - it should not be ignored. I am sure there are other companies that could produce the types of meter required. Why has Mr. Mullins stated that it must be a significant international tender? This is a matter about which I am concerned.

People will be obliged to pay for water, which is fine. However, they are being driven mad by the fact that they are also obliged to pay for the disposal of waste water. This represents a double charge. How do our guests propose to deal with this issue, particularly in view of the fact that some local authorities charge for the disposal of waste water? The installation of modern meter technology could make it easy for families to know the exact amount of water they use. New meters should be readily accessible inside people's homes, rather than the case at present, which is that people are obliged to make a big effort to access their meters.

Mr. Mullins stated that Irish Water would be engaging local contractors. Will he indicate whether it will be the company that appoints these contractors, or the local authorities? When does he expect the work to commence? Will Irish Water ensure this work is advertised in such a way that local contractors will have an opportunity to tender for it?

Exciting times lie ahead for Irish Water and I wish our guests well. Bord Gáis is at least subject to some degree of competition. Will Mr. Mullins provide an assurance that the general public will not be ripped off due to Irish Water's monopoly in supplying water? Have our guests engaged in discussions with Northern Ireland Water? We met representatives from the latter and they pointed out some of the pitfalls that exist. Does Irish Water have a constructive working arrangement with Northern Ireland Water which would allow us to avoid imposing additional costs on taxpayers?

Mr. John Mullins:

On the final issue to which the Deputy referred, we have had many engagements with our counterparts in Northern Ireland. The regulator for water in Northern Ireland also has responsibility for regulating the gas market. We are very active in terms of our engagement with that regulator. We have engaged in conversations about the regulatory structure and we are aware of some of the issues that arose in respect of water in Northern Ireland. I can inform the Deputy that the companies involved in the privatisation of UK water utilities did not enjoy the smoothest of rides for many years, particularly in the context of the acceptance of new charges. The latter actually proved to be quite an issue in Britain.

As I told Deputy Stanley, we are aware of only one alternative project. If there are other projects that will, on a least-cost and appropriate environmental basis, meet the requirements on the eastern seaboard, then as a company we would be quite open to seeing what they have to offer. Any project of that scale will have to be subjected - on a strategic basis - to a full economic and environmental assessment. This does not take away from the fact that a need exists and that we will have to meet it. We must ensure that we proceed in the appropriate way in this regard.

I have been lobbied in respect of fluoridation. I am aware there has been quite an amount of debate on this subject. In the main, this is a matter for the EPA. The latter will still have environmental governance in respect of both water quality and the addition of chemicals to water supplies. I understand that local authorities have different policies on fluoridation. Those policies will have to be harmonised. We are not empowered to take on that issue at present. We will not be so empowered until at least the third quarter of next year. We certainly want to engage on it with the committee, with local authorities and with groups that are concerned about fluoridation.

The EPA produced an environmental assessment earlier this year and while we performed very well in comparison to our counterparts across Europe in the context of levels of phosphates, nitrates and chlorophyll in our water, there are still quite a number of issues which need to be addressed. The assessment to which I refer indicates that 57 waste water treatment works are creating problems in terms of pollution. In addition, 46% of waste water treatment works in this country do not meet all of the standards set down by the EPA. This indicates that a significant amount of capital and other resources must be invested in order to improve the position regarding discharges and also the quality of water in river basins throughout the country. The assessment also indicates that 50% of the problems that exist at the sites to which I refer were caused by discharges from waste water treatment works and that the other 50% were caused by diffuse pollution arising from agricultural activity.

We have made real progress in reducing the levels of nitrates and salinity in our make-up water in recent years. However, we still have a long way to go. It will take some time to reduce the levels of salinity in Lough Derg and other lakes. This is because such salinity has built up over many years. We still have quite a distance to travel in respect of water quality and it is unlikely that we are going to meet all of the water framework directive requirements. It must be stated, however, that other European countries are in a worse position and will be obliged to invest a great deal more in order to get their systems up to speed.

In view of the scale of the tender that will be involved here, we have no choice other than to place a notice in the Official Journal of the European Union. We are obliged to do so under European law and we have no choice in the matter. We are aware of companies in this country that can supply boundary boxes but the position with regard to meters is more international in its make-up. We would be very much open to an Irish operator supplying the products required, just as we want local contractors to supply plumbing and fitting capabilities and we want the contact centre to be based in Ireland. For the first time, the latter will be a national lo-call service that will be similar to those provided by Electric Ireland, Bord Gáis, Eircom, etc. These are all new and exciting developments in the sector and they will give rise to the creation of significant employment - to a lesser or greater extent - in all parts of the country. There has already been quite an amount of activity in respect of trying to get the contact centre, which is very large, to a number of locations throughout the country. I hope I have answered the Deputy's questions.

Michael McCarthy (Cork South West, Labour)
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That concludes the contributions and questions of spokespersons. We will group the questions that other members wish to pose.

Kevin Humphreys (Dublin South East, Labour)
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I will be brief because I know people have been waiting some time to ask their questions. With regard to pipe replacement, I ask Irish Water to work with the Government in the context of providing homeowners with either a one-off grant or a save-as-you-pay scheme. While experienced contractors are on site, we should use economies of scale to see whether it is possible to achieve this type of replacement.

The rate of water leakage throughout the country is 41% and is almost as high as 60% in certain areas. Will Irish Water or the regulator set targets in respect of leakage reduction and water main replacement? Even when money was available during the past 20 years, a water main replacement programme was not put in place. Who will have responsibility for setting the targets to which I refer?

Will there be co-operation with suppliers in the case of rural towns and certain parts of cities? For example, will it be possible for replacement of water mains to be combined with the installation of broadband cable? I am not sure how the company intends to operate the meters. How will apartment blocks be metered? Many terraced houses work on dual supply. Will offers be available in order to break that dual supply?

The committee is anxious that Irish Water would be included under freedom of information legislation and that this committee and the Comptroller and Auditor General would have an oversight role. Mr. Mullins referred to his experience in England where consumers are represented. We touched on this in our report and we used the example of Scottish Water. I ask Mr. Mullins to comment in this regard.

I refer to the supply of water for the eastern region. I note the welcome announcement by Kerry Group of a new facility in County Kildare. This will be a substantial development. The greater Dublin area supports substantial industry and it is predicted there will be an additional demand of 87 million litres of water in the near future. There is not sufficient water produced in every five out of seven days to supply the Dublin city area and head room is being built up at the weekends. I do not get a sense of urgency. People say this is a Dublin issue but I disagree. It affects Dundalk and Louth, Arklow and Mullingar and it is a regional problem in that sense. Any additional water supply will require a four to six-year lead-in time. I would like to note a greater sense of urgency about dealing with the issue of water supply for the eastern region. A sustainable and copious supply of water is one of the top five indicators for attracting foreign direct investment. This is particularly the case with regard to the food, pharmaceutical and electronic industries. If we need to stay in that market we need to prove that Irish Water and the State are willing to provide a water supply where it is needed. For example, Ireland's main competitor for a company such as Intel is Israel and our competitive advantage is that we have water. We need Irish Water to treat this matter urgently. I hope the delegates can reassure us that the water can be supplied and that they will deal with this matter in a business-like and urgent manner and within a certain timeframe.

Mr. John Mullins:

I agree the save-as-you-pay approach has much merit. We are currently in discussion with the Minister, Deputy Pat Rabbitte, about this approach as applied to energy utilities. It is an interesting concept and I will consider that suggestion. The expenditure by OFWAT in the UK and the KPI, key performance indicators, improvement was part of the consultation process of agreeing a CAPEX programme. That is exactly the type of scrutiny to be used. For a certain amount of investment by region we will have to meet a certain level of leakage reduction and demonstrate that there has been that reduction in leakage. It is our expectation that the OFWAT approach is to be adopted by the Irish regulatory system. That is exactly what happens with regard to our CAPEX gas programme; under the customer charter we must meet these KPIs and we must invest effectively and efficiently. All of our gas transmission is sanctioned by the CER on an individual basis and also by the Department of Communications, Energy and Natural Resources. There is quite an amount of oversight and we expect that oversight to continue in the context of very large schemes and leakage reduction schemes. The leakage reduction scheme will continue for multiple price control periods and such a period could be for five years. There could be three price controls dealing with a progressive leakage reduction in every region in the country. In reply to Deputy Humphreys's concerns about urgency, as an engineer I fully understand the urgency and from speaking to people such as Barry O'Leary of IDA Ireland that there are issues associated with the placement of infrastructure and water is a material issue.

We hope that the introduction of metering will create a reduction in domestic consumption by at least 10%. There is empirical evidence to show that this will be the case. Citizens have reacted to other variable charges which have been introduced. As a result of our conservation and education programme we should see a conservation of water in greater Dublin that might give us that extra period of time to deal with the urgent issue. However, that is not a silver bullet to cure the problem which will need to be dealt with by means of significant investment in a particular project.

In response to Deputy Stanley, the only one of which we are aware is the proposal by Bord na Móna. I have suggested to the chief executive of Bord na Móna that he should engage with the Commissioner for Energy Regulation on that project forthwith. We will engage with Bord na Móna or any other body which is looking to provide a solution to that problem.

Deputy Humphreys asked about the installation of broadband cabling. Our telecom subsidiary, Aurora Telecom, works with Enet which uses the sewage system and MANs. Our company already brings fibre-optic cabling along with our gas pipelines from Dublin to Galway, Ennis, Shannon, Limerick and to Cork. We are commissioning in Cork this month. We are the first company to have brought fibre-optic cabling to Shannon alongside our gas pipeline. We are very familiar with the conjoining aspect. It makes complete sense to take the opportunity of installing the last-mile fibre at the same time as the installation of new infrastructure. I have made this point to the Government.

The question of freedom of information oversight is a matter to be dealt with by legislation. Irish Water is a commercial company which is not subject to freedom of information legislation but the company is subject to Oireachtas committee oversight. On the question of consultation with consumers with respect to the administration of charges and the provision of services, an advisory body could be established in some form. As a utility provider we have built up our links with consumers over many years. We have focus groups who meet regularly in order to gain an understanding of our customers' needs. The issue of switching means this is important. This will not be the case with regard to Irish Water. On the issue of a monopoly, that is the reason a regulator is in place. The regulator must ensure that Irish Water does its job in terms of quality, service and price and we rely on good regulation in that regard.

We are engineers and we fully understand the issue of supply for the eastern seaboard. However, until the legislation is fully in place in 2013, Irish Water cannot sponsor that particular project.

Kevin Humphreys (Dublin South East, Labour)
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How does Irish Water intend to deal with the metering of apartment blocks if the plan is to put them at the kerbside?

Mr. Paul O'Donoghue:

Apartments are out of scope for the phase 1 metering programme that we have embarked on. A figure of 1.05 million meters was referred to earlier; these are expected to be the most straightforward meter fits available to us. Typically, they will be single supplies to single properties. We will have to circle back around to look at more complex properties in the future. Meter fits to those properties are likely to be subject to cost benefit analysis by the regulator. We will embark on such programmes only when the regulator approves them and permits us to proceed.

Kevin Humphreys (Dublin South East, Labour)
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In the Dublin south east area that I represent, up to 50% of residents are apartment dwellers.

Mr. Paul O'Donoghue:

Yes.

Kevin Humphreys (Dublin South East, Labour)
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Is Mr. O'Donoghue saying that apartments will not be metered in the first round?

Mr. Paul O'Donoghue:

They will not be metered in the first tranche.

Kevin Humphreys (Dublin South East, Labour)
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How will they charged?

Mr. Paul O'Donoghue:

They will be charged on an assessed basis, which is how everybody will be charged while they await the installation of a meter.

Kevin Humphreys (Dublin South East, Labour)
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That will take a much longer period.

Mr. Paul O'Donoghue:

It will be a longer period for people residing in apartments and, as the Deputy mentioned, properties that have dual supplies or are supplied from the rear, with the mains connection located in the back garden. There are a number of property categories but we will not have identified them all, or their extent, until we complete the survey.

Mr. John Mullins:

It is done in the same context as waste disposal, as the Deputy may be aware. The management companies for those apartments - I know it is different for private tenants and landlords - share the charges for central waste services or any other services such as common energy, lighting or heating for an apartment block. The opportunity to install one central meter for all of the water supply to an apartment block is an option, but it is up to the management company to charge for it as part of the annual financial statement issued to the apartment units.

Barry Cowen (Laois-Offaly, Fianna Fail)
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That would not account for individual apartments.

Mr. John Mullins:

I understand, but there is no easy technical solution.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I am sure there is.

Michael McCarthy (Cork South West, Labour)
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All of the spokespersons have had ample time to contribute. There are seven members who wish to speak and I shall allow the debate to continue, but I ask that members only ask questions and not make Second Stage speeches. I call Deputy Coffey, Senator Landy and Deputy McLoughlin.

Paudie Coffey (Waterford, Fine Gael)
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I thank Mr. Mullins and his delegation for taking on a large infrastructural project, and I wish them well.

Mr. John Mullins:

I thank the Deputy.

Paudie Coffey (Waterford, Fine Gael)
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I shall briefly refer to the last topic that was discussed - that is, network connections located at the back of houses. I am from Waterford and I am aware that there is quite a large urban tract in Waterford city where all mains are serviced through the rear of properties. I ask that the assessment base compiled be conservative and favour the customer rather than the supplier. I want the assessment to be as low as possible for those customers until a solution can be provided.

What type of asset management does the body use? Is it comprehensive? Is it well developed? Various local authorities have their own management systems and asset databases. How does the organisation engage with local authorities?Leakage issues were mentioned. The importance of knowing the locations of pipes and networks for maintenance, repair and connection means it is essential that we have a good database of assets in order that we can manage them in a structured manner. I ask the delegation to elaborate on the matter.

I know that Bord Gáis Éireann has a customer charter, but does Irish Water have one? The level of service was mentioned in the introduction and I am sure that the body will outline a level of service that we should try to achieve. I am sure issues such as low water pressure and quality will arise. Has the organisation engaged with the regulator, the Government and the Departments to ensure there is a customer charter that states a minimum quality level of water supply before we charge? What compensation is available to the customer if the minimum standard is not reached? It is important, when we provide a public service, that we have a minimum level of service and a customer charter.

Denis Landy (Labour)
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I thank the delegation for its attendance. I would like to deal with a number of matters. First, I have not seen any reference to other areas related to water, such as drainage, septic tank inspections, flooding and water recovery and removal. Will the organisation take over such areas, or will they remain with the local authorities?

I have a question on the staffing situation post-2017. In the document supplied it was stated that a consultative group, chaired by Mr. Kevin Foley, was set up to deal with the matter. Has the group met? If so, what progress was made? Like Deputy Coffey, I come from a rural area and I have spoken to many staff members in recent months. They are concerned about their jobs as 2017 is only a couple of years away. Many of the staff are young and they want to know what will happen to their jobs post-2017.

Third, I have a question on the assets of local authorities such as water treatment plants. At present most local authorities have maintenance contracts with private operators and each local authority within a group of local authorities pays an annual fee. What will happen to the contracts and to ones that are close to renewal? Will local authorities renew them? Will the organisation provide guidance?

Deputy Kevin Humphreys used the word "oversight", but I would use the word "accountability". Where does accountability lie? The delegation stated that the new body would be answerable to an Oireachtas committee. I was a member of a local authority for 23 years. When there was a problem to do with water, local authority members could approach the director of water services. Whom will local authority members approach now? Whom will a locally elected representative or Oireachtas representative approach to rectify problems and ensure maintenance is carried out?

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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I welcome the delegation. I have a number of questions, some of which have already been answered. Water scheme directors and secretaries are concerned about the future of the schemes when they come under the remit of Irish Water. Can the delegation outline the future envisaged for these schemes in rural areas? I come from the Sligo-North Leitrim constituency, which has quite a number of group water schemes. Will Irish Water take them over? Can groups choose to remain as they are? Will Irish Water engage with the stakeholders before making a final policy decision on group water schemes?

I also come from a local authority background. A Senator mentioned that customers with issues to do with billing, leaks and so on rely on their local councillors and public representatives to deal with their queries. When Irish Water takes over, will local public representatives have a direct line to the company to deal with queries?

Where will the offices of Irish Water be located? Will they be local? I have listened to the debate and the delegation has answered all of our queries. People have asked me if local offices will remain.

Michael McCarthy (Cork South West, Labour)
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Someone has a telephone switched on. I ask him or her to switch it off as it is interfering with the microphone system and RTE will not transmit any part of the proceedings if there is telephone interference.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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Will local offices remain in the same place as local authority headquarters or other offices? Will arrangements be made so that public representatives can form part of a consultative committee similar to the HSE's health committees? Will local councillors or public representatives such as Oireachtas Members be able to meet senior local and regional executives in order to address concerns about infrastructure and future developments by Irish Water?

I have listened to the delegation and it provided all of the answers at national level. As a Deputy representing the Sligo-North Leitrim constituency, I am aware of many local concerns. Mr. Mullins stated that a panel of 150 to 200 local contractors would be appointed to install boundary boxes and meters. Where will they come from? I know of local contractors who do not have a lot of work and they would be suitable for this type of work. Will Irish Water employ local contractors?

Mr. Mullins indicated that, between the local and regional contractors and the support programme, the company expects to create 2,000 jobs arising from the metering programme. When will this start? The company will also purchase one million boundary boxes and meters.

Michael McCarthy (Cork South West, Labour)
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Thank you, Deputy McLoughlin.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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Sorry, Chairman, but I am entitled to my time. Everybody else has had plenty of time. I have a number of questions and have waited here for two and a half hours to pose them. I am anxious to-----

Michael McCarthy (Cork South West, Labour)
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No one is going to stop the Deputy from asking his questions. I just want to be fair to everybody else. The spokespersons-----

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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I am entitled to ask my questions.

Michael McCarthy (Cork South West, Labour)
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Yes, you are, but the spokespersons were given ample time and now we have a number of others wishing to contribute. I am trying to be fair to everyone.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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I am anxious, now that I have an opportunity to speak, to convey the concerns of my constituents. When I come in here for a committee meeting I am entitled to the same courtesy as everyone else around the table.

Michael McCarthy (Cork South West, Labour)
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Yes, you are.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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Some people here were asking questions for 15 or 20 minutes. I have been waiting like everybody else.

Michael McCarthy (Cork South West, Labour)
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They were the spokespersons for their parties. They are entitled to that time.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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I am a spokesman for my constituency and I make no apologies for being here today.

Michael McCarthy (Cork South West, Labour)
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I am not asking you to make any apologies. I am simply asking you to conclude your questioning.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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I have two more questions. The gentlemen spoke about employing experts. When I hear people talk about employing experts I get very concerned because I have seen what the experts in this country have done in recent years. The company is going to employ ten panels of experts in various fields over a three-year period. This concerns me because I know where the experts are at present - in the local authorities. As some previous speakers have said, the authorities in Northern Ireland made mistakes when they disregarded the advice from people on the ground in local authorities. The gentlemen before us have a lot to learn in terms of looking after the experts who are currently in place and who are concerned about their jobs after 2017.

Reference was made to a call centre provider who will manage and operate the Irish water system for consumers. Where will this call centre be based? I had other questions but it is obvious that the Chairman is not going to give me the opportunity to ask them.

Michael McCarthy (Cork South West, Labour)
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No, but I have given you more time than the previous three speakers. I now ask the representatives from Bord Gáis to respond.

Mr. John Mullins:

Chairman, I will deal with Deputy McLoughlin's questions first. As Deputies will know, I live in the small east Cork village of Castlemartyr and know all about rural Ireland. There is a wastewater treatment works located about 50 yards away from the back of my house. I am as exercised about what is happening with Irish Water as anybody else in rural Ireland.

The group water schemes are not within our remit, unless they want to be. If they do, they must be connected to the public mains. That is the real divider between ourselves and the group water schemes. Such schemes exist because they are not connected to the local authority system. In the past, some private schemes have been connected to the public mains and in the event that more schemes choose to do so, then they will have the opportunity to come under our remit. However, we are not looking to create a kingdom of group water schemes within Irish Water. That is not the intention. If it is appropriate for certain schemes to be connected, that can be done. If it is not appropriate, it will not be done.

It is absolutely our intention to work with local authorities. As it stands, we work with local authorities right across the country and have good relationships with them. We have to open up roads on a regular basis and we fully understand the concept of consultation, as a company and as a national utility. We will have to do exactly the same, on a larger scale, as a water company. We have 11 agricultural liaison officers across the Republic dealing with way-leaves across farms and liaising with landowners on a wide range of issues. We have a deep legacy of dealing with local stakeholders, county councillors and city and county managers all over the country.

From a regional perspective, our intention, before the announcements on local government reform, was to use the eight regions that currently exist. Clearly, that is now moving towards three in the context of local government reform, but under the Water Framework Directive we must move towards a river basin approach, which is well documented by the EPA. Under the river basin approach, the Deputy's own constituency, for example, would be in the Shannon basin but would also be part of the Connacht region. In that context, therefore, changes will have to be made as we go forward.

There will be quite an amount of consultation. We have discussed among ourselves the appropriateness of a dedicated interaction between the company and local councillors so that there will be people available to local councillors for advice. If there is an issue of operational maintenance, it will be dealt with regionally and will not be dealt with in Dublin. I fully understand the point the Deputy was making. Such issues will be dealt with by regional offices and we would hope that the people who are the experts, according to the Deputy, will remain the experts within that regional structure. That is certainly the intention we have. We understand fully the points being made by the Deputy.

I cannot say where the contact centre will be because that is a matter for open tender but I expect that tenders will be forthcoming from all over the country, including places such as Sligo, Galway, Limerick, Waterford, Dublin, and Cork, as well as several county towns. We have heard that there are a number of tenders being prepared at present in various locations.

Paudie Coffey (Waterford, Fine Gael)
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Is there a limit on that, in the sense that those tendering must have a turnover of €20 million? If so, it will exclude an awful lot of people.

Mr. John Mullins:

There have to be limits with respect to the tender, given the scale of the contract. If one looks at the type of turnover that will be involved, one can see it is a significant contract.

Paudie Coffey (Waterford, Fine Gael)
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Yes, and the minimum limit would exclude a lot of people in the places Mr. Mullins has mentioned.

Mr. John Mullins:

We have been caught as a utility in the past and have learned the hard way that where we have gone into counterparty arrangements with entities that are not of appropriate creditworthiness, effectively we have had to take contracts back, lock, stock and barrel, and move them elsewhere. We do not want to be in that situation again, which would lead to discontinuity of customer service, or even the threat of same. We must also ensure that we engage experienced operators in terms of modern-day technology and customer service.

Paudie Coffey (Waterford, Fine Gael)
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The limits would exclude a lot of people with relevant experience. I am just making that point. The way the contract and the tender are established excludes a lot of people who would comply with many of the criteria outlined by Mr. Mullins. I know a number of such people and I am sure other Deputies do also. That is my only point.

Michael McCarthy (Cork South West, Labour)
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I wish to ask a question on that point, Mr. Mullins. Is the company obliged to have one big contract for the call centre? Would it not be possible to have a number of smaller contracts, which would allow smaller companies in Ireland to tender? I know the company must comply with international rules and European regulations, but surely it would be possible to break the contract down into smaller contracts in order to secure local jobs.

Mr. John Mullins:

If we did that, on a regional basis for example, we would be creating inefficiencies. We would have to have servers, training and technology in every location across the country. We have the experience of having centralised our operations in the gas business in Killorglin and we provide employment, through FEXCO, for 250 people in south Kerry. That is our experience. We employ 62 people in Clonakilty, in the Chairman's own constituency, who deal with issues such as payment plans in the gas and electricity business. We have moved various services in the gas business to locations outside Dublin. However, to begin with, we must have a central customer service centre, a national lo-call number, one set of servers, one set of technologies and two systems, namely, an asset management system and a customer information and billing system.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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We see what is happening at the moment in other semi-State bodies. It is not effective and it is not working. People do not know who they are dealing with. The Chairman's suggestion of having regional call centres would be far more effective. That is a route the company should consider.

Mr. John Mullins:

In response to that, since I have taken the helm at Bord Gáis, I have insisted on top-quality customer service and have placed great store by the customer charter. This company has won international awards for customer service in our gas networks and our energy business for the last three years running. In fact, two years in a row we were voted the best contact centre across all categories in Britain and in Ireland. We are quite proficient when it comes to customer service. We have excelled in that area and have the awards to prove it. We want to take that particular proficiency and apply it to Irish Water.

To return to the point made by Deputy Coffey, Irish Water will have a customer charter. The call centre, for example, will have to respond to calls within a certain timeframe. It will have a limit on the number of dropped calls allowed. All of the key performance indicators that we currently apply to our own customer service centre will be put on the table for the new centre and we want the tenderer to give best-in-class service.

That is fundamentally important. We in this company will insist on nothing less, of that I can assure the members. It is on that basis we will move forward. Our tenders are written on the basis that the key performance indicators we currently have are appropriate. It is vital we do that. If people pay for a service they deserve to get a response within a certain period. If one telephones the 1850 20 50 50 number for Bord Gáis, one's call will be answered within 20 seconds. That is reality of what we do in our business and the one we have to put forward for Irish Water. In the context of the CER in terms of low pressure and quality, we will take those issues on board.

In terms of the asset management systems, I was in Yorkshire Water implementing the Maximo system, which is the system we will put in place. It is an IBM system that is state-of-the-art and is used in the United States and throughout Europe in asset management systems. It is the system we will put in place here, Britain having put in place 12 to 15 years ago. Mr. Cowhig might comment on the stage we are at in that process.

Mr. Ger Cowhig:

We have very strong asset management systems in place in our gas industry. We are taking that expertise and growing that system for use in Irish Water. We will set up a work-flow management in Irish Water and cyclone click to communicate, through hand-held technology, to those on the field and hopefully in a number of years we will work with those on the field through hand-held technology, as we do in the gas industry today, which will be an efficient way to enable the flow of information back and forward. The customer will be able to find out at any point in time what is happening, for example, if a job is being done on his or her property the stage it is at. The customer will be able to ring the call centre and identify if a person is working on the field and, if so, if that person will be able, through hand-held technology, to communicate back and forward with the call centre to find out what is happening on that customer's premises. Therefore, the customer will have the latest information at any point in time about what is happening on his or her property.

Mr. John Mullins:

We also use photographic evidence in terms of the asset condition. All of that will be done automatically and digitised back to a central engineering centre. That is the way we do our business in Bord Gáis and we expect to do that in the case of Irish Water.

On the digital nature of the network, it is digitised in some areas and not in other areas. We face the carrying out of a major programme of digital mapping of our water system and we will have to do that over a period of time. We estimate it will take at least five years to do that and this will involve 25,000 km of network. We are not sure yet how much of it has been digitised. Our gas system is fully digitised. We want to get to a position where, by using a product called Small World, which we will use with the Maximo system, we will be able to have a full digital view of all the water assets in the system and be able to store maintenance records of each of the major assets such that we will know when inspection cycles should occur in the context of the engineering.

Paudie Coffey (Waterford, Fine Gael)
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On that question-----

Michael McCarthy (Cork South West, Labour)
Link to this: Individually | In context | Oireachtas source

Deputy-----

Paudie Coffey (Waterford, Fine Gael)
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This is important. It is about the database and the asset about which we are talking.

Michael McCarthy (Cork South West, Labour)
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There are four members who have yet to speak and the Deputy has got to speak four times.

Paudie Coffey (Waterford, Fine Gael)
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I know but I want to get clarity on this. We are here to get clarity on the systems. This is a huge infrastructural undertaking and I do not envy what Bord Gáis has to do.

Michael McCarthy (Cork South West, Labour)
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A final question, please.

Paudie Coffey (Waterford, Fine Gael)
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What level of engagement have the witnesses with the local authorities and how much digitisation has occurred? I do not expect Mr. Mullins to answer that on the spot but I ask that he come back to us with the answer. I am aware, as is the Chairman, that local authorities have different asset management systems.

Michael McCarthy (Cork South West, Labour)
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There are four members who have not got to speak yet.

Paudie Coffey (Waterford, Fine Gael)
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This is key information that we need to understand because this is all very well but it is when we get to 2014 that we will see the problem.

Michael McCarthy (Cork South West, Labour)
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Point taken, but there are four people who have not got to ask questions-----

Paudie Coffey (Waterford, Fine Gael)
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I accept that but I want clarity on this.

Michael McCarthy (Cork South West, Labour)
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-----while some members got to speak a few times. Mr. Mullins might answer that question and if he does not have the answer to it he might come back to us on it.

Mr. John Mullins:

Part of our due diligence process is to engage with all the local authorities to understand exactly what they have. They will respond to all of that. We will know exactly what level is digital and what is not digital. We will carry out a full due diligence report and we will then come back and give the committee further information on that. This is part of the due diligence exercise and it is a foundation point in establishing exactly what we need to do in terms of the digital nature of our network. We have done it in terms of gas and we have the experience of that.

To return to the issue of subject matter experts, I will not comment on the qualifications of engineers or otherwise, but, as an engineer, I am pretty proud of the profession and, generally speaking, engineers do things fairly properly, otherwise things would not work. In the main, we are looking for subject matter experts in highly technical areas in chemical engineering, environmental engineering, hydrology, etc. We are not looking for other forms of experts to whom the Deputy may have been alluding. We are looking for specific expertise that is of a technical nature and international standing.

Denis Landy (Labour)
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On a point of order, I asked four specific questions, none of which has been answered yet, and I am waiting patiently to hear the response to them.

Mr. John Mullins:

I will respond to Senator Landy. My apologies, I was coming to the Senator's questions. With respect to the issues related to septic tanks and flooding, we will not be responsible for that. I understand that issues related to flooding and flood protection measures will still be under the remit of the Office of Public Works. With respect of the septic tank inspection, that will not be a matter for us.

In the context of 2017, that will be a milestone. It is not a point that we would say the service level agreements will finish. I thought I said that earlier but if I did not I am saying it now. Local authorities have different positions with respect to the number of staff they have dealing with water services. Some have a minimal level and some have quite a full number in that service. Some use the private sector to support their services and some do not. As I said earlier, it is a patchwork quilt in terms of provision. As part of our due diligence process, we need to understand exactly how we will regionally structure matters such that we will retain the expertise Deputy McLoughlin talked about in Irish Water and fundamentally make sure we continue to perform that service.

I take on board the point about young people who have mortgages. Irish Water is not established to place a threat on young people with mortgages working in local authorities. At a SlPTU conference at which Jack O'Connor was present, I said that Irish Water is not established for there to be compulsory redundancies in local authorities. There have been situations where services have been privatised in the past and staff have been put into different divisions within local authorities. We have no control over that matter - it is an issue for the employer, which is the local authority. We have no influence over that matter. However, collectively, we must make sure there are operating efficiencies as we move forward, that we adapt to new technologies and change, bring in digital networks and make sure that we are doing the right thing for the customer at the least possible cost to ensure that the charge is the lowest possible. That is vitally important.

In terms of maintenance contracts, until such time as we are legally entitled to take on those contracts, we will not take them on. Therefore, we need to have legal capability such that those contracts can be novated on transfer of the assets. It is likely that those contracts will be transferred with the assets and we expect that will happen in 2014. My colleague, Mr. Cowhig, might like to add a further comment.

Mr. Ger Cowhig:

No. That is exactly the position.

Denis Landy (Labour)
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Should the local authorities enter into a role regarding contracts or what are they supposed to do? I have been asked to ask this question by staff in local authorities.

Mr. John Mullins:

I understand that the majority of these contracts have extension clauses. They could enter into having an extended period with the existing contractor, as we do. If there are local authorities that have that question, we are open to having that discussion and consulting with them on that matter. Mr. Cowhig might like to add to that.

Mr. Ger Cowhig:

Any contract in place that is purely related to water will be novated on the date we take over the assets. The local authorities are responsible for Irish Water at present and if there are contracts to be rolled over, they should roll them over.

Mr. John Mullins:

The Senator asked about accountability and this is related to Deputy McLoughlin's point. Accountability in this respect will be dealt with on a regional basis, whether it be in Carrick-on-Suir or Clonmel I am not sure, but the new Tipperary council will be within a regional structure and water service engineers and technicians will be available to that locality.

Denis Landy (Labour)
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What will be the role of the local councillor in effecting maintenance, repairs, etc. That is the question Deputy McLoughlin wants answered. What will be their role?

Michael McCarthy (Cork South West, Labour)
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That question was answered. I am moving on to take questions from the next three speakers.

Mr. John Mullins:

In Scotland, and I know the committee examined the provision of services there, that is done through a consultation process between the councillors and Scottish Water directly. I do not see a reason that cannot be achieved between the councillors and Irish Water on a regional and national basis.

Michael McCarthy (Cork South West, Labour)
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I will repeat this for the final time. The reason spokespersons got the time they did is that they are spokespersons, every other speaker has got an opportunity to ask a question and there are four members who have not spoken. The next three are Senator Keane and Deputies Corcoran Kennedy and McLellan and I ask them to ask questions.

Caít Keane (Fine Gael)
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Cuirim fáilte roimh Bhord Gáis. Uisce Éireann or Irish Water is the name referred to in the document.

It had been agreed at the committee and in the Seanad that "Uisce Éireann" was the name. That is the name it was given by the chairperson in the press releases. I want to ensure the name is "Uisce Éireann" not "Irish Water". In line with Bord Gáis, one would be following in one's own footsteps.

I wish to confirm the level of investment in the NPRF and if the drawdown has begun as yet? We have a vested interest in inquiring into that as we want to know at what stage it has started. Deputy Tony McLoughlin asked about the exceptional people in local authorities. Is there a reward for local authorities who conserve and have low levels of leakage versus those who have high levels of leakage? We have a table showing the leakage levels for each county and we know which counties are good and the counties that are not good. Is there a reward-punishment system in place?

As stated, the service level agreements expire in 2017 but what happens after that time? One of the Deputies asked about a local emergency response on the ground. On a snowy night when the pipe freezes who will get out on the ground? We compliment council staff for facilitating an emergency response on New Year's Day or Christmas Day. One cannot control the weather. Where will the boxes be placed and how will they be protected? I understand they will all be underground. I was a councillor in Dublin where the Local Government (Dublin) Act 1952 governed ownership up to and controlling the stopcock. When Dublin was broken up from city councils to county councils one side of the road had one regulation and the other side had another regulation. We want uniformity in regulation. How will that be provided for? As a result of an amendment I tabled in 1994 to the Water Services Act there is uniformity up to and including the stopcock. What is the position and how will it be done? Will be it be done by regulation, legislation or statutory instrument?

It is important to note from Bord Gáis Networks report that the Government has decided that domestic water charges will be based on a free allowance usage for those with affordability issues or medical needs. Many questions and myths have been peddled but I note that the delegates said it was Government policy that any strategic infrastructure would not be sold. In regard to asset management, has the fibre optic element of assets been factored into the tenders and the assets that the councils are handing over to Bord Gáis Networks in the piping system? Who is responsible for the final decision - is it the landord or tenant? Will it be the landlord versus the tenant who has to ensure conservation of water and ensure payment and-or responsibility? Will this be done by legislation?

The commission will hold extensive public consultation. I presume there will be written consultation and, if so, what is the closing date. A question has been asked about local meters but not on electromagnetic fields. We had a question on electromagnetism and smart meters which was referred to the Joint Committee on Health and Children. Will Bord Gáis Networks prepare a report for the Joint Committee on Health and Children on that issue?

Michael McCarthy (Cork South West, Labour)
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I thank the Senator.

Caít Keane (Fine Gael)
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As none of those questions has been asked I am not duplicating them.

Michael McCarthy (Cork South West, Labour)
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The Senator has asked about seven questions. I allowed the Senator in eight times.

Caít Keane (Fine Gael)
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I have no other opportunity.

Michael McCarthy (Cork South West, Labour)
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There are two more speakers in this group.

Caít Keane (Fine Gael)
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It is only 5.40 p.m. We were here the last day until 6 p.m.

Michael McCarthy (Cork South West, Labour)
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I do not care what time it is.

Caít Keane (Fine Gael)
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I am prepared to stay as it is an important issue.

Michael McCarthy (Cork South West, Labour)
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Deputy Corcoran Kennedy is present since 2.15 p.m. and has not got in yet. After that we have Deputy McLellan and Deputy Mulherin will come back in. I ask the Senator to respect that.

Caít Keane (Fine Gael)
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I have three more questions. Is the smart meter capable of reading the gas, water and electricity meter on a drive-by basis? Is there consumer and female representation on the board? On all boards of all companies where there are women, the shares have gone up. I ask the delegates to examine the share market.

Michael McCarthy (Cork South West, Labour)
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There are two female speakers after the Senator finishes.

Caít Keane (Fine Gael)
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I agree with the centralisation of services and IT services. The number of smaller contractors to be employed locally was 250. When can they start to apply and where?

Marcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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I welcome Mr. John Mullins and his colleagues. In regard to the international tender referred to, has Bord Gáis Networks explored any way to help Irish companies to tender successfully for the boxes as it is a very large contract? We have companies here who would be capable of doing that work. My other question is on water harvesting. Has this been considered by Bord Gáis Networks in public and private buildings? Will it explore any means of acquiring the surface water that would be harvested to potentially sell it? There is a lot of water in this part of the world and as there are many other parts of the world that need water perhaps we should look at these opportunities during the transition and historic changes that will be made in terms of Irish Water.

My other question is on public information plans. Does Bord Gáis Networks have such plans and, if so, how does it intend to roll them out and when does it intend to start, as many people are expressing an interest in what is happening with Uisce Éireann.

My final question refers to a comment made earlier that the delegates had been speaking with Dublin City Council and Bord na Móna in respect of the potential water extraction from the Shannon to the greater Dublin area. As a result of those conversations is there anything definitive as yet or is it an issue that is being prioritised? Clearly, being from Offaly, I am keen to hear more on the issue.

Sandra McLellan (Cork East, Sinn Fein)
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I welcome the delegates and thank them for the presentation which was very informative. I have a few short questions as most of the issues have been covered. With regard to the level of water shortage, there is 41% leakage. If the leakage level could be reduced by 30% and if 10% is saved domestically when the meters are installed, would the problem be solved? What is the role of the new authority during a flooding event and severe weather conditions? A question was asked earlier about its remit within the freedom of information legislation but I do not recall an answer. I reiterate the importance of a direct line for public representatives.

On the issue of the installation of water meters, I expect it will be much more difficult than anticipated by Bord Gáis Networks given the number of apartments and the amount of old local authority houses which have pipes running down the rear of the houses. Some people have built extensions and dividing walls over them. I have been informed that a whole street is on one line. How will the abolition of local authorities affect Bord Gáis Networks in moving forward?

Mr. John Mullins:

I will start with Senator Keane's questions. Perhaps Mr. O'Sullivan will comment on where we are at with the NPRF process.

Mr. Michael G. O'Sullivan:

We are still in discussion on the nature and form of funding we expect to come from the NPRF. The expectation is that it will be provided to us on normal commercial terms and rates. Those discussions are ongoing and we would hope to conclude an arrangement with the NPRF to support, at least in the short term, what we need to do in respect of the metering programme.

Those discussions are ongoing.

Mr. John Mullins:

We want to have key performance indicators, KPIs, and service level agreements, SLAs, with local authorities. We want to make sure there is some aspect of an arm’s length commercial arrangement between Irish Water and the local authorities. We take the view that essentially the local authorities will function on the basis that they will provide services, as they do today, for Irish Water and get paid for it. If they do so better than expected, we hope there will be bonuses. If not, there will be some penalties. That is how all our contracts in Bord Gáis are put together. It will be a standard SLA across the country. The date 2017 is only a time horizon for the programme. It should not be taken as an indication that SLAs will disappear in 2017.

We know all about an emergency response, particularly in getting around Dublin in the winter of 2010 when it was difficult to get to areas where there were problems with gas supply. We fully understand the emergency response from local authorities needs to be available every day, including Christmas Day and New Year’s Day. The facilitation of a digital dispatch service and a national call centre works for the gas industry. There is no reason we cannot work with the local authorities to have a single or lo-call number available for people to contact when there is an issue with water supply. We would expect the wheels of operations and maintenance to be put in motion in the same way as they are today.

The principle of equity across the country is vitally important. It is part of the gas and electricity system. We are comfortable with this principle and hope it will move forward in that there will be standards in domestic charging and a national customer charter with the principle of equity attached.

The freedom of information issue is covered in legislation, a matter over which we have no control. It is a matter for the Oireachtas on which to take a view. Historically, commercial semi-State companies have not been subject to freedom of information legislation.

On the fibre optic and telecom assets on water sites, they are held by the local authorities but were paid for by the Department of Communications, Energy and Natural Resources. They are run by eNet. We work with eNet and Aurora Telecom regularly. We have not had a conversation about telecom assets with the local authorities. We are at the point of trying to find out what water assets they have in the first instance and then perhaps might look at the fibre optic side. Up to €180 million was spent on these fibre optic assets. There should be an amalgamation of all of these assets such that we provide the last-mile solution. If we as a company can facilitate this, we are open to it. The transfer of assets is fundamentally a matter between the Department of Communications, Energy and Natural Resources and the Department of the Environment, Community and Local Government.

We spoke about arrangements between landlords and tenants and customer accounts which will start with the landlord. In the case of gas supply, the landlord holds the account until the tenant takes over tenancy and then it is transferred. In the gas business, out of 600,000 accounts, we do 100,000 switches a year purely on a change of tenancy. That is significant and we will see the same rate of changes in Irish Water. It will be a significant activity in trying to ensure landlords and tenants are aware of their responsibilities.

On an electromagnetic element to water meters, all I can say is that these are low power battery operated devices; therefore, emissions are irrelevant.

Caít Keane (Fine Gael)
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We referred this issue to the health committee. Has Irish Water had any correspondence from that committee on this matter?

Mr. John Mullins:

No, we have not.

While our delegation is all men, our chairperson is a woman, Ms Rose Hynes.

Caít Keane (Fine Gael)
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The great and the good.

Mr. John Mullins:

Perhaps that is the reason. Two of the eight members of the board are female.

On the tendering matter, we have to be careful in a notice in the Official Journal of the European Union, OJEU, that we are not partial. While we are the procurer, we are also the referee. We must be careful about having any contact with tenderers once the process has started.

Mr. Ger Cowhig:

Before the tender goes out, we make sure there is a competitive interest in it. We make contact with as many companies as possible to encourage them to tender. That includes Irish and international companies. We try to be as fair and transparent as possible to encourage as many companies to tender.

Marcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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Will it be done through the e-tenders website?

Mr. Ger Cowhig:

Yes and the OJEU.

Mr. John Mullins:

The framework agreements will have to be advertised in the local press, a point on which we insisted. Not everyone at small and medium-sized enterprise level would not access to e-tenders. It is important that there be as much public information as possible on the framework agreements.

There are many people examining water harvesting for toilet usage. From a sustainability point of view, this has merit in providing water for other uses in public and private buildings. There are private entities starting to sell services and products for water harvesting.

The first round of public information on Irish Water is set to take place in January 2013. It will indicate what the utility is about, its programme and detail many of the issues discussed today. With water meters, we might secure a 10% consumption reduction, but it will not deal with the material issues on the arterial routes of the water network. This issue will have to be addressed in an overall programme over 15 years.

In responding to flooding and on the Office of Public Works working with local authorities, the existing arrangements will continue. We are planning to establish regional contacts and direct line contact with all Deputies, Senators, councillors and public representatives. Issues will arise and we will have to have skilled personnel to answer questions and deal with action items. I receive plenty of letters from Oireachtas Members about gas customer accounts which we try to answer to the best of our ability. We will do the same in Irish Water, but it will be on a much grander scale.

The abolition of urban district councils, UDCs, and the amalgamation of their services is a matter for the local authorities.

I am unsure whether it will happen before or after the transfer of assets to Irish Water in 2014; I do not have clarity on the issue at this stage. Perhaps the committee might have. Fundamentally, it is an issue to be contended with in the context of urban district councils and town commissions being abolished. I hope I have responded to all of the questions asked.

Michelle Mulherin (Mayo, Fine Gael)
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Deputy McLoughlin asked a question about group water schemes. To what extent will Bord Gáis engage with stakeholders in group water schemes? I was not a member of a local authority previously, but I know that in many cases local authorities have had difficulty in getting schemes over the line to be taken over. Staff in the local authorities and water services have been invaluable in ironing out issues in communities and very hands-on. It is no mean feat and no small task. To what extent will Bord Gáis engage with group water schemes that do not want to be taken in charge or taken over?

Will there be a representative of rural water or group water schemes on the board of the new authority? Will there be someone from the consumer pillar to ensure consumer interests are represented? Will there be someone to represent consumers to give their perspective of the way Irish Water will conduct its business?

I echo what Senator Denis Landy said. A significant number of local authority staff work in water services and are concerned. Some of their concerns have been outlined and I will not repeat them, but they are legitimate. If this proceeds in a way that it turns its back on the expertise within local authorities, Bord Gáis will simply be trying to reinvent the wheel. There are certain problems and we should focus on the problems that must be addressed to have a proper water system and proper water services in the country. There is a gem of a resource in the local authorities and I am keen to ensure the people with the expertise are embraced rather than cast aside. They should be considered as a resource to meet the entire objective.

Mr. John Mullins:

I am unsure whether Deputy Michelle Mulherin was present when I commented on group water schemes. As we understand it, essentially if a scheme is not tied to a public mains, it will not be within the remit of Irish Water. Such schemes will stay as islands in their own right and continue to be self-governed.

Michelle Mulherin (Mayo, Fine Gael)
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Many of them continue to receive grants.

Mr. John Mullins:

I understand that and that is a matter being dealt with by separately, outside the establishment of Irish Water. That is part of the overall water industry reform programme under the auspices of the Department of the Environment, Community and Local Government. We are involved in the process, but Irish Water is not involved in group water scheme changes or governance. We are involved in the event that schemes want to be connected to the public mains and amalgamated with or subsumed into the Irish Water set-up. However, Irish Water will not take over governance of group water schemes; that is not the intention. There are issues with respect to group water schemes and grants. As I understand it, this will continue to be an issue between the Department of the Environment, Community and Local Government and the group water schemes directly and that we will have no role in this regard.

There was a question about having a nominated board member from group water schemes. We believe this will not apply, but it is entirely up to the Minister who may take a view that someone from the group water schemes has specific experience which could be useful in potentially being a board director. However, it is entirely up to the Minister for the Environment, Community and Local Government and the Minister for Communications, Energy and Natural Resources to consult and appoint board members. It is exactly the same in the case of a customer representative. I have outlined the system in the United Kingdom under which Ofwat, the Water Services Regulation Authority, has a consumer council that is part of the consultation process. It has engaged formally in the establishment of water charges in the British market, especially in the markets in England and Wales. The appointment of a director to Irish Water is a matter for the Minister and, as I understand it, this will continue to be the case. We will not be in control of that process, nor are we in control of the process today of the appointment of board directors to Bord Gáis.

I have repeatedly stated we fully understand there is expertise available within local authorities with regard to their assets, processes and systems that offer us a service today. We are not the employers and will not be the employers of the local authority employees for the period through to 2017. Local authority employees will stay within the local authorities and provide the same services for Irish Water as they do today on a regional basis. The assets will transfer and the capital programmes will be centralised such that the funds which may be limited or otherwise will be dispatched to the regions on the basis of particular regional budgets. This will be done in the same way as it is now with the 34 local authorities linking into the Customs House. In essence, it will be done as part of a formal, annualised process. It will be signed off on by the Commission for Energy Regulation or the commission for energy and water regulation, whatever the title of the regulator is in the future.

We fully understand the need for expertise. We are actively seeking for people with particular expertise from the local authorities to be seconded to the programme of Irish Water. The body is not yet legally established, but we hope the people concerned will be seconded to us to give us a full flavour of what is happening. We are keen for them to join our teams and staff. The people we have specifically recruited to the programme will create teams to address the new solutions necessary in providing water services solutions across the country.

Michael McCarthy (Cork South West, Labour)
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Deputy Marcella Corcoran Kennedy has a question about the River Shannon.

Marcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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Will Irish Water have a role in that regard?

Mr. John Mullins:

Yes, absolutely. There is no doubt that Irish Water will have a role in the context of the timeframe necessary to build it. This is a vast civil engineering project, on the same scale as the reservoir and ESB power station at Turlough Hill built in the early 1970s. There is no doubt that Irish Water will have a stake in terms of the solution for Dublin. I have stated to Deputy Humphreys that we fully understand there is an issue at which we will actively look. I apologise if we did not come across as being urgent on the issue because there are several other issues on a par in terms of infrastructure. However, that issue will be a part of that process and, most likely, Irish Water will be the supervisor, contractor or procurer of a successful project to provide Dublin with a secure supply for all the reasons highlighted.

Marcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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Is there a specific timeframe for the project?

Mr. John Mullins:

The specific timeframe is one on which in the coming years we must make a decision. That is my understanding. Certainly, we must have something in place. Deputy Marcella Corcoran Kennedy's document referred to the period 2016 to 2020 and the need to have something in place in that period. From looking at the numbers, it appears it will be an end-of-decade solution and that we need to start that work now. However, to be fair, several people must engage on this matter, not only us. It will involve the Commission for Energy Regulation, the Department, this committee and others. Ultimately, because of the scale of the project the Cabinet sub-committee on infrastructure will take a deep interest in it.

Michael McCarthy (Cork South West, Labour)
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Mr. Mullins has read the report compiled by the committee earlier this year. It recommended poverty proofing of bills, waivers and so on. Has that been done or will it be done?

Mr. John Mullins:

We have a certain experience of it in the industry. The committee will be aware that there are fuel allowances and exemptions in the energy sector. We are keen to find an answer to it in the context of the billing process. Will we be dealing with the Department of Social Protection in the context of allowances and individuals who qualify for a reduced payment? The issue of free allowances was commented on and it is one for a policy decision and legislation. I suggest poverty proofing is an issue for legislation, one on which we need political guidance.

In terms of what we can do, whatever solution is put forward we, as engineers, are confident that we are able to put something into a billing system that fundamentally will meet the requirements of the policy.

Michael McCarthy (Cork South West, Labour)
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When Uisce Éireann is up and running, how many staff will work for it? There is a need for a skeleton management structure of accounts, personnel, human resources. I would relate this to Telecom Éireann, ESB, Cork County Council or the forestry service years ago where there were X amount of staff in different towns working directly for those semi-State companies and statutory and non-statutory boards. How many staff will work for Uisce Éireann when it is fully functioning?

Mr. John Mullins:

We must achieve a clear demarcation between the local authorities and ourselves to fully determine how many we will need at the centre and at regional centres across the country, and how many will remain within the local authorities. That is a key element.

There are over 4,000 staff in the water sector in the country. That does not take into account the number of private contractors who are working in the system. On Bord Gáis Networks, for example, in the 1980s we would have had thousands working in the networks business. Many now work with contractors and, effectively, they have moved to contractors only in the past ten years. There are in the region of 550 staff working in Bord Gáis Networks to cover the totality of our Northern Ireland assets and Republic of Ireland assets. That has been enabled by the ability to put in new technologies to be more efficient in meeting those requirements. We have 13,000 km of pipeline in our networks business. In this instance, we are talking about 25,000 km of pipeline. There are significantly more assets and chemical engineering involved at a local authority level. In terms of operations, the main population of employees will remain with the local authorities. Without pinning myself to a number, we are looking at in excess of 500 and possibly fewer than 1,500. It will be a matter of where the dividing line between the local authority and Irish Water will be, particularly at a regional level.

Michael McCarthy (Cork South West, Labour)
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If, on a job, there are staff from the local authority working under service level agreements, how many staff of equal status, in terms of grade of employment, terms and conditions, etc., will there be? Will there be a one-for-one match? Will it be bigger than that? Will there be a situation where there will be a parallel number of workers, some of whom work directly for Uisce Éireann and some of whom work under SLAs through the local authorities?

Mr. John Mullins:

It must be worked out. In essence, in our own system at a regional level, whether it is Cork, Dublin, Limerick or Waterford, there are grades and a grade is given based on a competency assessment for the job.

We have discussed this with members of the local authorities. The pension issues in local authorities complicate matters for somebody from the local authority to come into a commercial semi-State company because the pension arrangements are very different, and that is a fundamental barrier. That is why in the initial period we are talking about secondments so that the employees of the local authorities retain their pension rights within the local authority but carry out their functions on behalf of Irish Water because their skills are appropriate to Irish Water.

We will have direct recruits. There will be the option for local authority engineers, technicians and operatives to move over on a regional basis to Irish Water structures and they will be assessed on the basis of grades that are in place within the local authorities.

Michael McCarthy (Cork South West, Labour)
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Deputy McLoughlin has a final question.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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I asked earlier about the appointment of 150 to 200 local contractors to install the boundary boxes and meters. When does Mr. Mullins propose that some of these contractors would be appointed? Will there be some in each county or region, or what will be the format?

Mr. John Mullins:

I suspect there will be SMEs in every county. I ask Mr. Cowhig to clarify that is the intention.

Mr. Ger Cowhig:

The plan is that we would work with the Department to create these panels across a number of regions across the country. The plan would be that when we would appoint the main contractors for a region, they would call off that panel to get the work executed.

Michael McCarthy (Cork South West, Labour)
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Would Mr. Cowhig be appointing them by region?

Mr. Ger Cowhig:

We would be appointing regional contractors to manage and execute the work. Those regional contractors would draw off that panel to execute the work on the ground.

Caít Keane (Fine Gael)
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Does the panel apply to the Department?

Mr. Ger Cowhig:

Yes. They will hear much more communication about it when it is due to start. It will be another month or two before we go out into the public domain to look for the creation of that panel.

Tony McLoughlin (Sligo-North Leitrim, Fine Gael)
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What is the timeframe? Is it within the next month?

Mr. Ger Cowhig:

Within a couple of months I would think.

Mr. John Mullins:

Within the next two months these plumbers and fitters in all of the districts and constituencies will be communicated with. They will have ample communication to be invited to be part of the panel to meet the requirements of metering and boundary box installation.

Caít Keane (Fine Gael)
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I do not understand how they will be communicated with. Obviously, they must apply first to get their name in.

Mr. John Mullins:

It will be through the national press.

Michael McCarthy (Cork South West, Labour)
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Will publicjobs.ie be used?

Mr. John Mullins:

publicjobs.ie is ordinarily used by the Department of the Environment, Community and Local Government anyway. We are conscious of this. All channels available to us in terms of maximising awareness among those contractors will be applied. We are not in charge of that initial process because we do not have the legislative capability to do it. That is why the Department will be doing that in the first instance. The panel will get transferred, as well as the regional contract appointment that we will put in place.

Michael McCarthy (Cork South West, Labour)
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Will there be regional depots?

Mr. John Mullins:

Yes.

Michael McCarthy (Cork South West, Labour)
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I thank Mr. Mullins and his colleagues. It was a good exchange in which there were many questions asked and many meaty answers. There was much detail in those answers. I thank the witnesses for that level of engagement. It is appreciated.