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.