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.