Ms Geraldine Tallon:

It is a significant development and it is very important that we continue to invest significantly in water services as part of our economic recovery. Unfortunately, due to economic circumstances, we have seen a reduction in the level of investment we have been able to make in water services over the past number of years. Our level of investment is of the order of approximately €320 million for 2013. This is insufficient investment, both to maintain the existing quality of the infrastructure we have and to invest in new infrastructure, water conservation, etc.

PricewaterhouseCoopers conducted an exhaustive advance study on the investment needs for the water sector and its view and ours is that we need to invest at a steady rate of approximately €600 million per year in order to allow for replacement and expansion and to meet economic and environmental needs. That is the approximate investment that will be required for the foreseeable future on an annual basis. There is, of course, a very extensive infrastructure and asset base in the local government system currently. However, there is also a liability associated with that because water services are an area of ongoing capital investment. Therefore, we have an extensive job of work going on in local authority finance and water departments currently to identify, quantify and extract the asset and liability position of the local government system. This is relevant in regard to the overall future capacity of Irish Water.