Mr. Paul McGowan:

I would like to respond to the more general point that was made about whether the existence of a standing charge would have an impact on Irish Water's ability to access finance. Various potential tariff structures are used in other jurisdictions across Europe. Payments can be based on rateable value, for example, or purely based on consumption. It is clear that one of the stated aims of water charging in Ireland is to reduce overall consumption and thereby conserve water, which is a precious resource. One could argue that a water charge which is purely based on quantity is a rational response to that goal. Equally, we would have argued in favour of a system that takes account of the fact that a zero cost is not associated with dwellings that are not primary residences and have zero consumption. One would expect that there would be a level of consumption in all households with residential occupancy, but there might not be any consumption in premises with no residents. It is important that a minimum charge is associated with those premises.

On the specific question of Irish Water's ability to attract finance regardless of whether there is a standing charge, the feedback we have got from the ratings agencies indicates that the foremost issue is the stability of the regulatory regime. One of the key areas we addressed early in this process was what the overall regulatory regime would look like. When we issued our advice to the Minister - that has now been published - we focused on the idea that we would go through six-year revenue controls and identify a reasonable return and a reasonable cost of debt, etc. That indicates to rating agencies and the wider capital markets that the utility has a reasonably robust revenue stream in order to meet its funding commitments. I would contend that the markets look at that level of information, rather than the minutiae of particular tariff structures. My colleagues might have other points to make in that regard.