Mr. Paul McGowan:

Deputy Naughten also referred to other water quality issues and the fact that there is no discount. I wish to make it clear that if water is deemed unfit for human consumption, the 100% discount will apply. We are aware of other issues such as that relating to hard water. The advice is that such water does not represent a health risk to people and, therefore, no discount will apply in respect of it. The basic position is that if water is deemed and declared unfit for human consumption, then discounts will apply.

The Deputy stated that group water schemes have lower cost bases.

We do not regulate the group water schemes. Our job is to ensure that the costs Irish Water incurs are as efficient as possible. Our role is to drive those costs down. We have imposed 7% per annum reductions on the company in the first cycle and in the second cycle we will be looking at imposing even more stringent cost reductions.

There was a question about the incentive to reduce leaks. We have a function in respect of the conservation of water resources. The greatest area of water conservation is reducing leaks. This is why we will be examining Irish Water's investment priorities for capital maintenance and so forth, which includes leakages, but we will also examine other investment priorities. For example, raw effluent is still being discharged in some locations throughout the country. The incentive to bring about the reduction of leaks stems from the fact that if Irish Water reduces leaks, it will reduce costs, and if it reduces its costs, then it will be in a better position to meet its targets. Under the regulatory model we have imposed, the company will be incentivised to reduce leaks. We will be looking at further specific incentives relating to leakage rates once we have the associated data. One of the things we need to do in the coming years is gather a vast amount of data that are simply not available at the moment.

There was a question on whether it follows that if there is reduced usage the price will go up. That is not necessarily the case because many factors go into the determination of the price of water. For example, if water usage goes down then certain operational expenditure efficiencies could be associated which, in turn, would lead to lower prices. As well as that, we will be continuing-----