Ms Emma Kennedy:

Dublin’s residents and businesses are facing huge problems with their water supply and those problems need addressing now. The problem is not a lack of water, only around 43% of the water put into Dublin’s water supply system each day is actually used. Dublin’s problems are: excessive leakage; water outages, Dublin’s pipes are so old and fragile that when they come under an extra stress such as during a cold snap, they give way leaving Dubliners without water; unreliable water quality, where in low pressure situations contaminated groundwater can leak back into the pipes carrying clean water to Dubliners’ taps, which Irish Water calls a public health risk which it has to offset through extra chlorination, and; lack of diversification, Dublin currently gets 99% of its water from rivers, leaving Dublin vulnerable.

There is a perception that pumping water from the Shannon to Dublin would fix Dublin’s problems, that perception is wrong. The Shannon would offer no diversification away from river water, and the only thing that can stop Dublin having water outages and suffering from water ingress is replacing its pipes.

Irish Water’s mains replacement target is just 1% per annum, meaning some of Dublin’s pipes – which are up to 140 years old - will not be touched for another 100 years. 1% per annum might be viable for the maintenance of an efficient water supply system, such as those in Paris and Frankfurt, where leakage is around 7%, but it is not viable for Dublin. Dublin’s water mains do not need maintenance, they need a major overhaul and this will soon become unavoidable, regardless of whether or not the Shannon project proceeds.

Over the past two years Kennedy Analysis has produced two separate but related sets of reports. The first set focuses on Dublin’s water pipes. For years, a key weakness of Dublin’s water supply system was its water treatment plants. Many here present will be familiar with hearing that the treatment plant at Vartry has not been able to cope with an algal bloom. It is important to be clear that Dublin’s various water crises were not caused by shortages of raw water, but rather by infrastructure issues that impaired its ability to treat and deliver that water. Happily, every major treatment plant serving Dublin has either been upgraded in the last five years, or, in the case of Vartry, is about to be upgraded. Dublin’s water pipes on the other hand remain in a third world state of decay, and this is now the key issue undermining Dublin’s water supply.

The other set of analysis focuses specifically on the Shannon project. We have reviewed thousands of pages of reports going back through the 22 year life of this project. Four of those reports made projections of the growth in Dublin’s water demand. The earlier reports are now known to have contained errors and to have overestimated the growth in Dublin's demand. One report overestimated the growth in Dublin’s water demand by over 470%. The latest set of analysis is no different. It contained three key errors which, once corrected, established that there is no need for a project of the scale of the Shannon pipeline. Full details of each of these are provided in the bundle that I believe members have in front of them, but the following is a brief explanation of these.

The first error related to the data that was used for industrial demand or non-domestic demand. The intensity of industrial water demand in Ireland has been on a downward trend since 1995, the year before this project began. It has been stated repeatedly that the data used in the analysis for the Shannon project took account of that decline. However, the data that was actually used took no account of that decline and was produced using an outdated method that is not considered international best practice and of which Irish Water’s own independent economic adviser has been highly critical. This has a significant impact on the bottom line.

The second error related to the data that was used for what is known as "customer side leakage", which relates to leaks from inside people’s homes and under their gardens. The analysis for the Shannon project stated that, in 2011, total customer side leakage was 41 million l per day. However, the recent first-fix scheme has proven that this cannot have been right. The scheme has so far identified 35,000 major customer side leaks in the water supply area. To date, only 40% of those have been fixed but over 38 million l per day of water has already been recovered. Given that 38 million l per day was being lost through just 40% of those leaks, it is clearly impossible that the total volume of leakage was only 41 million l per day in the first place. To state that again: 38 units is what they have saved and 41 units is what they assumed was being lost in the first place. Our analysis extrapolates that once the hundreds of thousands of smaller leaks are also accounted for - along with leaks in homes without functioning water meters - the correct figure must almost certainly have been at least 100 million l per day. This has a major impact on the bottom line because, even assuming nothing more than Irish Water’s current leakage targets, an additional 59 million l per day of water will become available at Dubliners’ taps by 2050 instead of being poured into the ground.

The third error related to double counting. The analysis for the Shannon project is a supply-demand equation. It calculates the amount of water that will be available for supply each day, on the one hand, and the anticipated daily water demand, on the other, to determine whether there will be a surplus or a deficit in 2050. However, in its treatment of outages in particular, the calculations for the Shannon project added in provisions to the demand side while simultaneously deducting provisions for exactly the same thing from the supply side. This is double counting and mathematically invalid.

Once the errors in Irish Water’s analysis have been corrected, it is clear that the Shannon project is mathematically unnecessary. A smaller and less expensive non-river water solution would secure Dublin’s water supply and provide it with much-needed diversification away from river water. This assumes nothing more than Irish Water’s current leakage targets. It uses Irish Water’s data for all other inputs - for example, population growth - and assumes that no more water will be extracted from Dublin’s existing water sources than is assumed in Irish Water’s own analysis. If, instead of its existing targets, Irish Water was to adopt ambitious mains replacement targets, which are long overdue for Dublin in any event, then the case for the Shannon project would be undermined yet further.

It is vital that major projects such as the Shannon pipeline are subjected to rigorous analysis. Spending €1.3 billion on a project that is not needed means that €1.3 billion is not available for projects that are needed, such as replacing pipes in Dublin. The numbers for the Shannon pipeline do not add up - there is no investment case - so it is vital from the taxpayer’s point of view that it does not proceed. At the same time, the risks to which Dublin’s residents and businesses are currently exposed because of its ancient water pipes and almost total reliance on river water must be addressed. Irish Water’s 1% mains replacement target must be challenged and there should be a fresh review of non-river water supply options in the context of correct demand figures.

One final point to note is that Kennedy Analysis found that the consideration that was given to groundwater, or wells, as an alternative water supply option for Dublin was seriously flawed. We provided the committee with a summary of that in advance of today’s meeting. I am very happy to take questions about that or, indeed, about anything else.