Noel Ahern (Dublin North West, Fianna Fail)

I thank the Deputy for raising this matter. The Scarriff, Feakle and Quilty sewerage scheme, which includes Mullagh and the Carrigaholt, Labasheeda and Cooraclare scheme are being procured as two separate group projects. They are approved for construction in my Department's Water Services Investment Programme 2004-2006 and are part of a package of more than 20 water and sewerage schemes, serving almost 40 different areas in the programme for County Clare with a combined value of nearly €194 million. Clare County Council's contracts documents for the Feakle, Scariff, Quilty scheme are with my Department for examination. The council has also submitted an updated preliminary report for the Carrigaholt, Labasheeda and Cooraclare scheme to the Department.

To allow the contract documents for the Scarriff, Feakle and Quilty scheme to be fully examined, my Department asked the council in February 2005 to submit a revised water services pricing policy report. The importance of this report was pointed out to the council since it plays a critical role in determining the overall economics of all water services schemes being funded by the Exchequer.

The water services pricing policy report sets out the proportion of the cost of a scheme that has to be funded by contributions from the non-domestic sector in accordance with "the polluter pays" policy. Broadly speaking, that policy provides for the capital costs associated with the provision of services to meet the requirements of the existing domestic population being funded by my Department, with an allowance for organic growth. The additional marginal capital cost of servicing non-domestic consumers, and providing for future development, is recovered by the local authority from all non-domestic consumers in its functional area through a combination of water charges on commercial consumers and planning levies on future development.

A preliminary assessment by my Department at that time indicated the likelihood of excessively high costs of servicing individual dwellings in the three locations. The cost per house in Feakle would have been €33,134; in Scarriff, €18,587; and Quilty, €56,410. On that basis it seemed unlikely that the scheme would be economically sustainable, unless a significant proportion of costs were appropriately attributable to the non-domestic sector with a resulting significant reduction in the cost of the domestic share of the scheme. In this context it is worth noting that a householder can provide a proprietary single house treatment system at only a fraction of these figures and this is the yardstick by which the installation of sewerage facilities from the public purse has to be assessed. In disbursing Exchequer funding, my Department has to be conscious of value for money principles. It cannot approve a scheme where the costs simply cannot be justified by comparison with other potential solutions.

Clare County Council responded to the Department in June when a revised water services pricing policy report and economic assessment were received. These have been examined in the Department but the revised unit cost per existing house to the Exchequer, after deducting the amounts estimated by the council to be due from the non-domestic sector, is €19,725 in Feakle; in Scarriff €12,307; and in Quilty €27,549. In the case of the Carrigaholt, Labasheeda and Cooraclare scheme, following examination of the preliminary report, the Department wrote to the council in November 2004 outlining a number of issues that needed to be reviewed. Of particular concern again was the high average cost of serving each house to be connected to the scheme. The cost per house in Labasheeda would have exceeded €83,000 with equivalent costs in Cooraclare and Carragaholt of €53,000 and €74,000, respectively.

Clare County Council responded with a revised preliminary report and water services pricing policy, polluter pays, report in May. In view of the figures emerging from the proposals put forward to my Department, a new more innovative approach will have to be adopted by the council to come up with schemes that can be provided at more acceptable costs to the public purse. Both my Department and I are anxious for an economical solution to be found. Against that background the Department wrote to the council about both schemes last week. The Department pointed out that the schemes, as currently designed, were not economically sustainable but emphasised that it was keen for the council to come up with alternative, financially viable proposals.

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