Batt O'Keeffe (Cork South Central, Fianna Fail)

The national water services pricing policy framework provides for the recovery by sanitary authorities of the cost of providing water services from the users of those services, with the exception of water services provided to householders for domestic purposes. This policy is consistent with the polluter pays principle and the EU water framework directive. The policy fully respects the prohibition on charging for domestic water services as provided under the Local Government (Financial Provisions) Act 1997. It also requires full recovery of the cost of providing water services to the non-domestic sector by means of a meter-based volumetric charge and the metering of this sector.

The major part of the capital cost element of water services schemes relates to domestic water services and is funded by my Department through the water services investment programme. The marginal capital costs are recovered from non-domestic users on a consolidated countywide basis over a period of up to 20 years. A fair and transparent mechanism is used in determining the appropriate level of non-domestic capital costs to be applied to water services projects, including sewerage schemes.

This is identified by sanitary authorities on a scheme-by-scheme basis with the methodology used and the resultant outcome closely monitored by my Department to ensure equity in the application of the policy. My Department has worked very closely with sanitary authorities in developing the charging mechanism and the conditions that apply to pricing policy. A mechanism for the calculation of charges that includes operational, marginal capital and administrative costs has been developed and rolled out to authorities. The unit cost of water services will invariably differ between sanitary authorities given the differences in the costs of water services provision across different local authority areas.

The Achill Sound sewerage scheme referred to by the Deputy has been approved for construction under my Department's water services investment programme 2005-07. In common with all projects funded under the programme, this scheme must be progressed consistently with the water services pricing policy. Local authorities must ensure the design and scale of individual schemes takes account of the implications of the pricing policy framework. This involves my Department funding the capital costs associated with the provision of services to meet the requirements of the existing domestic population together with a contribution of up to 40% for serving the additional future domestic population.

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