Jan O'Sullivan (Limerick City, Labour)

I thank Deputies for raising this issue and I am happy to respond on behalf of the Government.

The overarching objective of our water reform programme is to put in place structures and funding arrangements that will ensure we have a world class water and waste-water infrastructure that meets all environmental and public health standards, can attract foreign direct investment and support job creation and maintenance in key sectors such as pharma-chem, IT and food and drink. Last December, on the basis of the recommendations of an independent assessment, the Government decided to establish a public water utility company, Irish Water, to take over the operational and capacity delivery functions of local authorities in the water services area. Further consideration has been given since then to whether Irish Water should be established as a new entity or whether existing bodies in the semi-State sector could undertake the functions. The outcome of this analysis is that Irish Water should be established as an independent, State-owned company within the Bord Gáis group. Irish Water will be a public utility, wholly owned by the State. I am anxious to reassure Deputy Nulty in that regard.

Establishing a new water utility under the umbrella of a mature semi-State company makes best use of existing resources and capabilities. This approach is also in line with Government plans to support economic growth by eliminating waste and duplication in public spending through rationalising State agencies. Bord Gáis Éireann has key capabilities that can be brought to bear in the establishment of Irish Water, including experience in operating as a utility in a regulated environment and a track record in raising finance, and has specific skills from its experience of transformation, customer relations, network management, metering and utility operation that can be quickly deployed to assist in the successful establishment and operation of Irish Water. The skills within the Bord Gáis group will be paired with experience and commitment to service in local authorities and the specific water and waste water capabilities that exist in local government to build the new organisation. In the initial phase, Irish Water will work largely through service level agreements with local authorities. It is envisaged that these arrangements would end in 2017 at the earliest. This will ensure a smooth transition to the new model and guard against the loss of local expertise. It will also mean the majority of staff will remain in the direct employment of local authorities for a considerable period.

The Government has decided that when charges are introduced, they should be based on usage, reflect a free allowance and have specific measures for people with affordability issues. This is the fairest and most equitable way to introduce charging.

Meter infrastructure installation will commence by the end of the year and the programme will be rolled out on an accelerated basis. This programme will create up to 2,000 jobs. Households will not be asked to pay for these meters or their installation through an upfront charge.

The details of the funding model, including decisions relating to the precise charging framework, the level of charges, the free allowance and measures to address the needs of those with affordability issues or medical needs, have yet to be finalised. These will be a matter for the regulator, who will be required to act in the best interests of the consumer and will engage in appropriate public consultation as the process develops, and for Government through the budgetary and Estimates process.

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