Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

I did not interrupt Deputies opposite and I ask that they afford me the same courtesy. The Minister, Deputy Brendan Howlin, gave that commitment in November last year, an undertaking I reiterated during the debate in the Seanad. In addition, the Taoiseach indicated today that not only would the freedom of information provisions apply to Irish Water but they would be retrospective to the very first day on which money was laid out.

Ireland has a valuable natural resource in the level and quality of fresh water available to us. This resource must be protected and valued. A high quality water supply is critical to the health and well-being of our citizens, the environment and the economy. The programme for Government includes commitments to introduce a fair funding model to deliver clean and reliable water, establish a new State-owned utility to take responsibility for water infrastructure and implement a charging system based on usage above a free allowance. Moreover, in the programme of assistance agreed between the previous Government and the EU-ECB-IMF, commitments were also made to introduce domestic water charges and establish a single national water company.

The provision of water services is expensive, costing in excess of €1 billion per annum. However, under the previous funding arrangements prior to the enactment of the Water Services (No. 2) Act 2013, only approximately 15% of the costs were directly paid by the users of the services. Indeed, the independent assessment on establishing a public water utility, conducted by PricewaterhouseCoopers, found that the dependence on the Exchequer for capital funding had in the past constrained investment in the sector. That report was written on the assumption of annual investment levels of €600 million per annum.

If we are to deliver the water services our citizens deserve and attract industry to provide jobs, we must increase the investment in infrastructure. The introduction of a new, more sustainable funding model will help to secure the level of investment required to upgrade, repair and expand our public water and wastewater infrastructure. In addition to the environmental benefits, this will provide significant opportunities for job creation. The establishment of Uisce Éireann is an important step for Ireland as we modernise the way we deliver services.

The Water Services (No. 2) Act 2013, which came into effect on 1 January 2014, provides for the transfer of water services functions from 34 water services authorities to Irish Water. The new utility company was established in July 2013 as a subsidiary of Bord Gáis Éireann.

These were two important milestones for the programme of reform of water services in Ireland. The reform programme offers opportunities to achieve significant efficiencies in the way water services are delivered, including providing a co-ordinated national approach to the delivery of water services, achieving economies of scale in service delivery, achieving cost savings through centralised procurement, reducing the unacceptable level of water that is unaccounted for, reducing operational expenditure for water services, and improving the collection levels of water charges in the non-domestic sector.

The move towards the utility model will deliver significant benefits for Ireland. From an economic perspective, a greater security of supply will help make the economy more competitive and attractive to companies that operate in the ICT, pharma-chemical and agrifood industries, which are water-intensive in nature, to invest here. In addition, an increased focus on water management should encourage innovation in this area, thereby providing indigenous Irish businesses with opportunities to tap into a growing global water sector which, it is predicted, will be worth €1 trillion by 2020. There will also be significant benefits to the environment through reduced consumption and this, in turn, will lead to reduced costs of treatment and lower greenhouse gas emissions.

The establishment of Uisce Éireann within the Bord Gáis Energy, BGE, group allowed it to leverage the core expertise of BGE in operating a successful and efficient utility. From the outset, BGE was in a position to put in place a programme to establish Irish Water and utilise internal expertise across a range of areas, including ICT, procurement, asset and financial management, customer operations and corporate governance. The establishment of Uisce Éireann involves costs and, as outlined by representatives from the company at yesterday's meeting of the Joint Committee on Environment, Culture and the Gaeltacht, a significant level of expenditure was required to get Uisce Éireann operational within a very short period. The overall budget for the establishment of Irish water is €180 million, which includes a contingency of €30 million. The budget is being funded by a commercial loan which Irish Water has arranged with the National Pensions Reserve Fund, NPRF. There has been a suggestion that the Minister for the Environment, Community and Local Government, Deputy Hogan, deliberately withheld details of the establishment costs of Irish Water from Deputies. This is simply not the case. The total budget for the establishment of Uisce Éireann is €180 million, which includes the contingency of €30 million to which I refer. While the overall budget was outlined to the Economic Management Council and the water reform sub-committee of the Cabinet committee on economic infrastructure, no Exchequer funds have been provided to date to Bord Gáis or Irish Water in respect of these establishment costs.

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