Alan Kelly (Tipperary North, Labour) | Oireachtas source

To address these legacy issues, to invest for the future and to provide consistent customer service across the country, Irish Water needs to invest around €600 million every year. It has to be able to do this itself independently of the Government of the day so that it is not in the same queue as hospitals, schools and welfare benefits for funds. Throughout our deliberations, we have been careful to ensure that Irish Water's cost base, revenue and Government subventions are structured so that it continues to qualify under EU rules as a "stand-alone" market corporation. If we failed to achieve that, the enormous annual cost of the investment needed in our water services would fall back on the Exchequer. We will achieve this by exempting Irish Water from local authority commercial rates. This will reduce the subvention required and more than compensate for the loss of income because of the new charges. Local authorities will be compensated directly by my Department for the loss in rates revenue.

As a result of the strategic approach we are taking, the CER has approved Irish Water's capital spending programme to the end of 2016 and the company is working on a five-year investment plan and a 25-year plan. Priorities include water for the midlands and the greater Dublin area. This is a major project to secure future supply for the majority of our population. Otherwise, this city will literally begin to run out of water. It is my aim to announce the details of this project in the first half of next year. Another priority is addressing "boil water" notices. In the very near future, for the first time in many years, people in Roscommon will be able to drink water from their tap. What did previous Governments do about that? The answer is absolutely nothing. Another priority is the Ringsend treatment facility upgrade. In this one project alone Irish Water through its expertise will save the full costs of its establishment. This is a saving of €170 million. It was previously priced at €350 million.

Very few people can or would buy or build a house without a mortgage. Paying for each brick out of their monthly pay cheque would not be sensible. Investment runs on finance, especially when it comes to water which requires huge capital. I will give some other examples of borrowing by our State utilities. The ESB borrowed €7 billion over seven years and invested in our electricity infrastructure. That is the same infrastructure that allows the running of data centres and other key multinational employment centres. We have some of Europe's best infrastructure for electricity. Similarly, Bord Gáis inherited the completely outdated infrastructure of Cork Gas, Limerick Gas and Dublin Gas. By creating a national utility that could borrow and invest in the infrastructure, we now have a modern and efficient gas system.

I have previously acknowledged that we made mistakes. I have also acknowledged that Irish Water itself made many mistakes. To date, the Government and Irish Water have been operating to demanding timelines that underestimated the scale of the endeavour in moving from delivery by local government to a fully regulated public utility in such a short space of time. In short, we tried to do in three years what other countries did in five to ten years. In advance of the completion of the metering programme, the charging regime was overly complex, it was not well understood by the public and it created uncertainty for customers regarding their bills in 2015 and beyond. However, the package I am announcing today corrects those mistakes. It gives every citizen of goodwill - every customer of Irish Water - a firm, fair and affordable basis on which to move forward to a better future where we will have a national water utility that will be a world leader in its field and of which we can be proud.

This package will be seen as fair by the vast majority of our people. It will be accepted as fair by the many people who have borne a burden of austerity but who aspire to a better life for themselves and their families and indeed a better Ireland for all future generations.

This is a new beginning for Irish Water but, above all, for their customers and potential customers. The key principles we are delivering on today are certainty, simplicity and affordability. I have listened very carefully to the people of Ireland.

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