Stephen Donnelly (Wicklow, Independent) | Oireachtas source

Section 3 is the key section for the legislation. There are three points I wish to raise and three questions I would like the Minister to address. I tabled amendment No. 17, which the Ceann Comhairle ruled out of order along with others. This regarded the seeking of a reduction in charges in charges for residents in towns where there is no wastewater treatment facilities. I provided the Minister with a briefing and the Environmental Protection Agency has identified 42 such towns. I will not read all their names but they include Cobh, Passage West, Ringaskiddy, Youghal, Killybegs, Arklow, Ballyvaughan, Clarecastle, Kilkee, Kilrush, Liscannor, Ballycotton, Castletownbere, Bundoran, Kilcar, Moville and Rush. The list goes on.

There is a clear precedent in place whereby Irish Water is providing two services, charging half the amount for each of them. If a house has a well, it does not pay for water coming in and if a house has a septic tank, it does not pay for water going out. There is another provision, which is if the water coming in is substandard, households do not pay for it. The proposal I put to the Minister was that when the service taking water out is substandard - just as the service bringing water in can be substandard - the relevant household would have the same derogation in charges and they would not pay for that water. Arklow is an example in my constituency and it is not simply the case that Irish Water can argue that wastewater is being taken from the house. It is taking the wastewater and dumping it into the Avoca river, which runs through Arklow town. It is not going anywhere and it is directly affecting those residents.

I tabled an amendment and in his introductory speech on the legislation, the Minister referenced these 42 towns, so I thought I was going to see a derogation put in place. That has not happened, although it is what amendment No. 17 would have done. The Minister tabled amendment No. 16, on which we just voted, which clarified that these 42 towns would pay for the wastewater removed. Even the legislation tabled by the Minister left some hope for these residents, as section 3(3) states, "Where a dwelling referred to in subsection (2), is in receipt of one service from Irish Water, that is to say either the provision of water services or waste water services, then the maximum charge that Irish Water may charge in respect of the dwelling is an amount that is 50 per cent less than the relevant amount mentioned in that subsection." That could be interpreted in a certain way by the people in Arklow and others. As they do not have the provision of full wastewater services, they would want that clause applied to them.

Rather than doing the right thing and providing that derogation, the Minister tabled amendment No. 16 which clarified and changed his own legislation to state:

Where a dwelling is in receipt of one service in respect of water services provided by Irish Water, that is to say-

(a) the supply of water from the dwelling, or

(b) the removal of wastewater from it,

That clearly clarifies the fact that from Irish Water's and the Government's perspectives simply removing wastewater from the dwelling is sufficient and it is reasonable to charge the full amount even if all Irish Water does is take that wastewater and throw it into the river behind one's house, polluting one's town.

What does the Minister say to the people of Arklow and all these other towns who say they do not have wastewater treatment facilities and they are not getting the service? There is a clear precedence in place where substandard water coming in is not charged for, so why is there not a similar derogation for a substandard wastewater treatment? What does the Minister say to the people of Arklow and people around the country who will be charged for that?

The second issue is around the charging regime laid out in section 3(2) and (6). The net amount raised from Irish households, when we bring in this section and the so-called conservation grant, will be €90 million or thereabouts per year. The meters will cost €539 million. That is usually spread over a 15-year period in a utility company, so the cost of the meters per year will be €36 million as against a net amount raised of €90 million. We now must add in the cost of reading the meters, the cost of billing and the cost of customer service.

I have checked with people who work with ulitity companies internationally. What they tell me is that at the low end, a really efficient operation, which I suggest Irish Water probably is not, costs about €60 per household to meter and bill. We are talking about 2 million households, so the cost of metering and billing to the State through Irish Water will be about €120 million per year, and that is a conservative estimate. The net amount raised will be €90 million. We will raise €90 million, put that entire €90 into the cost of raising it and then pay a further €30 million to raise the original €90 million. These are indicative figures I have from practices abroad.

Does the Minister have an estimate of the annual cost of billing, metering and customer service from Irish Water? Can he provide the House with the actual net gain of domestic charging, because we know the total amount raised will be €90 million? I believe it will cost €120 million to raise that €90 million, leaving us worse off by €30 million, but maybe the Minister has different figures. Maybe he has figures that say we will raise €90 million but it will only cost us €50 million or €20 million. What is the projected cost per year to Irish Water of raising this €90 million?

I refer to the investment model. When the figures going around the House were that about €15 billion or maybe €20 billion needed to be invested, I could see an economic case to continue to pay for the current water system out of current taxation but if we need an extra €15 billion, then maybe there would be a case, with all sorts of caveats in place, where an additional charge could be brought in to pay for the new investment only. Some people would not agree with that but I would have been okay with it. Then we got new figures which said the capital investment would only be €600 million per year for approximately the next decade. The latest figures we have are for 2010 when the total capital investment was €400 million, so this entire fiasco and all of this talk about the system falling over, reservoirs, lead pipes and all these bits and pieces is basically about moving capital expenditure from €400 million per year to €600 million per year. The total additional investment in the system, based on Irish Water's own figures, is €200 million per year.

Scottish Water reduced its cost base by 40% in the first five years so here is what is going to happen. In 2010, €1.2 billion was spent on water, with €400 million being spent on capital expenditure. In 2015, the total amount spent on Irish Water will go from €1.2 billion to €1.5 billion but the total investment will only go up by €200 million. That €200 million could easily have been found by reducing the cost base and by renegotiating these ridiculous 12-year service level agreements the Government put in place in January. It should have said we spend €1.2 billion on water right now and that we will create a common organisation called Irish Water in public ownership, take at least €200 million out of the cost base, which they have done in other countries, and reinvest that money in capital expenditure. Meters and charging would not be necessary. Why are we proceeding with a charging regime if the additional investment is only moving from €400 million to €600 million and that investment could easily have been found by reducing the cost base?

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