Alan Kelly (Tipperary North, Labour) | Oireachtas source

I move amendment No. 36:

In page 12, between lines 10 and 11, to insert the following:"(3) The Minister may request the Minister for Finance to make payments up to a total amount of €460,000,000 to local authorities for the purpose of repaying any Housing Finance Agency water related loans under section 5 of the Housing Finance Agency Act 1981 held by local authorities. The Minster for Finance shall make any such payments, subject to such conditions (if any) as he or she may determine, out of the Central Fund or the growing produce thereof.".

Section 10 provides that where the Minister makes an order to provide that the water services property is transferred from a local authority to Irish Water, any financial loans associated with the property are not automatically transferred to Irish Water. This section is being introduced to facilitate a more efficient transfer of water services assets and liabilities from the various local authorities to Irish Water. Under the current legislative arrangements provided for in the Water Services (No. 2) Act 2013, the Minister may designate by order water services property for transfer to Irish Water. Any liabilities, including loans, relating to such property would also automatically transfer on the same date.

In preparing for the transfer of property to Irish Water, it has become apparent that there are some issues with the automatic transfer of loans. For example, many of the loans taken out by water services property do not clearly specify the assets to which they relate. As such, it is not clear which loans would transfer to Irish Water. In addition, another important factor was the Government's decision that the debt owed to the Housing Finance Agency, HFA, should not transfer to Irish Water. Instead, these HFA loans, which are currently counted as part of the Government debt, will be unwound by the provision of the necessary finance from the Central Fund to the relevant local authorities to repay the HFA. Non-HFA liabilities, including loans, will be transferred to Irish Water as specified water services liability in accordance with section 14 of the Water Services (No. 2) Act 2013. This will provide a clear and more transparent process for the transfer of water services loans to Irish Water. The section provides that any transfer of property by the Minister shall not be treated as a disposal of property by the local authority. This is to ensure there is no adverse impact on the financial standing of the local authorities from the transfer of assets to Irish Water.

This amendment proposes to allow the payment to local authorities of €460 million for the purposes of repaying any HFA water loans. It is not proposed to transfer this debt to Irish Water as this would impact on Irish Water's debt-raising capacity with interest payable potentially impacting on it. As HFA loans to local authorities are already counted as part of the Government debt, it is now proposed to provide for the unwinding of this HFA debt. This will include the payment of funds to local authorities from the Government and this will be used to repay the loans.

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