Paul Murphy (Dublin South West, Socialist Party) | Oireachtas source

Would the Minister not agree, at least on a theoretical level, that it would make Irish Water a more attractive option for any future major multinational corporation seeking to buy it in the context of a future privatisation? The money that is to come from the Department of Finance to the local authorities does not deal with the fundamental question. It is a transfer from one part of the State to another, but the semi-State company is being created with assets and lesser liabilities and it has the potential to be privatised in the future. Does the Minister not accept that there is a good reason for people to have concerns about it?

Already, creeping significant privatisation is under way in our water services in the form of the design, build and operate, DBO, model. Major multinational corporations which would like to buy our water services in the future have 20-year contracts to design, build and operate improvement schemes, sewerage schemes and water treatment plants throughout the country. Large parts of our water infrastructure are already being taken over by the private sector through DBOs on the basis of profit with no interference by the State, public or taxpayer in those 20 years, after which, presumably, another 20-year contract will open up. The purpose of the magic, off-balance sheet operation in which the Government is engaged is to make it easier for Irish Water to borrow money on the international markets. The Government is trying to create the impression that there is free money out there, that if one takes Irish Water off balance sheet one will be able to generate money one would not otherwise be able to generate. People understand that any money Irish Water borrows must be paid back by the people through water charges.

People have Detroit in mind, given that the Detroit Water Brigade was here. Detroit Water was not privatised, but had a fund-raising model that was akin to the model the Government proposes for Irish Water, a model of borrowing off balance sheet through international bondholders. Although, formally speaking, Detroit Water was in public ownership, the primary way the agenda of water privatisation was pursued, resulting in the shut-off of water to tens of thousands of people, came from the role of the bondholders in the off-balance sheet finance. Of every dollar Detroit Water collected in revenue, 50 cent went to the bondholders and the key demand for the shut-offs came from the bondholders and the credit rating agencies. This is the positive story of what the Government is proposing. This is why it has such a section to make it easier for Irish Water to borrow on the international markets. This is the Trojan horse of water privatisation. Water privatisation will be pursued through the DBOs and the funding model well in advance of the actual potential privatisation, if this or any future Government were to get away with it.

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