Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

The Government is committed to retaining Irish Water as a single national utility in public ownership responsible for the delivery of water and wastewater services. To build public confidence in Irish Water, I will be establishing an expert advisory body which will advise on measures to improve the transparency and accountability of Irish Water and to give the Oireachtas quarterly reports on its performance in relation to its business plan.

Some broad estimates were prepared in the context of recent Government formation discussions on the potential costs of abolishing Irish Water. It was estimated that one-off costs for staff redundancies, termination of contracts, transitioning to another model and so on could range between €85 million and €169 million. In addition, some €1.6 billion additional running and capital costs would arise over the period of the current Irish Water business plan to 2021 due to the fact that the efficiencies agreed in the context of that plan would be unlikely to be achieved in a return to a local authority model. From memory, the efficiencies planned for in the business plan over that period were €1.1 billion. Irish Water has already cut about 7% off its cost base in the past two years.

Abolishing domestic water charges would lead to an expected additional subvention requirement of up to €1.4 billion over the period 2016 to 2021, subject to assumptions on payment levels and without reflecting any costs of dismantling contracts. In other words, if domestic water charges were fully paid by everybody, that is the income that would have come to Irish Water. We also need to factor in the abolition of the water conservation grant which, over that time period also, could deliver savings of €660 million. That is costing the State about €110 million each year.

The Government has committed to establishing an expert commission to make recommendations for the sustainable long-term funding model for the delivery of domestic water and wastewater services by Irish Water. The commission will report to a special Oireachtas committee and consideration of recommendations on the funding model will ultimately be voted upon by the Oireachtas next year. In the meantime, I will introduce legislation shortly to suspend domestic water charges for a period of nine months, or three billing cycles, from the end of the current billing cycle, which is the end of June.

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