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

I recognise and respect the spectrum of views that people have in this House and across the country on the provision of domestic water and how we fund it. This is a very political and emotive issue for many people. However, as a country, we have allowed ourselves to be convulsed by a negative and divisive debate in respect of it for far too long. My focus on water since taking office as Minister almost a year ago has been to put a process in place that could move us on from political division and uncertainty and to achieve a majority consensus to progress a new approach which responds to the various political viewpoints while delivering a water service infrastructure that meets the needs of our society, our growing economy and fulfils our environmental obligations. Therefore, I welcome the report of the Joint Committee on the Future Funding of Domestic Water Services. It provides a sound basis for Ireland to move forward on this issue in a sustainable way.

Let us remind ourselves of the process by which the committee reached this point.

The terms of reference for the special Oireachtas Committee on the Future Funding of Domestic Water Services were quite clear: it was tasked with considering and making recommendations on the report of the expert commission which was published in November last year. It is also worth reminding ourselves what the independent expert commission recommended. It proposed that the funding of water services for normal domestic and personal use should be out of taxation. It also recommended that excessive or wasteful use of water should be paid for directly by the user at tariffs determined by Commission for Energy Regulation, CER. It recommended that excessive or wasteful use of water should be discouraged by charging for such use and, therefore, be consistent with the polluter pays principle, and it recommended that measurement by meter is the optimal approach to managing consumption.

The expert commission argued that this model would provide for clarity around long-term investment, support the application of the polluter pays principle and meet the requirements of basic equity and fairness and to ensure Ireland complies with EU Water Framework Directive.

I believe the expert commission's report was correct and has provided the basis for what has now been agreed in the committee report. I thank Mr. Kevin Duffy, in particular, but also everybody else who played a part in the expert commission.

The European Commissioner, Karmenu Vella, in his latest letter to me on 12 January this year, also emphasised the central importance of cost recovery and encouraging sustainable consumption through metering to our future funding model. The final paragraph of the Commissioner’s letter is worth quoting for the record for clarity purposes. It states:

The European Commission encourages therefore the Irish authorities to give particular attention to the following key issues which, taking into account the specific circumstances of Ireland, and at the same time striking a fair balance between the interests of the consumers and the needs of the water sector, are indispensable for an outcome that complies with the Directive:

- the recovery of costs must ensure that the Irish water sector meets its serious needs in terms of both maintenance and investment in water and waste infrastructure

- in order for the charge on excessive or wasteful use of water to attain its purpose, the consumption of water for normal use should be set at a reasonable level, and the charge for excessive or wasteful use of water should be dissuasive [which is a term used in the report]. The completion of metering will be instrumental to this effect.

Since it began its deliberations in December, the discussions at the committee have been wide ranging. It has had the benefit of inputs from regulators from other jurisdictions, our own policy makers and regulatory bodies and other stakeholders from across the water sector. As the work of the committee moved towards conclusion and draft text was presented for discussion there have been robust and, on occasions, quite fraught exchanges.

Fine Gael and the Government have come to this process willing to engage constructively and to seek a compromise outcome that respected people’s differing perspectives while meeting certain fundamental requirements and obligations. What Fine Gael members of the committee have been trying to do for the past four months of intensive discussions at the committee is ensure that the final report clearly reflects these fundamental requirements. They did this for a number of reasons, not least to make it clear to the European Commission precisely how Ireland intends to go about meeting our EU obligations. However, more importantly, the Fine Gael members want to be clear with the Oireachtas and with the Irish people, in an upfront and honest manner, how the changed water funding model will work for families and their households.

Early drafts of the report last week raised significant concerns for the Fine Gael members of the committee and, more broadly, for me and the Government. I believe, on the basis of legal advice available to me, that last week's amended report would have clearly failed to satisfy our EU obligations with a significant consequence in terms of potential EU fines which the Irish taxpayer would ultimately have to fund.

I am very pleased that the report has come back on track with the benefit of further committee legal advice around certain key aspects of that report. The committee has now agreed that households responsible for the wastage or excess usage of water would be required to pay but that a generous allowance would apply for households consuming normal volumes of water, paid for through taxation. It has agreed that average consumption would be determined independently by the Commission for Energy Regulation and that only households using 70% more than average consumption would pay an excess usage levy.

It has also agreed that the basis for measuring consumption would be the existing meters, both domestic as well as district meters, and that all new homes or refurbishments would be required to be fitted with meters. It has also agreed that all apartment complexes would be metered through bulk metering. This is particularly welcome given the number of apartments to now come under that new metering objective.

There are a number of facts from which we cannot hide. We require significant investment in our water infrastructure to address years of under-investment and support the modern economy we are trying to build. We cannot walk away from our obligations, including those we face under the Water Framework Directive. The European Commission will not tolerate continued non-compliance by Ireland and has indicated a willingness to go the distance to force Ireland into compliance through the European Court of Justice. We will face significant penalties should this happen and if we do not put an arguable case in place. We have an opportunity now to make responsible, long-term, sustainable decisions around how we fund our domestic water services.

Taking account of these, Fine Gael and I have always had five priorities from the outset of this process that we wanted to deliver: first and foremost, maintaining Irish Water as a single utility structure for the delivery of water services - I believe it is proving its worth now in that regard; second, increased funding certainty for future investment in water infrastructure; third, a conservation-based approach using meters; fourth, a charging system that is fair for households and that encourages sustainable consumption patterns; and, fifth, equitable treatment for people who currently pay for their domestic water through group water schemes as well as for those households who have already paid water bills.

I believe the report of the committee delivers on these in a reasonable and coherent way that will not only enable us to demonstrate compliance with our environmental obligations but will also secure a sound future for the delivery of high-quality water services to households throughout Ireland.

I have a serious responsibility to lead and to legislate for a responsible package that gets Ireland to where we need to be. Following the Oireachtas vote, my Department will then commence the drafting of a Bill on the basis of the report and will engage with the Office of the Attorney General as part of this process as I have committed to do.

I sincerely thank all the members of the committee for their input to the deliberations. I thank Fianna Fáil, in particular, for its willingness to commit to a process nine months ago and following through on that process. I think it is a victory for sensible politics.

I thank my Fine Gael members specifically for their resolve during the negotiations. Above all, I thank the Chairman, Senator Pádraig Ó Céidigh, for undertaking this role with calm authority and grace under pressure.

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