Dáil debates

Wednesday, 6 April 2011

3:00 pm

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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Question 10: To ask the Minister for the Environment; Heritage and Local Government the date on which he will establish Irish Water to take over water investment maintenance programmes in local authorities [6911/11]

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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Question 11: To ask the Minister for the Environment; Heritage and Local Government if redundancies in local authorities would be required by the setting up of a national water company [6832/11]

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 16: To ask the Minister for the Environment; Heritage and Local Government the steps he is taking to establish Irish Water; and if he will make a statement on the matter. [6726/11]

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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Question 20: To ask the Minister for the Environment; Heritage and Local Government if the planned new State company Irish Water will be sold off as part of the Government agenda to privatise State assets [6917/11]

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I propose to take Questions Nos. 10, 11, 16 and 20 together.

The programme for Government proposes the establishment of a new State-owned water utility company to take over responsibility for managing and supervising investment in water services infrastructure and to manage the domestic water metering programme. The memorandum of understanding between Ireland, the EU and the International Monetary Fund, IMF, commits Ireland to undertaking an independent assessment of the establishment of a water utility. I intend to proceed with carrying out this study as a matter of priority.

The transfer of functions from local authorities to a new water utility will require significant legal and administrative changes. The independent assessment will examine the proposed role and functions of Irish Water, the approach to assigning these functions to the company from the 34 local authorities and the optimal organisational structures for the company. Critical issues such as governance, value for money, financial viability and customer service will be key factors in determining the company's structure. It is envisaged that the independent assessment will be completed by October. I will prepare proposals for Government consideration toward the end of this year and I will provide further information as soon as I can.

Irish Water will be a State–owned company and there are no plans for its privatisation. The structures and indicative staffing complement required for Irish Water and the consequential effects on staffing at local authority level will be considered by the independent assessment and will be influenced by decisions on the functions to be assigned to Irish Water. The Public Service Agreement 2010-2014contains specific provision for redeployment arrangements for local authorities within the local authorities and to other public sector organisations.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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I heard the first part of the Minister of State's reply previously. In fact, it was the reply he gave to a previous question on today's Order Paper.

I wish to ascertain how the body will operate in practice. Will staff working in local authorities' water sections be assigned to this new company? If functions are to be centralised, what about headquarters staff? I take it that we are not only dealing with providing infrastructure, but with its maintenance, in that the new company will take over the local authorities' responsibility in this regard entirely. What will be the position of the private group schemes?

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Deputy O'Dea asked one of the four questions I answered. I am sorry he did not like what I stated, but I was replying to everyone who asked a question, not just his good self.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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I liked it the first time, but not as much the second time.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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The idea of the independent assessment is to examine each and every one of the issues the Deputy raised. Nationally, more than 3,000 local authority staff work in water services. It would not make sense to move them all into a new quango, but that is a matter for the report. It will make recommendations on which the Government will decide. If there are staff transfers, they will need to be in accordance with the agreement with the trade unions.

I will give the Minister some information. My apologies - it is 'Deputy';. I must get used to him not being a Minister. I had a 14-year learning curve.

The figures from the water crisis in December are amazing. More than 3,297 people in local authorities came out during the Christmas period, only six days of which were working days, to examine 26,000 different problems. The total amount of man hours was in excess of 250,000. They were used effectively. Comparing these figures with those from Northern Ireland, the question is what went right down here and what went wrong up there.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I will revert to Deputy O'Dea. Deputy Stanley is next.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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My concern is about the centralisation of water provision. The Minister of State mentioned the centralised situation in Northern Ireland, which the current Administration unfortunately inherited. The recent freeze showed how difficult it can be for the North's Government and local authorities to deal with such problems compared with our county council structure. For all its faults, the county council structure worked better.

I wish to highlight the position of the water services capital funding. Some counties have massive amounts of money that cannot be spent because of the European growth and stability pact. Some local authorities, including that in Laois, could have up to €40 million available but their hands are tied. The Minister of State mentioned that the service will not be privatised but there is a concern that if it is centralised, privatisation may come further down the line. The Minister of State need not repeat himself on that.

Will the Minister of State provide the estimated cost of putting meters into households? The period mentioned was three years. We should stop the leaks in the system, upgrade infrastructure and be able to use some of the money that local authorities cannot now use. The Government probably has more detailed figures than I do but my understanding is that tens of millions of euro is available to local authorities which cannot be spent because of the European pact. That is a significant problem and the introduction of water charges can be a diversion in getting people to pay more tax. The previous Government put a figure of €1 billion on the process, which would in turn be used to pay some of the money we are now borrowing to plug the holes in the banks.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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We are running out of time and a number of Deputies are offering.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Will the Minister of State comment on the cost?

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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The Deputy is correct in that it is not the intention of the Government to privatise Irish water. I repeat that despite the Deputy saying I did not need to do so. It is a crystal clear policy, like the water we hope to have. The Deputy's party will not have to carry out that campaign.

The Deputy mentioned a second issue and we would be happy to get the figures from him regarding his county or electoral area; I will get figures nationwide of authorities which have not spent the capital funds which they should have, according to the Deputy. Some 45% of every drop of water in our system is lost currently. One of the major problems is that some local authorities are appalling in their rates of waste water, with some losing as much as 60% of every drop of water they start off with. That is the reason we need a national body to oversee the process.

I will not prejudge what will happen with such an authority. The National Roads Authority is responsible for national primary roads, with local authorities looking after the others. Instead of having a massive quango, it may be better to have a water authority to consider issues over a certain limit. If the infrastructure does not exist on the ground with local authorities, as occurred last Christmas, there will be no optimum result.

The debate will be very important when it arises. As soon as the publication is available we will ensure it will be widely circulated in order to facilitate debate in the House and committee system.

Photo of Joan CollinsJoan Collins (Dublin South Central, People Before Profit Alliance)
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Does the Minister of State agree that it is very disingenuous to blame Fianna Fáil for bringing in the water tax, as it is, when Fine Gael and Labour voted for it two weeks before the election by approving the memorandum of understanding with regard to the bailout? Does the Minister of State agree that we might be better off considering the retrofitting of homes and using grey water? We should only use the treated water for which we pay big money in taps, kettles and drinking water. This is in preference to flushing good water down toilets. We should be looking to create jobs around repairing pipes that leak more than 45% of the water in them and retrofitting homes. That would be a much better use of money instead of introducing water meters.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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That is an important point and that is what the independent assessment will consider. The implementation of water meters is expected to run to approximately €500 million, employing up to 1,800 people over three years. The Deputy's valid point is that if water meters are not installed, approximately 5,000 people would be employed in repairing burst water mains and other problems. The Deputy is correct in arguing that we must consider how to reduce consumption. Water will be extremely expensive to treat and supply in future and we must consider strategies that will help householders reduce the volume of water they use. The Deputy has indicated that two types of cisterns may be used, for example, and the issue will be examined in this report.

We must change the way we act. The deal which the Government signed with the IMF is one that must be acknowledged because of our current financial position. There will be options and we hope to have a good debate on the issue.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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Who will pay for the installation of the meters? Will the consumer pay directly or will it be passed on to them ultimately? I appreciate what the Minister of State said about the hardworking staff in the water sections of local authorities around the country. Will he give us an assurance now that none of these staff will have anything to worry about with regard to losing employment when the new water authority is established?

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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The independent assessment will consider all the issues. I have a personal preference, like everybody else, but we must wait to see the outcome of the process. The Deputy asked who will pay for the water meters. If the value for money report indicates that meters should be installed, the National Pensions Reserve Fund - at the time the Deputy's party was in government - agreed to provide the money for this. I presume that will still apply if we go down that route.

There are two ways to pay for this. We can pay back the money over ten, 15 or 20 years, with the total figure as high as €1 billion on an initial cost of €500 million. We must take into account the cost of the money and that is why we must have a value for money audit.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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What about the staff losing their jobs?

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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One of the recommendations from the independent review will be the best way to manage staff. There may be a structure like the National Roads Authority, and if so most of the staff dealing with water locally would continue to do so. It would not make sense to move everybody to a new quango.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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That is the third time the Minister of State mentioned "quango".

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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It would be a quango.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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That is the fourth time.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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We need a water authority that would be effective and would do the job as efficiently and cheaply as possible. Local authority staff numbers have been reduced by in excess of 6,000 since 2008. Many people have left local authorities and made a significant contribution to the reduction of numbers in the public sector.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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We will take questions from Deputies Pringle and Stanley together and the Minister of State can then provide an answer.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I welcome the Minister of State's indication that there is no intention to privatise Irish water when the new utility company is established. I say this as somebody who worked in water services until 25 February this year. Does the Minister of State have any intention of reversing the privatisation that has already taken place within water services? In Donegal there is Veolia Water, Severn Trent and Laing O'Rourke supplanting and displacing jobs within the public sector on contracts provided by the Department and Donegal County Council. Will the creeping privatisation that has already taken place within the service be halted?

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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The Minister mentioned that the cost of installing meters was €500 million. Would that be better spent repairing the system that exists?

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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If that is done more people would be employed but there would be no water meters. We would then have to consider a standard household charge to pay for that. A water meter will be more expensive to install but will reduce consumption immediately. Apart from the free amount consumers have, they would want to pay less rather than more. I am not aware of the position in Donegal but I would be happy to examine it and revert to the Deputy. A study will look at this issue. If there is an existing State-owned utility that could perform the functions of Irish water the study will examine and report on it. That might be an important point in regard to the Deputy's remark about privatisation. If an existing State utility can perform those functions effectively, would that be a good idea? The independent report will consider this matter.