Dáil debates
Thursday, 26 April 2012
Water Services Reform: Statements
4:00 pm
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I welcome this opportunity to speak to the House today on the issue of reform of the water sector, and to have the opportunity to clarify recent Government decisions and outline the next steps in the reform process.
There has been a good deal of commentary in the last week on the Government's plans for reform of water service delivery. I will take this opportunity to clarify some facts. The Government announced last week its intention to establish a new independent State-owned water company within the Bord Gáis group.
It has been decided that domestic water charges should be based on usage and that a national metering programme will be commenced later this year.
The Government has also decided to establish an independent economic regulator for water services. This function is being assigned to the Commission for Energy Regulation, which will be responsible for determining the cost of water services to the consumer and for ensuring that planned efficiencies are delivered. The establishment of the economic regulator is a key and necessary characteristic of this new model and the need for such regulation was recognised in the last Government's programme for national recovery. My Department will remain responsible for overall policy and legislation for the sector. I will bring forward the necessary legislation to underpin the proposed reforms to the House in due course and we will have an opportunity to debate these issues further.
The move of water service functions from local authorities to a new commercial semi-State body, in a regulatory environment, and a new funding regime based on domestic charges is a major organisational change. Establishing the new organisation under the umbrella of a mature semi-State body has a number of advantages, including the existing expertise and experience to manage the set-up and with fewer risks than there would be with a greenfield set-up.
The independent assessment, while recognising there were potential advantages to leveraging the structure, expertise and governance of an existing State agency in the establishment of Irish Water, also foresaw certain issues which would have to be satisfactorily addressed in such circumstances. On balance, it recommended that Irish Water should be established as a new entity. The Government also decided that this matter should be analysed further with a view to ensuring that existing resources and capabilities in the State sector were used to best effect. This approach is also in line with Government plans to support economic growth by eliminating waste and duplication in public spending through rationalising State agencies.
The outcome of this analysis was that Irish Water should be established as an independent State-owned company within the Bord Gáis Group. The process involved an assessment of the capacity and capabilities of a number of State agencies from amongst those identified in the independent assessment as having the potential to incorporate a new water utility. It was not a tendering process culminating in the award of a contract. It would have been wholly inappropriate to take that approach and, as suggested in some quarters, involve private sector companies in bidding when a key fundamental principle of this reform is that water services remain in public ownership. There has been significant commentary on whether the establishment of the new water utility will pave the way for privatisation in this sector. Let me be very clear on this issue. The proposal to create a public utility is not about privatisation of our water resource, nor is it a precursor to privatisation. Water services will remain in public ownership. This is in line with the approach across Europe where privatisation is very much the exception rather than the norm.
I also wish to clarify which decisions have not yet been taken, as these issues have also been the subject of significant commentary and some guesswork. The details of the funding model, including decisions relating to the precise charging framework including the level of charges, have yet to be finalised and will be a matter for Government and the economic regulator, in co-operation with Bord Gáis. The amount of free allowance and the measures to address the needs of those with affordability issues or medical needs requiring a high essential use of water have also to be finalised with Government, Irish Water and the regulator. There will be no up-front charges for meters and their installation, no charge for water until metering is rolled out nationally, and no earlier than 2014. This will give home-owners plenty of time to be informed and to plan their water provision and water conservation measures.
It is important for us to try to frame the debate around water more strategically. Water is a precious resource. On a global level, pressures created by the world's growing population and economy, combined with the impacts of climate change, are making water scarcity a reality in many parts of the world. Work undertaken by the McKinsey Water Resources Group shows that in just twenty years global demand for water will be 40% higher than it is today, and more than 50% higher in most rapidly developing countries, and that by 2030 over a third of the world population will be living in river basins that will have to cope with significant water stress. I am struck by a recent meeting of the EU Council of Ministers on the environment at which 20 of the 28 member states spoke about problems they had with water quality and quantities. These messages are reinforced by the OECD in its environmental outlook to 2050, The Consequences of Inaction, published last month, which shows the position deteriorating further if robust policy responses are not taken by governments and other key stakeholders. The OECD report identifies among its main policy responses the need for improved water efficiency, including appropriate water pricing policies, an ongoing focus on improving water quality, and the need for robust water governance and ongoing investment in infrastructure.
Ireland's valuable water resources have the capacity to position Ireland well in terms of competitiveness and to support the success of many water-dependent sectors. Ireland needs to exploit this competitive advantage and attract more water-intensive industries. We need to explore all opportunities for using our water resources in a sustainable way to support economic growth, competitiveness and job creation. From a national perspective, the key objective of the Government's water reform programme is to put in place structures and funding arrangements that will ensure we have a world-class water and waste water infrastructure that meets all environmental and public health standards, and is well positioned to attract foreign direct investment and support job creation and maintenance in key sectors such as pharma-chem, IT and food and drink.
We have to address key organisational and funding issues in the sector or we will constrain our capacity to continue to exploit this natural advantage. There has been a historical under-investment in water and waste water infrastructure which now needs to be addressed, as well as a requirement to invest for future needs. The requirement for continued significant capital investment in water services has been estimated at €600 million annually - as compared to about €370 million in Exchequer capital spending this year - together with the provision for the backlog of investment required mainly to meet statutory obligations. In the context of our current public finances, this presents a significant challenge which requires an innovative response to develop a sustainable funding model which can deliver these massive investment requirements.
The existing approach where water services are delivered through 34 water service authorities has inevitably lead to fragmentation in delivery and duplication of functions across authorities which has inhibited our capacity to gain advantages through economies of scale. A public water utility offers the best opportunity to build on the strengths of the existing system, improve efficiency and effectiveness of water services delivery, provide access to new funding sources and improve strategic planning and accountability. Establishing Irish Water as an independent State-owned company within the Bord Gáis Group will facilitate making best use of existing resources and capacity within the public sector. In deciding on this approach, the Government recognised that Bord Gáis Éireann has key capabilities that can be brought to bear in the establishment of Irish Water, including experience in operating as a utility in a regulated environment and a track record in raising finance. The organisation has specific skills from its own experience of transformation, customer relations, network management, metering and utility operation that can be quickly deployed to assist in the successful establishment and operation of Irish Water. These skills within the Bord Gáis Group will be combined with the considerable experience, skills and commitment to service in local authorities to build the new organisations while retaining the strengths of the existing model. It is envisaged that service level agreements will be put in place between Irish Water and local authorities and that these arrangements would end in 2017 at the earliest. This will ensure a smooth transition to the new model and guard against the loss of local expertise. It will also mean that the majority of staff will remain in the direct employment of local authorities for a considerable period.
Work is now progressing on the development of an implementation strategy which should be finalised in the next month or so. This will focus on implementation and transformation issues involved in the creation of the new public water utility and will recommend appropriate transitional arrangements. The strategy will also focus on maintaining the delivery of a critical public service during and following a restructuring process, and will give further clarity on the next steps that will be taken in the reform process.
As I clarified earlier, many key decisions remain to be taken. Much commentary has understandably focused on water metering and charges and what this will mean for households. Ireland is the only OECD country which does not charge for water services. Providing high quality water services without regard to cost or sustainability is no longer feasible. By levying charges based on the amount of water used, households will be given an incentive to use water responsibly and to respect this valuable resource. International evidence has shown that where meters have been installed significant reductions have been achieved in the level of consumption. We have taken a conservative estimate of a 10% potential reduction in consumption that could be achieved following the introduction of water meters in households. This is a conservative estimate because metering changes habits. This view is supported by the trial carried out by "The Consumer Show" on RTE last Tuesday, which showed that a family of five in a three- bedroom semi-detached home can reduce their consumption by up to 30% by taking very simple measures, for example, not leaving the tap running when washing teeth or preparing vegetables, leaving a jug of water in the fridge for drinking purposes, using the economy setting on dishwashers and washing machines or fitting a water saving device costing just a few euro in the toilet cisterns.
Michael Healy-Rae (Kerry South, Independent)
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What about fixing the leaks?
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Reducing unnecessary water use reduces the operational costs of providing water services as well as providing longer term savings in respect of capital investment. Reducing unnecessary water use reduces the operational costs of providing water services as well as providing longer-term savings on capital investment. The details on the level of charges, free allowance and affordability issues have not been decided upon. However, as is the case for other providers of utility services, Bord Gáis will be required to have a range of options in place to assist householders who have difficulties in paying their bills. The economic regulator, with the Government, will be responsible for determining the cost of water services and ensuring efficiencies are delivered so that the cost of providing the service to the consumer is kept to a minimum.
Michael Healy-Rae (Kerry South, Independent)
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What about fixing leaks?
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The regulator will be consulting with Irish Water, the Department, local authorities and other key stakeholders in the coming months to determine the approach on setting of water charges. There is no doubt embarking on such a fundamental programme of reform for the water sector will bring many challenges but these reforms have the capacity to deliver a sustainable financial model in the future, leverage additional funding for investment, achieve efficiencies through economies of scale and elimination of duplication and, crucially, provide an improved service for consumers. In light of the global economic challenge and the position of our public finances, the time is right to reorganise our approach in this sector to support economic growth and to meet the needs of future generations. The opportunities and benefits the reform programme will bring for the economy, for society and for service delivery are worth the challenges and it is in all our interests to support this approach. I look forward to hearing the views expressed in the House today and I am confident that constructive and informed engagement from all stakeholders will be a valuable input in the development of an implementation strategy to ensure the change is managed well.
Niall Collins (Limerick, Fianna Fail)
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The trend of failure from this Government has grown steadily week by week. At the centre of the storm is the Minister for the Environment, Community and Local Government, who has now completed a perfect hat-trick of disasters. The Government debacle in implementing water charges shows that it has failed to learn any lessons from the household charge and septic tank fiascos. A lack of detail about how much metering will cost the consumer, outdated numbers, uncertainty for current employees, a rushed decision making process bypassing the Oireachtas and confusion in the Cabinet over the costs involved all point to another Government disaster. The Government is rushing ahead with the creation of Irish water and rolling out water meters without clearly considering the costs involved to consumers. Ultimately, householders will be left to pay the price for Government ineptitude. We are calling on the Government to stop before it goes further down the disastrous road chosen.
Over the past few months the Customs House has become ground zero for a litany of Government mistakes, botched implementations, hasty decisions and poor communication. At a time when the Government should be focused on a critical referendum on the country's future, its energies are spent on deflecting attention from escalating problems in the Department of the Environment, Community and Local Government. A sense of arrogance has characterised the Government's approach to new charges. Consultation with the public has been replaced with dictation from the Minister. The abysmally low compliance rate with the household charge and protests over the septic tank tax on rural Ireland bears testament to the kind of approach taken by the Government. This high-handed attitude by the Government is quickly becoming its trademark and now appears to be dominating the strategy to impose water charges.
The establishment of Irish Water and the rolling out of water meters and charges by 2014 has been characterised by a lack of detail, ineptitude in communication and a critical failure to appreciate the scale of the challenge at hand. Households have been hit with a raft of contradictory messages and numbers from the Government. During a period when consumer confidence is at a low ebb, the Government appears to be committed to sapping any potential for future improvements in sentiment.
The roll out of metering was initially touted as an upfront charge, only to be replaced by a €800 standing charge over 20 years. It is an excessively expensive exercise. Amidst the Tánaiste and the Taoiseach directly contradicting each other, the ordinary householder is left trying to figure out the cost. The price of meters can range from €60 to €150 with labour and additional cost depending on the location and work involved yet the Government indicated metering would cost €160 per meter with the remaining €640 going towards installation costs. In these straitened times, it is difficult to see companies vying for the tendering process with such exorbitantly high labour costs.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Where did Deputy Niall Collins get the figure of €800?
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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There is no interaction.
Niall Collins (Limerick, Fianna Fail)
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The detailed 2009 Walker review in the UK considered the cost of alternative meter installations. Internal installation was found to cost between £106 and £385 and external installation in new boxes cost between £293 and £471. Employing these numbers, and assuming that meters are rolled out to 1 million households, the total cost would range between €125 million and more than €555 million. Given the vast differences between these figures it is legitimate to ask what cost-benefit analysis, if any, the Government undertook on internal and external metering.
The Irish people are borrowing €450 million directly from the National Pensions Reserve Fund to finance the roll-out of meters and the creation of Irish Water. Over 20 years we are going to repay €800 million, almost €1 billion, on the back of taxpayers to install meters. Dr. Edgar Morgenroth of the ESRI has set out that potential water charge rates could reach between €473 and €560 per household. Simultaneously, figures from the ESRI last week revealed a potential property tax each year of about €2.50 for every €1,000 of house value or €500 for a house worth €200,000. Struggling homeowners, shocked by the scale of the charges, have looked to the Government to provide clarity only to receive confusion. Details on issues such as free allowances have not been forthcoming as the Government kicks to touch, passing the buck by transferring the problems to the, as yet, non-existent Irish Water. Further questions linger over whether private wells will be subjected to metering under the water directive, as some Commission reports indicate they will. These growing concerns, held by rural households across the country need to be fully addressed as soon as possible by the Government and the EU Commission.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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They are addressed, we do not have to do anything.
Niall Collins (Limerick, Fianna Fail)
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When looking at the numbers involved in water metering yet more holes appear in the Government case. The figures used by the Government are based on the 2006 census, as used in the PwC report on the provision of water services. When we look at the 2011 census figures, we can see further potential problems with the Government's plans. Some 503,000 units or 36% of those households eligible to pay water charges are potentially unsuitable for metering by the Government's standards. These units were either constructed before 1960 or are apartments. This is significantly higher than the 300,000 households or 20% of eligible units the Government has cited.
Instead, we learn that these homes will be subject to yet another regressive flat rate charge without any conservation incentive. This leaves potentially just under 890,000 households for water metering, more in chime with the estimate of Dublin City Council executive manager, Tom Leahy, that one third of households cannot be metered. In stark contrast, the Department of the Environment, Community and Local Government said that over 1 million homes would be metered by the end of 2014, with only 300,000 excluded because they are apartments or gated communities.
It is unclear whether the 60,000 holiday homes across the country are eligible to pay water charges and whether a meter will be applied. What is the plan for the 230,000 vacant houses in the State? Will they be metered on an ongoing basis as they are occupied or in one fell swoop on estates? Will they be allowed to opt into the metering scheme at their own cost once they are occupied? It is imperative the Government updates its figures and sets out a clear business case for the plans announced before it goes further down the road.
Fianna Fáil has a number of serious, specific concerns about the Government's NewERA project plans to establish Irish Water. From what we have seen so far, the Government is rushing ahead with the creation of Irish Water without seriously considering the broader costs and consequences of setting up a new Government monopoly company over such an important resource. A smoke screen consultation process was utterly undermined by the fact the Government had already decided what it was going to do. The consultative process was mere window dressing and tinkering around the edges rather than coming to the key issues with an open mind.
There are a number of areas in which I would like to reiterate our concerns, including stripping local government of its role. The Government has yet to publish the White Paper on local government reform yet it is aggressively pressing ahead with stripping 34 local authorities of one of their key roles. This incoherent, ad hoc approach undermines meaningful efforts to re-shape local government to suit the needs of modern Ireland.
The PwC report indicated that Irish Water will operate with significantly lower numbers than the 4,278 currently employed by local authorities in the provision of water.
In yet another contradiction, the Taoiseach denied any potential job losses, only to be subsequently contradicted by the Department who said it would be a matter for Irish Water Based on the example of Northern Ireland, at least 1,200 jobs could be lost here. Local authority staff have on-the-ground knowledge that will be lost with the creation of a new company and the shedding of jobs. The local response of a centralised company will inevitably suffer in comparison to on-the-ground operations that have experience in the field of dealing with the water infrastructure.
Thus far, some €130,000 has been spent on consultation fees to PwC, yet the advice they gave was ignored. The absence of a coherent Government strategy has generated substantial fees for private consultants, with money going down the drain. The experience in Northern Ireland confirms the large amount of money committed to contracting private consultants to help create a new body. The studies published by the Government give no indication of the costs involved in hiring consultants, which will spiral as the scale of the administrative challenge created by the Government's decisions becomes more apparent over the coming years.
The Government has set out the broad parameters of the NewERA Irish Water company but has failed to provide meaningful detail on the corporate governance structures of the company. Details on whether it will provide a commercial return on its assets, reporting structures and democratic oversight remain absent. Furthermore, the links between this separate company and the planning authorities, which previously would have all been attached to the local authority, present fresh challenges in ensuring proper sustainable planning. Regardless of its rhetoric in the Dáil, the Government's insistence on the creation of a company indicates that it is preparing the ground for an eventual privatisation of the water system. The choice of Bord Gáis, which has been partially earmarked for sale, further confirms this suspicion. The failure to consider a third way in providing strengthened oversight and an investment model to upgrade the water infrastructure reveals the privatisation goal at the heart of this NewERA white elephant.
The pressures mounting on the Department have clearly been shown up in the cracks now emerging. The rushed nature of the plans to develop Irish Water will place additional pressure on a Department already under strain and local authority officials that will inevitably undermine the quality of work that underpins this project. The lack of detail and contradictory messages thus far bear testament to the strain under which they are operating. This does not bode well for the future implementation of an immensely complex process. Again, the lack of any planned and strategic approach by the Government opens the door to expensive and unnecessary consultancy fees.
The Government's justification for the creation of a singular Government monopoly rests upon the economies of scale of the project and efficiency gains. The PwC report fails to specify detailed efficiency gains. Instead, it gives a vague outline of potential savings. For example, given the Taoiseach's insistence that no jobs will be lost, from where will the savings come? The Minister has yet to clarify these issues. The plans laid out for the future of Irish Water fail to place the customer at the heart of the process. The deficit of local knowledge and on the ground responsiveness will inevitably negatively affect Irish customers. Furthermore, the deficit of democratic engagement, the stripping of local authorities' involvement and the creation of a separate centralised body will create an unaccountable body detached from customers. We fundamentally disagree with the privatisation model put forward by the Government. It lacks local accountability and responsiveness and will lead to job losses. We will shortly publish our own strategy to ensure adequate efficiency in infrastructural upgrades while keeping the effective local element that currently exists. Our model will exclude the heavy consultation fees that the proposed system will generate.
The creation of Irish Water as a part of Bord Gáis follows a murky selection process without public scrutiny or accountability. The decision flies in the face of the only advice the Government got from its consultants. The PwC report commissioned by the Department of the Environment, Community and Local Government recommended against a multi-utility model on the basis of international experience that found this approach had been unsuccessful elsewhere. The strength and associated experience of the retail side of Bord Gáis, which deals regularly with consumers, has, the Government claims, earmarked it as suitable for this massive project. However, this is the side of the company that the Government intends to sell in the future, further exacerbating fears about the privatisation of Irish Water at some stage. Further questions have been raised by commentators about the competency of Bord Gáis in taking on this onerous managerial responsibility.
The conferral of price setting powers on the Commission for Energy Regulation raises another set of unanswered questions. What additional resources will be given to the commission? What will be the nature of the relationship between the Government and the revamped commission? How suitable is this commission for this specific and challenging task? What role will the National Consumer Agency have? Rather than take heed and learn from the grave mistakes made in the all too recent past, the Minister has ploughed ahead with poorly thought out plans based on outdated figures, with little sense of the potential repercussions. The future of water supplies in Ireland deserves and demands better. The Minister and the Government need to answer the mounting list of questions over the future of Irish Water.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I want to state in the strongest possible terms, Sinn Fein's opposition to the establishment of Irish Water and the introduction of water charges and our support for improving the existing local authority system.
The establishment of Irish Water is a Trojan horse for the installation of water meters and the imposition of water charges and lays the foundation for the full privatisation of the water sector in the future. The basis for the Government's argument is a so-called independent report carried out by PricewaterhouseCoopers. The purpose of the research was never to improve water services for the Irish people but "to undertake an independent assessment of the transfer of responsibility for water services provision from the local authorities to a water utility", namely Irish Water. Despite this bias, the report goes on to state: "The point has been made that universal domestic metering is a theoretical rather than a practical proposition and it is quite probable that a minority of domestic customers will continue for the foreseeable future on an unmetered basis." It is important to note that the EU-IMF requirement does not mention metering. The intention of the Government is that Irish Water be established as a State owned subsidiary of Bord Gáis Éireann.
Meanwhile Sierra Support Services, a Siteserv plc company, has secured a contract worth up to €60 million to become the sole services provider for the installation, maintenance and testing of domestic boilers to Bord Gáis Éireann. Siteserv was sold to businessman Denis O'Brien recently. This raises serious questions about who will receive the contract for the installation and maintenance of more than 1 million water meters. We are led to believe that these meters will require regular maintenance and recalibration. Like SIPTU, we have concerns that the proposal to move 4,000 workers from their current positions in local authorities into a new utility will mean redundancies and a further loss of experience, intelligence, knowledge and talent. This is echoed in the PwC report. It stated that when Irish Water has fully taken over all water services from the local authorities, in 2018, employee numbers will be significantly lower than the 4,278 deployed today.
In its drive to establish Irish Water, the Government continues to spin myths about water charges and water meters. Myth number one is that the public gets water for free. This is untrue. The people already pay for their water through direct and indirect taxation. The introduction of separate water charges is an attempt to get the public to pay for water twice, once in their taxes and a second time through the water meter. This is unfair and regressive double taxation. The second myth is that all other citizens in the EU pay water charges. This is simply not true. In the North, we had a situation where the Sinn Féin Minister in the Assembly resisted introducing water charges, despite attempts by Westminister to impose water charges. People in the North do not pay the £600 average water charge on top of household and council charges people pay in England.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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How much did they pay on property tax?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We will have that discussion another time and will discuss the services they get if the Minister wants.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Government would have us believe that water metering reduces consumption. This is untrue. In England, where water metering has been in place for many years, consumption is at 158 litres per day per head of population while in Dublin the consumption is 148 litres per day even taking into account all the leaks. It transpires that one third of households in Dublin cannot be installed with meters and this is also the case in many parts of the country for various reasons. If water meters equal water conservation then the Minister will have to deal with a serious problem. According to that logic, one third of homes in the capital will have no incentive to conserve water because a flat rate will have no impact on water conservation.
The establishment of Irish Water and the introduction of water meters was brought through the Houses of the Oireachtas in the most underhanded way. The working group has yet to report. The report on the water sector still remains in draft form and is not available to the media. Yet, Cabinet members have been commenting on and promoting the introduction of water charges. I participated fully in that working group and I made a detailed submission with ten solution-based recommendations. However, I am now left with no option but to resign from that working group because the process has been undermined. The work of the group has been undermined by the spin doctors and by the Cabinet.
We in Sinn Féin fully understand the challenge that lies ahead for the water sector. However, rather than dealing with the challenge of getting water to those who need it, this Government has used the water crisis as an opportunity to promote its right wing agenda of charging ordinary people for the use of something they already own and for which they pay with their taxes. Unfortunately, the Labour Party has moved from actively opposing water charges before the election to becoming cheerleaders for this form of double taxation. Our approach is different. It is based on ensuring that water provision remains in public ownership and paid for through progressive taxation.
We propose two simple but immediately effective planning recommendations. We recommend the introduction of rainwater harvesting in new buildings to reduce water consumption by one third. Dual flush toilets should be mandatory in new buildings and in replacement buildings. This would reduce personal consumption by nearly 20 litres a day and would not incur extra costs for the taxpayers.
This Government would be far better off investing money from the National Pensions Reserve Fund to create real jobs that will have a positive legacy. The money being wasted on meters should be invested in upgrading an ageing, leaking water distribution system. The Minister and the Taoiseach stated in the House last week that 2,000 jobs will be created and this is to be welcomed. In my view, the money wasted on the installation of water meters should be invested in the upgrading of the ageing water system and in the repair of leaks in the distribution system.
Currently the water sector is managed by the 34 local authorities. The move to Irish Water will not improve accountability or governance. Local authorities are accountable to their communities. They are able to meet local demands and can provide solutions to local crises and emergencies. This was proved in the harsh winters of 2010 and 2011 when the local authorities responded better than the response of the single utility company in the North and which is more than an arm's length from government.
Like SIPTU, Sinn Féin is concerned that the proposal to move 4,000 workers from local authorities into Irish Water will mean redundancies and a further loss of experience and talent. This is echoed in the PWC report which states "...when Irish Water has fully taken over all water services from the local authorities in 2018, numbers will be significantly lower than the 4,278 deployed today".
The PWC report highlights the strengths of the current structure:
Services are managed by bodies that are close to customers and are democratically elected. Water sector development can be consistent with Local Authority Development Plans; [They have] an experienced local workforce; Central co-ordination and prioritisation; Track record of successful delivery of capital projects and providing continuity of service, delivering to a growing population; Clear accountability for water and wastewater quality; Ability to mobilise local resources at times of need.
Sinn Féin believes that the current governance arrangements are sufficient for managing the service, albeit with considerable improvements. It is to be hoped this can be achieved through local government reform. A single utility is not the best or most cost-effective way to manage the service.
As regards democratic accountability, if I wish to contact Bord Gáis, I can ring a call centre at 1890 312 312. This is what will face Deputies and county councillors. This will be the level of interaction. Nowhere can we find details of how Irish Water will be financed or how much it will cost to establish. Current reports are based on nothing more than assumptions. The PWC report for the Department states:
The funding requirement is an estimate of what the utility will need to support its activities. Our scope of work does not specifically include the evaluation of how that funding requirement should be met.
Sinn Féin calls for the establishment of a national water sector framework team overseeing governance of the water sector and capital investment for the sector. It would be composed of city and country managers and be convened and chaired by the Secretary General of the Department of the Environment, Community and Local Government.
According to the Irish Academy of Engineering, the cost of meter installation will be at least €500 million. This €500 million would fund the water conservation strategy for six years. It would be far more appropriate to invest the €500 million in water conservation rather than meter installation, thus saving water and public money.
Sinn Féin supports the introduction of district metering as opposed to installing domestic water meters in every household. This is already in place in a number of local authorities and is cheaper and more effective in monitoring usage and identifying leaks. In County Laois it will be fully rolled out this year. A water keeper from the Minister's county identifies the leaks very quickly. He has an efficient method for identifying leaks in the system. It is not the householder but the water distribution network that is the biggest culprit when it comes to water waste. The State's water distribution network is antiquated. In some local authority areas up to 60% is leaking away. Capital investment in water has been cut by nearly €200 million since 2010 to €331 million in 2012, with more cuts planned until the budget is reduced to just €266 million. With average leakage at a staggering 41%, there needs to be an increased level of capital spending on the State's water infrastructure. The Department of Environment, Community and Local Government must return to at least the 2011 level of capital spending. There needs to be a Government-sponsored drive towards water metering in the context of overall Government policy. When poverty levels and income distribution in Ireland are taken into account, it is obvious that water charges have a greater impact on low income households and their budgets. Water charges must be considered within the context of the other additional costs faced by householders such as a flat rate household charge of €100; septic tank charges; an increase in the carbon levy of €5per tonne; a reduction in the fuel allowance from 32 weeks to 26 weeks; a 2% VAT increase. In England the cost of water for a household is £600. While the Minister's proposals are focused on the domestic householder there is no mention of the debt owed by the commercial sector where only 52% of water rates are collected. It appears that household are being penalised for the lack of building regulations, leaking pipes and poor governance.
The Government and the local authorities must take action on the outstanding water rates owed to the State by the commercial sector. The crisis facing water supply does not start or finish at the Border. Recognising that river basin districts cover both sides of the Border, it is essential that there is co-ordination of the water sector. We need to develop an all-Ireland strategy on water provision. There is a requirement on both the Northern Assembly and the Government to collaborate on the delivery of services where shared resources, joint capital investment in infrastructure and procurement, among other matters, on an all-Ireland basis, would clearly prove beneficial.
The establishment of Irish Water along with the imposition of water meters and water charges is at best ill-thought out and at worst is driven by Fine Gael's right wing agenda and supported by a limp Labour Party. The Government fails to realise the level of anger that exists on this issue. Water charges will be opposed at every opportunity both here in Leinster House and out in the community. A wide range of charges have been imposed and people are at breaking point. Water meters and water charges will be resisted every inch of the way by Sinn Féin and the general public.
Clare Daly (Dublin North, Socialist Party)
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I wish to share time with Deputies Mattie McGrath and Catherine Murphy.
Michael Kitt (Galway East, Fianna Fail)
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Is that agreed? Agreed.
Clare Daly (Dublin North, Socialist Party)
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I have so many points to make and so little time. The Minister tries to portray the reform of water services delivery as harmless but we can demonstrate that the analysis on which the proposition is based is fundamentally flawed and the service will be enormously costly to the State and individual taxpayers. While I have no problem with this debacle being the Minister's historical legacy, there are far greater issues at stake.
The decision to set up Irish Water was based on analysis which local authority engineers have described as containing significant errors, omissions and inappropriate comparisons of such significance that the conclusions reached could not possibly be valid. They have demonstrated that PricewaterhouseCoopers produced its evidence for a comparison with Scottish Water based on completely wrong information. They claim that the Irish water pipe network was 25,000 km long but the reality is that it is closer to 50,000 km long. They claimed that 1,634 staff were involved in Scottish Water compared to the Irish context of approximately 4,000 staff when the reality is that the staff employed in Scottish Water, as per its annual report, is revealed to be 3,703. We have had an analysis accepted by the Department of the Environment, Community and Local Government which states that the process and the trend has been away from municipal control in this area when the facts indicate the opposite is the case – 85% of water provision across Europe is under the control of municipal authorities.
I do not have the time to debate these points but the reality is that the expertise and staff are based and organised in 34 local authorities. They are the people on the ground, the water and sewerage caretakers, along with the local authority engineers. The Minister, in his proposal to establish Irish Water intends to fundamentally disrupt that operation. Not only that, but the PricewaterhouseCoopers report leaves out of the equation areas such as boundary issues, septic tanks, surface water drainage, planning and agriculture run-offs among other areas. They have not been addressed in the proposed reform. We will have a scenario where the profitable areas of water provision are hived off to Irish Water and the rest will be left with the local authorities to handle as they see fit. It is clearly going to be an incredibly unsatisfactory situation.
I take issue with the Minister on a couple of points. The first point, that we are the only country that does not charge for water services, is totally and utterly false. The Minister has some neck to come to the House and accuse the Irish people of getting something for nothing when it is recognised in the European Union that we have a derogation on water because we have paid for it through our central taxation and indirect taxation – the highest indirect taxation throughout Europe. The fact that the Government has chosen to take some of the money we have paid and use it to pay the private debts of banks, which is not really our problem, and to come back and ask us to pay again under the guise of water conservation is quite simply a con that Irish people are not going to fall for. The reason we are not is because we can demonstrate factually – Engineers Ireland and others will back us up in that regard – that the Minister's statement that significant reductions take place where water meters are installed is quite frankly absolute and utter rubbish which does not stand up to any independent scrutiny whatsoever. It has been demonstrated that domestic water meters can at best initially reduce consumption by on average 10%. Comparisons between Ireland and Britain where water is metered reveal a reduction of closer to 6%. Domestic water consumption is 16% of the total water used in society. Therefore, 6% of 16% is a reduction of less than 1%. The Minister proposes to spend more than €1 billion of taxpayers money which he then wants to impose on us in installation charges on our bills to save less than 1% of the water supply when one has a system in operation where, on average, 41% of the water supply leaks back into the ground. If this reform was about conservation the Minister would be fixing the pipes, dealing with the water that is unaccounted for and implementing rainwater harvesting programmes in schools and public buildings. That is not what the game is about; this is about a stealth tax. The Minister has not learned the lessons of the household tax. We can guarantee him that if he thought the opposition to the household tax was significant then he has seen absolutely nothing yet with this one.
Mattie McGrath (Tipperary South, Independent)
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I am delighted the Minister is present to respond to the debate but I do not think much of the speech he made available, which I have just read. I am surprised that there are no officials accompanying the Minister. I do not know what is going on in the Department. The Minister does not know himself. The officials are rarely seen with him. He is a one-man show. His backbench colleagues told me some months ago that he was the man; that he would introduce a household charge and a septic tank charge. He had it all done, but now instead of being called the Minister for the Environment, Community and Local Government, he would be more aptly described as the Minister for confusion, persecution of homeowners and disbandment of local government. The Minister has had a long and distinguished career in the Dáil, much longer than I have, but he seems to want to change the world and to create confusion. He also seems to want to sabotage Labour Party conferences because the leaks that emerged that weekend caused huge angst to his so-called colleagues in government. He does not respect them. How could he when he does not respect anyone? I am delighted the Minister of State, Deputy O'Dowd, is present because he has been on programmes and he has come across as sane, civil – I do not say the Minister is not sane – I am not suggesting that-----
Fergus O'Dowd (Louth, Fine Gael)
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I could not say Deputy McGrath comes across as sane.
Mattie McGrath (Tipperary South, Independent)
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Excuse me. But Deputy O'Dowd is the nice face of Government. Phil has become the monster.
Michael Healy-Rae (Kerry South, Independent)
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Phil the monster.
Mattie McGrath (Tipperary South, Independent)
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I affectionately called him Big Phil previously.
Michael Kitt (Galway East, Fianna Fail)
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Deputy McGrath must address the Minister as "Minister".
Mattie McGrath (Tipperary South, Independent)
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Of course. Yes, he is the Minister. He knows I mean that. He is the same man who is in charge of the local government boundary changes. It will be the biggest example of gerrymandering since Jimmy Tully. I suggest that Jimmy Tully would not be a patch on him.
Michael Kitt (Galway East, Fianna Fail)
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We are discussing a different issue.
Mattie McGrath (Tipperary South, Independent)
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I know we are but I question whether this man is fit to be in government because his cavalier approach to all of these matters is shameful. It is nothing short of bully-boy tactics. County councils are looking after water services but the Minister wants to disband them as well. He will not disband the part of Kilkenny that is in Waterford. He gave the area €1 million to set up a new office there. He tried to reduce the two local authority areas in Tipperary to one. The Minister must have a little fairness and respect for the elected Members of other constituencies as well.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Is Deputy McGrath not in favour of the reunification of Tipperary?
Michael Kitt (Galway East, Fianna Fail)
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Deputy McGrath has the floor.
Mattie McGrath (Tipperary South, Independent)
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Has the Minister ever heard of proper planning involving rainwater harvesting? That is what the Minister should be looking at in the Department. It was part of the plans envisaged by the former Minister, Mr. Gormley, that rainwater would be harvested in tanks and used by households and schools. A retrofit programme is required to harvest rainwater for two and three classroom schools so that all the water could be kept, except for drinking water.
I know what it costs to produce water. I am not against charging for water. It is a huge cost to provide clean, uncontaminated and fully treated water. It should not be used for washing cars, yards, roofs or other such things. We must have regard and respect for water. Metering will probably help the situation in that regard. However, I object to the money involved and to handing over responsibility to Bord Gáis. I thank my own local authority area, South Tipperary County Council, for its excellent submission to the Department. I hope the Minister has read it. He probably has not given that he did not take the submissions on the septic tank issue. However, it did make a submission to him. I thank the county council also for the way in which it maintains the water system, provides water and fixes leaks. There is an excellent team led in recent years by Aidan Fennessey. From my days on the county council I understand that a meter has been fitted for the past 12 years for every new water connection or every time there is a water leak. Are they all going to be dumped now? What kind of backwards-thinking country do we have that they could not be modified and made suitable?
I wish I had much more time. Bord na Móna and Bord Gáis were lobbying strongly for the administration of the water service. Why does it have to be the preserve of such people? I wish to see ordinary people, contractors and plumbers getting the work on the ground, not big conglomerates who might be friends of the Minister that he might meet on golf courses. I do not frequent such places. I refer to the K Club and other such places and some place in Kerry where the Minister was caught for intemperate language.
This is a fine mess the Minister has created again. We should call him the messy Minister because what he is doing is not necessary. I agree with water metering but I object to the Minister's cavalier attitude. An important referendum is coming up. I said to the Taoiseach the other day that he should send the Minister for the Environment, Community and Local Government, Deputy Hogan, and the Minister for Justice and Equality, Deputy Shatter, to a foreign country on a six week long trip to return when the referendum is over, otherwise it will be lost because they annoy the people. They are like a nest of wasps which one wants to kick out of one's way. They belittle the people. It ill behoves the Minister, Deputy Hogan, who has been in the House for a long time. He is elected by the people of Kilkenny whom I am sure we will meet on the hurling field before the year is out and we will play them fair and square. The Minister does not play fair and square here. He uses bully-boy tactics which are unacceptable to me. While I am here I will be keeping watch on the Minister. People tell me I would want to be careful of big Phil-----
Mattie McGrath (Tipperary South, Independent)
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Minister big Phil. I say it is easy to climb a tall tree when it has knots so bígí cúramach.
Michael Kitt (Galway East, Fianna Fail)
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I call Deputy Catherine Murphy who has five minutes.
Catherine Murphy (Kildare North, Independent)
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Unfortunately five minutes will not be enough. Ireland has more than 5,000 lakes, 7,000 km of coastline, a network of rivers and streams spanning the country and high levels of rainfall with an average of 150 days of rainfall in the east and south east and an average of 225 days of rainfall in parts of the west. This should result in an abundance of easily sourced and available clean water. What people do not understand is why we have not harvested this. Local authorities are constantly stuck with water shortages in winter and summer and water quality issues. The local authorities in the greater Dublin region propose to extract water from the Shannon and pump it to the Dublin region. We are told the water levels in the region are on a knife edge.
According to figures sourced from the All-Island Research Observatory at NUI Maynooth in my constituency, 42.4% of supplied water in Ireland is unaccounted for. The average figure in developing countries is 35%; in the UK it is 19.2%; and in European countries it is 15%. Our best local authority is South Dublin County Council which manages to lose only 20.89% while in Kerry, which is the worst, the figure is 59.81%. This is expensive treated water. The figure for my county of Kildare is 28% which is the fourth best. Our drinking water quality is far from perfect with the Environmental Protection Agency indicating that 15.3% of groundwater is of poor quality, 10.4% of rivers are of poor or bad quality and 24% of lakes are of poor or bad quality. It is extremely unlikely that we will comply with the water framework directive in 2015.
It is a matter of fact that many of our pipelines contain asbestos and lead which is unbelievable. It is hard to see why people are opposed to being charged for the installation of water meters. It is not hard to see why people would be opposed to the installation of meters-----
Catherine Murphy (Kildare North, Independent)
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Let me be very careful about this.
Fergus O'Dowd (Louth, Fine Gael)
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Go back over that again for your own sake.
Catherine Murphy (Kildare North, Independent)
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It is not hard to see why people would be opposed to the installation of meters for a system that wastes 42% of the product it is supposed to deliver. This means 42% never gets to a tap. We are discussing establishing an agency that will operate as a business and will be allowed to bill people and which will inherit this level of wastage. Would the Minister of State pay for something if this was the quality of service? One can understand why people feel aggrieved.
I support the idea of conserving water but the way the Government has gone about it is backwards. It is exactly the same as the household charge. Essentially the Government will start the same war with the local authorities as was the case in the 1980s and 1990s and I know what that was like. Week after week water was cut off. I know what this means and it takes years to repair the damage with a public agency when this approach is taken. It looks like we will establish HSE 2 and there will be a layer of Teflon between the Government and the delivery agency. The regulator will be the one to decide on the free allowance. I am not opposed to charging for waste but it must be those who are wasting water who are charged or penalised.
Will the Minister of State give us a guarantee that if we end up out of the bailouts in 2018 or 2019 and must begin paying €5 billion a year to the lenders and they start scratching around looking for something saleable that this will not be for sale? I do not believe the Minister of State can give such a guarantee.
We need to reach a point where we have a proper local government system. We have damaged the prospect of this with the household charge. We need to have a rational debate on the provision of water. Many local authorities have collected development levies. They have liabilities. How will these be handled if there is a transfer? Large amounts of money in development contributions cannot be spent at local government level. Deputies Clare Daly and Luke Flanagan and I are members of the Joint Oireachtas Committee on the Environment, Transport, Culture and the Gaeltacht and we have been trying to put together a report and meet experts in a range of fields. We felt we had no choice but to withdraw from the working group in the same way as Fianna Fáil and Sinn Féin have because there is no point in being on the committee if the decisions have already been made.
I have been told by numerous people that contracts have already been awarded to companies for the provision of water meters.
Catherine Murphy (Kildare North, Independent)
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Will the Minister of State categorically state this is not the case? It is almost currency at this stage. We must address the issue of waste because we will not be credible and people cannot be penalised if the system itself is as leaky as ours. It must be the first issue that is dealt with.
Fergus O'Dowd (Louth, Fine Gael)
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This is a very important debate. We are arranging for the implementation programme to be debated by the committee as soon as it is available so that every member of the Oireachtas who wishes will have an opportunity to go through all of the issues in an open-ended way. There will be no time limit on that debate such as there is on this one. It is important to discuss the issues and answer all of the questions Deputies have and to put questions to them also on value for money, on whether we want to conserve our water as Deputy Murphy rightly and properly argued and on the vision the Minister, Deputy Hogan, has for the future of our water services and the country's capacity and ability to be the best in Europe in terms of reducing waste water. We must repair the leaks and pipes and get water to the greater Dublin area so the region has the ability to meet future domestic and commercial demands.
The recent census report for the north-east where I live shows Drogheda is the biggest town in the country with Dundalk being slightly smaller. There has been massive growth in the region north of the greater Dublin area. If we are to sustain this we must have the infrastructure in place. Our vision is to be the best in Europe. We are not standing back or resiling from this. We want to ensure we have the capacity to deliver water. Water intensive industries such as agriculture and pharmaceutical and chemical industries are coming to this country. They need water and we want to be the best place to supply it.
Within the past month I was in England where there is a drought in the Anglia area. We have significant advantages in terms of being water rich if we can stop the waste and ensure places that do not have the capacity to deliver the water required by 2020 will have it as a result of what we do. This is about the big picture and the big issues we must face. Deputy Murphy's home county of Kildare has the lowest charge for commercial water in the country at €1.50.
Catherine Murphy (Kildare North, Independent)
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The county is one of the biggest commercial users of water.
5:00 pm
Fergus O'Dowd (Louth, Fine Gael)
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I know. My point is that in the county beside it the same volume of water costs €3.52. We need to address all of these issues and have a uniform system of charging that is acceptable to everybody.
It would make no sense if water in Wicklow was twice as expensive as water in Kildare. In terms of value for money, the average cost nationally of 1,000 litres of water is €2.52. Members will be aware that it costs €2.50 for one litre, or less, of water in a pub or hotel. Households and places of business are currently provided with 1,000 litres of water for the same amount.
I want now to reply to some of the issues raised. I refer Members to an article in the Irish Independent of Friday 11 December 2009 which reports the late Brian Lenihan as saying that domestic water fees would apply from 2011 and that work in this regard would cost €600 million over two years. There is nothing new for Fianna Fáil in what the Government is doing. This must be and will be done, but it will be fair. The price will be set by the regulator and the free allowance will be decided by Government.
If there is a partitionist party in this House it is Sinn Féin. North of the Border it agrees that every house in Deputy Gerry Adam's former constituency should pay €1,000-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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On a point of order-----
Fergus O'Dowd (Louth, Fine Gael)
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Deputy Stanley might not like to hear the truth-----
Michael Kitt (Galway East, Fianna Fail)
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Does the Minister of State wish to take the point of order?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Minister of State needs to be honest. He knows the truth.
Michael Kitt (Galway East, Fianna Fail)
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Please allow the Minister of State to continue without interruption.
Fergus O'Dowd (Louth, Fine Gael)
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I will be happy to respond to the Deputy later.
Fergus O'Dowd (Louth, Fine Gael)
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Sinn Féin does not like to hear the truth. Every house in Northern Ireland pays, on average, €1,400 in household charges, including all local government charges.
Sandra McLellan (Cork East, Sinn Fein)
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What do they get for it?
Fergus O'Dowd (Louth, Fine Gael)
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While Sinn Féin supports charges in the North, in the South, they say there can be no charges for anything. The truth is that Sinn Féin cannot face both ways. They agree to charges in the North but not in the South.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There are no water charges in the North.
Fergus O'Dowd (Louth, Fine Gael)
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Charges in the North were increased by 2.5% last year. I refer the Deputies to their own publications.
There will be no privatisation of water services, as feared by many people.
Mattie McGrath (Tipperary South, Independent)
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The Minister cannot be trusted.
Fergus O'Dowd (Louth, Fine Gael)
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The legislation will be made as strong as is possible. If Members opposite have any proposals in terms of legislation we will be happy to take on board their views. The water network will remain outside of privatisation. It is not possible under existing legislation for it to be privatised. I am assured that will not happen.
People who own private wells will not be liable for water charges. A key issue is that of local authority staff. Currently, there are more than 4,000 local authority staff working in the water services area. They do a fantastic job and are very committed. I visited South Tipperary and met with people in charge of the water network there. What they do is not just a job but a way of life. There are available to address any issues that arise 27-4, 365 days.
Mattie McGrath (Tipperary South, Independent)
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The Minister of State should have called in for some tea.
Fergus O'Dowd (Louth, Fine Gael)
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I had coffee. I will have tea the next time.
Workers involved in water services in my county and that of Deputy Mattie McGrath and others are top-class. There is no threat to anyone's employment. The new water service will not come into operation until 2017 at the earliest. The local authorities will work with Irish Water or Bord Uisce. It is expected that new entity will also have an Irish name as requested by a number of Members. Everyone will be consulted on the appropriate name.
We are seeking to ensure the supply of water in this country is the most efficient it can be, which is a large and expensive task. This will cost €600 million over the next number of years. We will ensure that every county and town has the volume of water it requires. The recent Environmental Protection Agency report identified a number of areas where waste water - about which we have not yet spoken - is a problem, in respect of which we are incurring significant costs.
The Government will ensure transparency in this process. There will be no charge, in terms of cost of water to home, until 2014 and a free allowance, to be decided by Government, will be provided. We will ensure that we have the best water infrastructure and that - I have a commitment on this - when the implementation programme is to hand, possibly six to eight weeks time, there will be a full and proper debate on this issue at the committee on the environment in an effort to satisfy, in as much as it is possible to satisfy, all arguments in an open and transparent manner. We will take on board any constructive views offered. This debate is the start of that process.
Michael Kitt (Galway East, Fianna Fail)
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I understand Deputies Robert Troy and John McGuinness are sharing time. The Deputies have five minutes each.
Robert Troy (Longford-Westmeath, Fianna Fail)
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I wish to share two minutes of my time with Deputy Michael Healy-Rae.
Michael Kitt (Galway East, Fianna Fail)
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Is that agreed? Agreed.
Robert Troy (Longford-Westmeath, Fianna Fail)
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I would like to make a few brief observations on the recent debacle on this issue. Previous speakers have outlined their concerns in regard to the manner in which the Department of the Environment, Community and Local Government handled the introduction of previous charges, including the household and septic tank charges, both of which were a total fiasco. As such, there are grave reservations in terms of its ability to handle the introduction of this charge.
I welcome that the Government conceded to a debate on this issue. If this were really about water conservation we would be talking about capital investment to upgrade the water network countrywide. The majority of water lost is not lost on route to households rather it is lost in the network. We should be discussing rain water harvesting in public buildings, schools, hotels and so on. This water charge is another opportunity for Government to generate finance. The Government is, in terms of its proposed appointment of a regulator to oversee this service, abdicating its responsibility. Who will decide the free allowance and what charges will be paid?
Before imposing further charges on hard pressed families the Government should be looking at where cost savings can be achieved. The McCarthy report has been lying on a Minister's desk for the past couple of years without action. The Government could achieve its €500 million savings by implementing the McCarthy report rather than imposing further charges on hard pressed families. Families cannot handle any more charges. We do not know what the charge will be or who will set the rate? I hope this will be done by Government, the members of which have been democratically elected by the people. I abhor that this and the previous Government handed over the decision making process to bureaucratic regulators. We must put a halt to this.
The Croke Park Agreement provides that there can be no compulsory redundancies in the public sector. The Minister of State referred earlier to the 4,000 exceptionally skilled personnel working in the water services throughout the length and breadth of this country. What will happen to these staff when the new entity takes over? I call on the Government to implement the McCarthy report in order to achieve the savings required.
Michael Healy-Rae (Kerry South, Independent)
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I thank Deputy Troy for sharing time with me. It is obvious the Government is trying to hide behind Bord Gáis and the new water board. In the past, the HSE was established to allow the Government to hide behind that organisation. No member of the Government has referred to the excellent service that has been given by water men throughout this country over the years. I am not talking about the suit-wearing engineers inside in their offices when I talk about the tradition of excellent service. I am talking about the men who go out on Christmas Day or at Easter time to fix water leaks. These men go out during the holidays and on Sundays. They know exactly where every pipe is. They know the network inside out. Are we going to rob ourselves of that type of expertise?
Michael Healy-Rae (Kerry South, Independent)
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I am afraid we will eventually. The Government is continuing to deny the new body will eventually be sold. How can we believe it?
Michael Healy-Rae (Kerry South, Independent)
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The Minister of State was very clear a while ago when he read out his statement. The same people told us before last year's general election they would burn the unsecured bondholders.
Aodhán Ó Ríordáin (Dublin North Central, Labour)
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We never said that.
Michael Healy-Rae (Kerry South, Independent)
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They said they would protect the vulnerable people in society. They have broken every promise they made. I do not believe what they are saying. If they want to conserve water, as they suggest, why do they not ensure the leaks are fixed before anything else is done? For every gallon of water that goes into a house, half a gallon is probably lost through leaks. Is it not obvious? When we talk about this whole debacle, we have to reflect on the uncertainty, misinformation and confusion associated with it. The Minister, Deputy Hogan, who is in charge of it, is fumbling from one disaster to another. The Government put the wrong man in charge of this project. The Minister should be taken away from it. If he touched gold, it would turn to dust. I want to voice my complete opposition to what the Government is doing. It is making a mess of our water service. It is changing something that was not actually broken. All that is wrong with the delivery of water in Ireland is that there are too many leaks. If they are fixed, everything else will be fine.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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In the midst of all the confusion that was mentioned by Deputy Healy-Rae, there is a clear understanding that there is absolutely no business plan for this project.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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When the Government parties were in opposition, I agreed with them when they spoke about the regulators in this country. They said there were too many quangos of one kind or another, but now they have decided to give responsibility for this system to a regulator. We need to look at what the regulator will do. According to the Minister of State, the regulator will decide on the rate and the Government, in turn, will set the charge. When the regulator considers the costs, it will find that 40% of treated water - twice the OECD average - is going to waste. The regulator will learn that this country invested €2 billion in the water system between 2000 and 2010. One can take it that 40% of the €2 billion that was invested has gone to waste. There is no mapping system outside Dublin in terms of the pipes and so on. We know the system itself is not fit for purpose. Unless money is provided for infrastructure, the regulator will have to consider the cost of upgrading and ensuring treated water does not go to waste to the current extent. The Minister mentioned what happens in County Wicklow.
Fergus O'Dowd (Louth, Fine Gael)
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The charge for commercial water in the county is twice that in County Kildare.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The charge is Kilkenny is €3 per cubic metre of water, based on the "water in, water out" principle. The regulator has to consider all of that when it sets the price. Will the real figure of €500 per household come into play when that happens? This is what people are concerned about. I am raising it because I am concerned too. I would like a business plan to be put in place. The Government should evaluate the profitability or otherwise of a €3 rate per cubic metre of water, based on the "water in, water out" principle. I have taken the highest figure. Is it profitable to provide treated water to the commercial world, or indeed to households, at that rate? The Minister of State cannot answer that question.
Fergus O'Dowd (Louth, Fine Gael)
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I can say there has been a reduction of 40% in costs in Scotland over five years.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Minister of State should not damage his reasonable reputation by giving that answer.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Minister cannot say whether such a rate makes it profitable. Therefore, the regulator will have to allow the provider to decide what is profitable. That is the key to this. No business plan has been drawn up. I remind the House that just 52% of the total amount of money is collected in terms of commercial rates. It is an absolute disaster.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What will happen in terms of collection when the regulator applies its costs or charges? They will have to go after, in a very aggressive way, those in the commercial world who are using water. By extension, they will have to go after the householders who do not pay. That leads one to ask who will be cut off. Bord Gáis has cut off the supply of more customers more than most companies.
Fergus O'Dowd (Louth, Fine Gael)
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It has reached a new agreement with the Commission for Energy Regulation.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is a fact. It is in the report. When the legislation is published and the service agreement with Bord Gáis or the new company is drawn up, I will be looking to see the Government's policy in relation to the regulator. The manner in which that policy will be applied to the domestic situation in this country will be critical when the deal is being done. The Government might argue that the household charge is just €2 a week, but we all know people who are in such dire straits they cannot afford it. How far has the Government gone in its discussions with the staff involved? The Minister of State said 4,000 people are working in this area. According to the report, the figure is 3,600. It is broken down into different grades.
Fergus O'Dowd (Louth, Fine Gael)
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I accept that 3,600 is the correct figure.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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They cannot be moved on. Will those who do not want to leave the county councils be put back into that system in some other way? That is a critical aspect of all this because such an approach would add further costs to a local government system that has already been badly costed and represents poor value for money. That is the issue. Deputy Troy asked why the current Government and previous Governments have always gone after taxpayers and householders aggressively. Governments are not keen to apply the same aggression to achieving a reduction in the costs on the other side, in this instance, the cost of local government. If the Government implements the McCarthy report, it will save approximately €520 million and will not need to collect the €160 million it is looking for under the household scheme, for example. I appreciate they are two different issues, but the principle is the same. The Government simply will not go after the inefficiencies in the system.
Alan Farrell (Dublin North, Fine Gael)
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I welcome the Government's decision to provide for an early discussion on this matter. In light of some of the scaremongering tactics of recent weeks, it is relevant for us to debate this issue, get information into the public domain and begin this long-term process. It is readily acknowledged that it will take months, if not years, to roll out this system. The enormity of the task facing the Government will not stand in the way of its ambition to provide for considerable investment in this infrastructure and this long-term project, which will need to be worked out on a phased basis. It is a marathon, not a sprint. As a nation, we need to acknowledge the reality that a great deal of information will emerge at different stages between now and 2014, so that we are prepared to handle the emerging details in a constructive and balanced fashion. We would love to have the all the answers here and now. I agree with some of what other speakers have said about information. One of the difficulties faced by this Government is that it has to deal with agreements that were made by the previous Administration. In many cases, nothing happened after the agreement was reached and before this Government took office in March 2012.
In light of the substantial changes that have to be made on a societal level, it is not too early to start bringing people on board with regard to this issue. Up to this point, most of our people have never been asked to pay for water on a utility basis. Paying for water usage is no different from paying for a utility such as gas or electricity so we can light and heat our homes.
However, this is an extraordinary development, taking place in extraordinary times. I do not take this enormous shift in the perspective of the people for granted. I am very confident that my constituents in Dublin North are, in no uncertain terms, fully aware of the impact of the failure of successive Governments to invest in the water service network. This week alone, I have received numerous emails from Fingal County Council regarding water shut-downs in the area. From a consumer perspective, this is an enormous problem. From the taxpayer's perspective, it is completely unacceptable.
During the election campaign, it was quite clear that water charges were coming down the line. Charging was in our party's manifesto, and had already been agreed to in the national recovery plan and troika agreement laid out by the former Fianna Fáil-Green Party Government. However, we acknowledge this is perhaps the most difficult time to introduce a discussion on a new utility bill.
If this economic crisis has taught us anything, it is not to take anything for granted. If we identify waste, we must address it. We cannot just turn a blind eye because that is the easy thing to do. Taxpayers have forked out over a billion annually for a substandard water system. As well documented, 40% of the water we pay for is lost through leaks. If this were true for the gas, oil or electricity network, we would be making international headlines.
Ireland is the last country in the eurozone to take responsibility for its usage of the water resource. It is one of the many wasteful legacies of the Celtic tiger, during which we allowed our money to be poured down the drain on bad infrastructure when we had the means to invest in something for the future.
Let me refer to an email I received this afternoon from a senior staff officer in Fingal County Council with regard to three areas in Dublin North. The issue affects approximately 20,000 homes. The email states that, on Rath Lane in the Swords area, water was to be restored in seven minutes but has been unavailable since early morning. In the Baldolyle area, in Stapolin , Grange Park, Castlerosse and Red Arches – I refer to a part of the Dublin North-East constituency which is still in Fingal – the water was restored at 3.30 p.m. this afternoon having been unavailable for almost six hours. In Ballough, in the northern Lusk area and north of Swords, a very large area was without water for most of the morning due to the third or fourth breach in the mains in as many weeks.
As it stands, there are 36 different approaches to the provision of water in this country, that is, one in each local authority. If we are to justify such vast expenditure, we must change our approach to a unified, financially efficient process. The industry must become a properly regulated industry in respect of which the end user, the customer, can have legitimate expectations regarding service quality and delivery. Thus, if there are extenuating circumstances leading to water stoppages in years to come, the consumer can, in conjunction with the regulator, call for services to be restored.
There was a system failure on the part of the previous Government in that it failed to invest in water infrastructure. It is not helpful to use scare tactics and misleading figures continually. Deputy Collins used a number of figures for water charges, ranging widely from €100 to €700 or €800. I cannot imagine these charges being incurred in a home in which people are conscious they have to pay for water exceeding a certain generous quota, as has been stated repeatedly by the Minister, Deputy Hogan, for over a year.
Under the Fine Gael-Labour Government, we are attempting to reinvent the State. The provision of a unified and efficient water network is a significant shift that will reflect a new era of infrastructure, one that is responsible for its usage, mindful of our environmental impact and respectful of the value of its resources. Irish Water, or Uisce Éireann, will be established with this ethos in mind. It is one of the infrastructural developments undertaken by this Government and will create up to 2,000 jobs per annum, attract investment and bring us into line with our European counterparts. This will be a commodity company that will work for homes, businesses and the country.
The previous Administration entered into an agreement but it failed abysmally to honour it on behalf of the State. As repeated by the Minister, Deputy Hogan, and the Minister of State, Deputy O'Dowd, we want the best water system in Europe. There is no reason we cannot achieve that. We are the best in the world at so many things that there is no reason we cannot aspire to this also.
We cannot continue to live with a substandard water network, reliant on fragmented structures unable to achieve economies of scale. I am happy I can say to my constituents, who put up with water shortages three or four times a year, that this Government has, in a relatively short period since taking office, started the ball rolling in an attempt to address this problem. That is more than the previous Administrations ever achieved in their lifetimes.
We have no choice but to do this in the most effective and resourceful way possible. It is a mammoth challenge for both householders and the Government. I call on the Department to provide the public with as much information as possible throughout this entire process over the coming months.
Water meters will be a reality, regardless of unhelpful scaremongering that creates anxiety for householders and endorses the same wasteful practices that have brought us to this point. I hope practical policies will win out over those seeking political gain.
Water is essential and we are not in the business of cutting off vital services to those who cannot afford it. Bord Gáis has been selected as the provider of the new service due to its proven record dealing with customers in financial difficulty. If we are to clarify one thing at this point, it is that there is an important distinction between those who cannot pay and who will not pay. Those who cannot pay will not be left without water. Those who can afford the bill and choose not to pay will be addressed accordingly and this is the right approach if we are to respect those who pay their bills and obey the law.
When I was a councillor in the Malahide electoral ward of Fingal County Council, I was on the audit committee of the local authority for two years, having been Mayor of Fingal in 2007 and 2008. One of the startling figures that was presented to the audit committee was that Fingal had 300 km of pipes that required replacement. We should bear in mind that Fingal is a very new area by comparison with towns without a large number of new houses. Some 300 km of piping required replacement. It cost Fingal County Council approximately €30 million to replace 10 km of the water network in the preceding five years. My figures are based on recollection. If they are correct, it would take decades to replace the network that needs to be replaced, never mind pipes that fail in the meantime, the asbestos pipes that were installed in the 1970s or wooden pipes that were found in the Swords area two or three years ago. That is the scale of the difficulty we face.
Sandra McLellan (Cork East, Sinn Fein)
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Water is one of the most vital resources and we are obliged to ensure its protection. Sinn Féin is opposed to the introduction of water charges as a solution. Charging will only act as an extra tax. This comes at a time when so many families are struggling on a daily basis to ensure they can feed and clothe their children. They simply cannot afford to pay yet another unjust tax with no guarantee that the revenue gathered will be directed towards the water supply.
The question arises as to why the water infrastructure was allowed to fall into such a bad state during the Celtic tiger years when money seemed to be available for everything. This State had the revenue to undertake the necessary capital works to ensure water infrastructure was modernised, yet this did not happen. During the general election, the Labour Party Minister, Deputy Brendan Howlin, said his party was entirely opposed to water charges. Today, however, the Labour Party is backing this new tax.
A national strategy is required to deal with the need to increase capacity, the need to improve water quality and the need to repair the creaking water infrastructure that has been in place for many years. Evidence has shown that approximately 40% of water is lost through leaks in our water system. We fully understand the vital importance of conserving water and have made submissions on the introduction of dual flushing which, according to reports, would reduce consumption by 20 litres a day per household. We have made several recommendations on the issue of water provision including the introduction of district metering. This would allow for local authorities to monitor water usage and leakage at neighbourhood level. We are opposed to household charging and, therefore, metering as a means to measure usage on this basis.
It is evident this Government is out of touch with the public. Citizens simply cannot afford to pay yet another charge on their household. We in Sinn Féin believe that if this planned introduction of water meters goes ahead, it is more about the privatisation of the water sector and nothing to do with water conservation. We will resist this unjust tax all the way.
Dessie Ellis (Dublin North West, Sinn Fein)
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It is clear people are struggling through a myriad of taxes, be they stealth or otherwise, which have been introduced over the past several budgets. The previous crowd, as the Minister calls the previous Government, was also responsible for this. The Minister's own partners in government, the Labour Party, opposed water charges right up until they entered office. When I was on my local authority, my Labour Party colleagues made it very clear over the years that they were opposed to water charges. People are paying enough already through taxes, VAT, PRSI and the universal social charge.
I accept water is a precious commodity and we need to ensure adequate and safer supplies. The leakage of water varies across the country. An investment programme tackling this would provide a better means of preservation and job creation. The €500 million the Government proposes to borrow from the National Pensions Reserve Fund will be paid back over several years by ordinary people through installation of water meters. This will only add more pain to an already struggling population.
The move from local authority to a new semi-State company, the proposed Irish Water, is a retrograde step. All the expertise accumulated over the years in local authorities, the ease of access to services and points of contact will all be lost. They will be replaced by a new bureaucratic system with only some sort of a freefone service for people to access. Water should remain in public ownership through the local authorities. Why are we running down our local authorities? We are taking powers away from local authorities and, in turn, local councillors will pay a price down the road. This will lead to privatisation. In Dublin City Council, I remember the whole argument over bin charges. When the waiver was introduced, we were told it would stop the privatisation of bin collections. It did not. The allocations of water to each family will be whittled down over time. When the Minister's party is no longer in government------
Fergus O'Dowd (Louth, Fine Gael)
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We will continue to be in government.
Dessie Ellis (Dublin North West, Sinn Fein)
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In the last bad winter we had, local authorities responded magnificently to problems with water supplies because they had the expertise and back-up which will be lost when it is shifted over to this new semi-State company. It will be a retrograde step and people will resist it.
Larger families will pay a heavier price in water allocations. Will there be a standard charge? Will there be a charge which will eventually begin to rise? There probably will be. Many of the contracts will be outsourced. We need to examine the whole issue of the recycling of water and enhance our approaches towards it. The Minister referred to water services in the south of England. He should remember services there were privatised and the area is now suffering a drought.
Dublin city will face problems with water supply. From what everyone is saying, it will have to be sourced from the Shannon. This will involve significant costs and the expertise with the local authorities.
Jonathan O'Brien (Cork North Central, Sinn Fein)
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The Minister spoke earlier about the level of misinformation and scaremongering that has taken place in this debate. In the absence of any clarity from the Government, that is bound to happen. We have had no clarity on the funding model, the charges, the free allowance or even the criteria to be used to ascertain the free allowance. The Minister referred to a conservative estimate of a 10% reduction in water usage. He has, however, provided no research to back this up. If he has, I have certainly not seen it. In his speech, the only research he could produce to justify that 10% estimate was in a reference to RTE's "The Consumer Show" in which a family of five reduced its water usage.
Ireland compares to Manchester in population size. Water meters have been in place in Manchester for over 20 years and 152 litres per person per day is used there. In Dublin, where there are no water meters, individual usage is 148 litres per day. There is no evidence to suggest water meters conserve water.
The Minister claimed Sinn Féin is a partitionist party.
Jonathan O'Brien (Cork North Central, Sinn Fein)
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He accused us of doing one thing in the North and another in the South. The one thing we are doing in both the North and the South is trying to regain our economic sovereignty.
Fergus O'Dowd (Louth, Fine Gael)
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Is Sinn Féin charging €1,000 per house in the North?
Jonathan O'Brien (Cork North Central, Sinn Fein)
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If I could finish, I know sometimes the truth is hard to take but if the Minister listened he might learn something.
Michael Kitt (Galway East, Fianna Fail)
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The Deputy has one minute.
Jonathan O'Brien (Cork North Central, Sinn Fein)
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In the Six Counties we are trying to regain our economic sovereignty from London. In the Twenty-six Counties, we are trying to regain our economic sovereignty from the EU and the IMF while Fine Gael's policies are making this possibility even more remote. Instead, it is introducing an austerity treaty which will give us no hope of regaining our economic sovereignty. In the Six Counties, Fine Gael does nothing and the Minister has the cheek to call us a partitionist party.
Fergus O'Dowd (Louth, Fine Gael)
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Sinn Féin is a partitionist party.
Jonathan O'Brien (Cork North Central, Sinn Fein)
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How many public representatives does Fine Gael have in the Six Counties? None. I will take no lectures from anyone in Fine Gael about partition. The reality is partition suits the Fine Gael Party because it can use it as a cover to introduce all these charges and then, in some imaginative way, point across the floor to Sinn Féin Members claiming we are doing the same in the Six Counties.
Michael Kitt (Galway East, Fianna Fail)
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I must ask the Deputy to conclude.
Jonathan O'Brien (Cork North Central, Sinn Fein)
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The only non-partitionist party is Sinn Féin.
Michael Kitt (Galway East, Fianna Fail)
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Deputies Kevin Humphreys and Aodhán Ó Ríordáin are sharing the next speaking slot.
Kevin Humphreys (Dublin South East, Labour)
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It is a pity Deputy Ellis has left the House, as I remember debating in favour of water charges while I was a member of Dublin City Council. He has a selective memory. He should also remember he did not pay his bin charges, a decision that probably led to the privatisation of the city's bin services. Recently, he informed the House he still has not paid them despite his enormous salary.
I welcome the establishment of Irish Water and the Minister's clear commitment to the effect that it will be a semi-State company on a statutory footing and will not be privatised. Building up a proper water infrastructure is crucial to Ireland. Deputy McGuinness described a level of investment, but there was underinvestment for 15 years. Our water services are disastrous. Doing nothing is not an option. It is unfortunate the Deputy has departed.
Much of this situation has to do with the abolition of rates and the lack of strategic planning for a proper service. We have ended up with a patchwork system that has not received enough investment or been subject to proper planning. This is the legacy with which we have been left. Consider the most recent two winters when many areas of Dublin went without water for weeks. This situation is no longer viable. The capital and the Dublin region operate on a 1% margin. In fact, they run a deficit from Monday to Friday and build up a surplus at the weekend. City regions are drivers of employment and investment and we will not be able to attract foreign direct investment, FDI, if we do not invest in this regard. We need a sustainable investment model. Supply shortages in Dublin must be addressed soon. Deputy Catherine Murphy mentioned how County Kildare was a high usage area. Even if we wanted to attract another Intel to the Dublin region, we would not have the requisite water supply. Consider the thousands of jobs involved.
People refer to austerity, but we need a sustainable infrastructure to provide jobs. We must adopt a strategic approach to water. The development of a properly regulated and resourced new utility company is the best and cheapest approach. Irish Water will be a sustainable model.
Deputy Troy mentioned how we did not know how much leakage there was between the mains and the door, but we do. It is 18%. This is on record. If we fix every leak in the country without addressing that problem, we will still lose 18%. When every mains pipe in a small area in the Dublin region - the Merrion Road area - was replaced, there was still a high leakage rate. The cause was subjected to further investigation and is now on record. Two or three houses were using up to ten or 15 times the average amount of water. This problem was addressed.
We must work in partnership with residents when addressing leaks. Given that we are considering metering and upgrading the infrastructure, it may be possible to give grants to fix leaks while workers are in the area. The possibility of 2,000 jobs has been mentioned. These should be given to young people. Under EU regulations, sectors with high rates of unemployment can be targeted, and there is a high rate among young people.
Doing nothing is not an option. Every Deputy who has contributed agrees we cannot continue as we have been. However, we cannot use all the money to fix the leaks. If we do not set up a sustainable method of funding that work, we will revert to the same position in ten or 15 years time because of the lack of constant servicing. There needs to be a revenue stream as well as ongoing infrastructural repairs, upgrades and investments. Water gives us an economic advantage and we need to make the best we can out of it.
Aodhán Ó Ríordáin (Dublin North Central, Labour)
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The announcement of a new water body came as no surprise. As a Deputy, the Department of the Environment, Community and Local Government communicated to me about a consultation period that would end on 24 February and would seek submissions from the public. I engaged with my constituents and received a number of submissions. Until recently, there has been a conversation with the public concerning the potential of a water charge.
This debate gives the House an opportunity to discuss water conservation and reinvestment in water infrastructure. It also gives us an opportunity to have a new maturity in Ireland about the connectivity between taxation and local services. As Deputy Kevin Humphreys correctly stated, this connectivity was broken in 1977. Since then, people have not seen any connectivity between the taxes they pay and the services they receive.
We need a level of vision. People will not accept it if we tell them they will pay for something that will not improve. There is a significant water pressure problem in my constituency. For two winters in a row, many areas in Dublin suffered water shortages due to freezing temperatures. There have been boil notices in places like Galway and Ennis. Everyone knows about the system's level of leakages.
As Deputy Kevin Humphreys stated, it is difficult to attract FDI to my city while this situation persists. How can people be convinced to spend a weekend break in Dublin at Christmas if they cannot be assured of getting water from taps? The local authority system has depended almost completely on the commercial sector and schools to pay water rates. This is not sustainable and I welcome the proposal of a more realistic model, which we will be able to discuss for two years.
I have always favoured water rates, but there is a natural nervousness among those who are not in a position to pay. We have a responsibility to them. Where they have high levels of domestic water usage, there must be a generous free allowance. There must also be a recognition of areas with poor water supplies and pressures. However, it would be crazy to stand over a system in which up to 44% of treated water is lost within the system.
Connectivity is important. With the best will in the world one can have all the advertisements and public information campaigns on water conservation one likes. Unfortunately, it will not be until water is metered that conservation is likely to occur.
I have never believed in flat taxation on anything, be it in the form of bin charges or water rates. I am delighted this has not been the suggestion in this instance and that there will be no upfront charge. I also welcome that Irish Water will be a publicly owned body.
We must tell people we have had difficulties with the water system and this new system is a unique opportunity to get past those difficulties and to make the water system dependable and quality-assured. People state they pay taxes for wasteful and inefficient services they do not trust. We need to show a vision and point to this as a fantastic opportunity. Although it stems from the memorandum of understanding, from a social democratic perspective in a mature society the imposition of a water charge is progressive because it is environmentally minded and is aimed at conserving water.
Connectivity between taxation and services is required. As I believe in the public provision of essential services, including water, I would support the imposition of a charge. If it ensures that we never have a water shortage again, that leaks are fixed and that areas of my constituency which have had diabolical water pressure for the last 100 years will finally get the water service they deserve, I will support it.
Stephen Donnelly (Wicklow, Independent)
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At its most elementary this measure is about charging people for water. Solid arguments have been made for charging people for water but 1.6 million people in this country live in households that are left with less than €100 per month. They are on the edge. The Cabinet handbook states that a poverty impact assessment must be carried before implementing a measure of this nature. However, when I tabled a parliamentary question to ask the Minister for the Environment, Community and Local Government whether an assessment had been carried, he ignored the question.
Fergus O'Dowd (Louth, Fine Gael)
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Poverty is an issue that will be examined in its totality.
Stephen Donnelly (Wicklow, Independent)
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It is a matter of concern that a poverty impact assessment has not yet been carried out as part of the proposal.
Stephen Donnelly (Wicklow, Independent)
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The Taoiseach stated he does not know the level at which the charge will be set and this morning the Minister spoke about referring the question to the regulator. During Leaders' Questions the Taoiseach indicated that asking how much the Government planned to charge was as preposterous as announcing metro north and expecting to know the fares. I have put together financial models for large capital projects. The first number that one calculates is the fare and from that basis one calculates how much money should be allocated in up-front capital expenditure.
Considerable confusion has arisen around Irish Water. I welcome its creation but it will be a massive utility company employing up to 4,000 people. We need to ensure it delivers a high quality service that provides value for money. What do we know about it? Instead of a competitive tendering process there was a strange, loose application and private sector entities were not given an opportunity to bid for the entire contract or even for elements of the project, such as maintenance of reservoirs or billing. The applications from the semi-State companies do not appear to have been independently assessed. An interdepartmental group reviewed the submissions but the Minister has refused to share the submissions from Bord Gáis and Bord na Móna with the Oireachtas. I asked to see them but was refused on the grounds of commercial sensitivity. If a State body is running a monopoly contract from which the private sector is explicitly excluded, there is no commercial sensitivity. I suggest the officials are hiding behind commercial sensitivity to prevent their work from being investigated by Members of this House. I am deeply concerned about this.
With regard to the semi-States and whether they are the best and only bodies for this project, PwC carried out an independent assessment which found:
There is limited experience of water services being combined with other utilities or roads provision... [O]n balance, PwC see no compelling reason to assign responsibility for water services provision to another State agency... PwC expect that public procurement considerations will dictate that the partner would have to be selected through a public tendering process open to the private sector as well as the State agencies.
These findings have been ignored. I am not advocating that private sector entities should run our water company but they should at least be allowed to apply to maintain reservoirs, fix the pipes or run the call centres at a certain level of quality for a certain amount of money. We should be able to compare what they would charge with Bord Gáis's estimates. However, the Government will not even reveal the latter's estimate because it is supposed to be commercially sensitive.
It is nuts to spend approximately €1 billion on meters in the current economic context. It might make sense in a few years' time but it is crazy at present. Labour Party Deputies made good points about conservation, water scarcity and infrastructure for job creation but I respectfully suggest that a better way of conserving water is to build additional capacity and fix the leaks rather than invest €1 billion in the ability to charge people.
These proposals have not been subjected to a poverty impact analysis or proper financial modelling. There was an inhouse process without external inputs. There is a lack of joined up thinking in terms of developing synergies between ESB's smart metering and water metering. The absence of transparency is disappointing and in blatantly ignoring reasonable questions, the Minister has revealed a lack of accountability.
Luke Flanagan (Roscommon-South Leitrim, Independent)
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I believe the polluter should pay, although that depends on how one defines a polluter. In trying to be completely holistic I am not even going to use paper in this debate so I do not damage the environment. Other Deputies will be punished for what they have done but I will not.
One should start paying after one pollutes. It appears that people will not be charged until their usage goes above a reasonable level. This way one ensures conservation. However, the Government is making a mistake in introducing a standing charge. As Deputy Donnelly noted, people are put to the pin of their collars when it comes to their household budgets. They have only €100 left at the end of the month and with increases in fuel prices and the cost of living they will not even have that much in two years' time. The Government has a clear roadmap for preventing pollution and waste but it will scupper its own plans if it introduces a charge for those who cannot afford it regardless of whether they are polluting. We are already paying for water through our general taxes. Clearly the entire cost of supplying water will not be covered by the savings generated through ensuring people do not go above a certain limit but the shortfall should be made up by higher earners rather than the weak, who will otherwise be threatened with having their water turned off.
It was pointed out earlier that 85% of the water supplied across the European Union is administered by local authorities. That is the best system for delivering water to end users but it will not work in Ireland as long as local government is unaccountable. I have not heard anyone suggest that we could reduce water leakage by changing the local authority system.
I have had the experience of attempting to get a water leak fixed under this flawed local authority system. As councillors have no power and the people they approach to get leaks fixed do not have to listen, a water leak approximately seven miles from my house ran like a bath for seven years.