Tuesday, 2 December 2014
Ceisteanna - Questions - Priority Questions
Water Meters Expenditure
84. To ask the Minister for Environment, Community and Local Government his views on the increase in the cost of the water metering programme from €431 million to €539 million; and if he will make a statement on the matter. [45940/14]
My question pertains to the cost of the water metering programme. A couple of weeks ago we learned that the estimated cost had jumped by €100 in the space of eight weeks in 2013. The final cost is €539 million. I recall figures of €320 million and €350 million being mentioned on the Government benches over the past two years. How did we arrive at a cost of €539 million?
The Water Services Act 2013 provided for the establishment of Irish Water as an independent subsidiary within the Bord Gáis Éireann Group, now Ervia, and assigned the necessary powers to allow Irish Water to undertake the water metering programme. Following a tender process, the final cost of the metering programme was determined at €539 million. The cost reflects the outcome of the procurement process, taking account of the overall logistics of a programme of this scale and complexity.
The initial estimates of the cost of the domestic metering programme were based largely on the experience of the non-domestic metering programme, the group water sector and market soundings, as there was no precedent for a programme of this scale over a very short duration. We were not necessarily comparing apples with apples and oranges with oranges. The estimate was based on much smaller-scale projects than the national domestic metering programme and was not a definitive budget. As with all capital projects, estimates are refined as the detailed technical scoping of the project evolves, including matters such as appropriate risk allocation and programme management, and ultimately it is the competitive process that determines the price, and rightly so. The final budget figure reflects the outcome of the detailed scoping of the project and the procurement process.
The estimated cost of installing meters has increased by 20%. That represents a huge proportion of the taxpayers' and public moneys that have been soaked up thus far by Irish Water for the metering programme. I must assume that the consultants who came up with this estimate were the same people who were paid €85 million last year. There is considerable anger about that. Surely it would have been far better had some of this money been used to address real problems of water conservation and reducing water usage. In May 2013, the consultants estimated the cost at €431 million, but by the time the contracts were awarded in June, the figure was €539 million. Meanwhile, a survey carried out by local authorities, which would have been more accurate, came up with a figure of €539 million. Does the Minister not find it unusual that the figure determined through the local authorities' survey happened to correspond with the estimated cost of the contracts for installing meters arrived at six months previously?
The question of whether it was unusual was never put to me. I have no reason to disbelieve people. We need to be clear that the procurement estimate of €431 million was based on the best information available at the time. The Deputy is aware that this estimate was based on data relating to non-domestic usage. It was also based on group water data. It is not entirely accurate to suggest there was a big jump from €431 million to €539 million in a short period. While that figure was cited a number of times in the months prior to completion of the tendering process, it was the last estimate available. That does not mean it was the last estimate available a few months previously. It was an estimate that had been in circulation for some time. The period of time for a jump of that nature is not exactly accurate. We must also remember that a tendering process was ongoing.
Obviously within that time period if there was new data or a re-analysis of the actual cost, it was not something that would be made public in the middle of a tendering process.
There are two very unusual facts here. First, we went from talking about €340 million a few years ago, and as recently as a year ago in this House, to talking about €539 million this year. It is also more than unusual that the final figure for the estimate by the local authority at €539 million just happens to be the same figure as that awarded for the contracts in the previous summer. That is highly unusual. If the Minister does not consider it unusual, the public and I do. The cost of the metering programme has soared from in excess of €300 million to €349 million. Will it even stop at that? Surely it is time for Irish Water to be scrapped. It is time for the Minister to cut his losses and abandon the metering programme. Indeed, in keeping with the Minister's own rules, is it not time to make that body accountable to the Committee of Public Accounts, the Comptroller and Auditor General and to this House, which it is not at present?
In regard to the Deputy's last comment, everybody is accountable across the suite of groups the Deputy mentioned, so it is a matter for the groups themselves. Irish Water is necessary, as I have made clear. Without it we simply will not have a water supply to the scale required in this city ten years hence, when people such as the Deputy and others will be roaring and shouting about why we do not have the water we need and why the Minister with responsibility for the environment, be it me, my predecessor or my successor, did not do something about it. Most reasonable people know we must deal with this issue from the investment point of view. If the investment is not made, there will be problems all over the country, including in the Deputy's county, my county and everywhere else.
I have been quite clear about the procurement process. The estimate was based on non-domestic information and on group scheme data. At the time it was an estimate. It was a long time before the tendering process, and once the tendering process was under way it would not have been appropriate for other data to be put in the public domain, considering a number of tenderers would have been completing the details of what they were pitching and so forth. It is clear that the figure which emerged from the tendering process is the figure that is required.