Tony Mulcahy (Fine Gael)

I welcome the Minister of State, Deputy O'Dowd, to the House. Water is a resource that is essential to life. Every day we consume vast quantities of water, washing ourselves, and our clothes and dishes, flushing toilets, cleaning cars and drinking it. Industry uses it as a key input into the production process. Irish people use approximately 150 l of water each day. The single biggest issue facing the country is access to good quality water in the volumes that citizens require and industry needs to function. Hundreds of thousands of people depend on water in our taps. One of the key prerequisites for companies deciding to set up manufacturing facilities here is water, the others being cheap energy, a benign tax environment and the availability of a well educated workforce. Water is a finite resource and we cannot create it as easily as mother nature does. In a country where it rains nearly every second day, one would think the stuff should be free, but one would me mistaken. I recently heard a man with a water recovery system comment that we have world-class rain here.

The country is spending approximately €700 million a year on producing clean potable water, which works out at approximately €1.9 million a day or €80,000 an hour. The problem is that approximately 43% of our clean water is lost through leakage and waste. This equates to 301 million l of water a year flowing away. In these days when every euro counts, we cannot afford for this to continue. The solution is the establishment of Irish Water, which is a key element of the programme for Government. By centralising control over how water is treated we can reduce water loss and save the economy vast amounts of money.

We have 34 local authorities producing clean water. We have an infrastructure that is creaking because of age and pipe makeup. Some pipes laid early in the 20th century are corroding and reducing in size because of sediment build-up and chemical reaction. We have a problem with the presence of lead pipes in older parts of our towns and cities, which pose a serious health risk and must be removed. We have problems with water pressure in certain areas, with cast iron pipes - in my town of Shannon that is a big problem. If the pressure in the mains were increased we would have more fractures and leakages. This also poses a serious risk to life in the event of a fire as the fire brigade might not have sufficient water pressure to quench a fire. During last winter's big freeze local authorities throughout the State had to send out emergency services to distribute water, which had to be moved around by bulk carrier to replenish areas where vast amounts of water were lost because pipes had burst.

We need to rethink how we spend taxpayers' money. The Government is engaged in a public consultation process up to 24 February with interested parties on how this new utility company will run and who should run it. As vast amounts of money need to be spent upgrading current infrastructure through the relaying of pipes, and the construction of new reservoirs and treatment plants for domestic water and waste water, somebody will need to pay for this. Irish Water will be a State company but will also require investment from the private sector. This should not be seen as a threat to those working in local authorities who currently look after our fresh and wastewater needs, but an opportunity for new money to be invested in the latest technologies on the market.

To make their jobs easier and less stressful is it not better for them to have systems that can locate failures remotely from centrally located control centres, rather than going out into the field and spending hours trying to pinpoint where pressure has been lost and finding the exact location between two points.

As part of the EU-IMF programme, Ireland is committed to the introduction of water charges by the end of the programming period, which ends in 2013. Under the EU water framework directive we are required to charge consumers for the cost of water and treated waste water must take into account the full environmental costs. These requirements will lead to the introduction of water metering with the user paying the costs.

Commercial water rates are costs that businesses must pay. Prior to 1977 domestic ratepayers also contributed an element of their rates bill to pay for the costs of fresh water and waste water. The Government is committed to having a fair scheme of water charges under which households will receive a free allowance with charges applied for consumption above the relevant threshold. Households currently spend vast amounts of money on bottled water, which can cost up to €2 for a two litre bottle. This is madness as we should be able to drink water, as we used to do, from kitchen taps without any worries about quality. When a water source becomes contaminated the householders affected must buy bottled water or endure boil notices, such as that which occurred in Ennis between May 2005 and December 2009 when e.coli was found in the local supply or the problem of cryptosporidium in Galway's water supply some years ago. Just this weekend, water had to be brought in by bulk carrier to residents of parts of County Limerick following an oil leak into the River Deel. The leak affected areas such as Askeaton, Pallaskenry, Kildimo and Shanagolden.

We are obligated under the terms of the EU water framework directive to protect our water sources. Some 83% of water here is sourced from surface water such as lakes and rivers, 11% is sourced from ground water such as aquifers and 6% is sourced from springs.

In the next two to three years a programme of installing water meters to cover 1 million domestic premises will create approximately 2,000 jobs. This scheme will give work to many of those who have lost their jobs in the construction industry and we should ensure that jobless Irish people secure these jobs. The protection and creation of Irish jobs must be a key element of the programme. There is no point in putting contracts to tender to be won by overseas companies which will bring in outside labour to carry out the work when thousands of Irish people are more than capable of doing this work. It is critical that this work is done by Irish people and companies.

Once this part of the capital programme has been completed, substantial investment will be required in water infrastructure, including the construction of new treatment plants, pipelines, reservoirs and control centres. This will result in the creation of new jobs for engineers, surveyors, plumbers, technicians and scientists such as microbiologists. Additional spin-off jobs in the leisure and tourism industries can be created in areas where new reservoirs are developed as these can be used for leisure and pleasure activities such as sailing and water sports.

The regulator charged with oversight of the new utility will ensure consumers are protected and the utility is managed and works to the highest international standards. The creation of Irish Water will result in economies of scale, fragmentation will be removed, control will be tighter through regulation, staff who have local knowledge will continue to be involved in water services, new infrastructure will be built locally and nationally and the conservation of water will take place once consumers realise that water must be paid for and waste controlled.