Tony Mulcahy (Fine Gael) | Oireachtas source

-----but we have the boss here today, in essence, who will give us the answers we need. The reason he is in the House is to answer all the questions the Senator raised. I have every confidence that we will not end up in the mess created by some of the other agencies set up here.

In January I had the opportunity to speak in the House on this issue. I am pleased to see the Minister of State back in the House today to make other statements on Irish Water. As I said then, water is an essential life resource. We cannot live without water. Every day we consume vast quantities of it washing ourselves and our clothes, preparing food, flushing toilets, washing our cars and drinking it. In industry it is a key ingredient in the production process. Irish people use approximately 150 litres of water each day. Importantly, there is no new water available on earth and therefore we must mind what we have.

The establishment of Irish Water has its origins in Fine Gael's new economy and recovery authority, the NewERA investment proposal, which was formulated in 2009. Subsequent to the general election in February 2011, the programme for Government was agreed between the coalition parties and that provided for the establishment of Irish Water, which is to be a State-owned national water authority.

In June 2011, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, through his Department, appointed consultants PricewaterhouseCoopers to carry out an independent review of international models for a water and wastewater service. The aim of that review was to identify a model that could be structured for the State to enable the most cost-effective delivery of water and water services for the end user. Following on from that report, which was presented to the Government in January 2012, and further consultations with relevant stakeholders, a decision was announced in April 2012 that Bord Gáis Éireann would be the body to take over the role, currently handled by the 34 local authorities, of providing and treating water and wastewater. Regulation of the industry is to be the function of the communications and energy regulator.

We must get real about the way we manage our water resources and finance our water infrastructure. The model we have, with 34 authorities, many layers of administration and no economies of scale, is costing too much. We must see all stakeholders brought on board, be it the unions that represent those working for the local authorities who are worried about their futures, the local authorities which have invested taxpayers' money in infrastructure, the managers of those local authorities, or, importantly, the end users who will ultimately have to pay for the water they consume. I welcome the Minister's earlier statement today that the consultation process with the management and unions is under way. It is the right way to proceed.

As of 2010 the State spent ¤1.2 billion on water services. Operational costs amounted to some ¤715 million, with capital expenditure of over ¤500 million. The provision of water services in Ireland is double the cost of water services in Scotland. That cannot continue. The population of Scotland was 5.2 million people in 2010 in an area of approximately 78,000 square kilometres, while we had a population of 4.6 million in 2011 in an area of approximately 70,000 square kilometres. We have a smaller area in which to maintain a pipe structure and a smaller customer base, yet it costs us twice as much as it costs Scotland to provide water. We must find ways of addressing that anomaly. The creation of a single unitary body instead of the current 34 bodies is a major step in the right direction.

A major problem with the current model is that an average of 40% of the clean water produced is lost through leakage and waste in some local authority areas, while the percentage is even higher in others. That equates to hundreds of millions of euro worth of water a year simply flowing away. In these days when every euro counts, the taxpayer cannot afford for that to continue. A recent example was in July 2012 when a 15-inch water main that flows from the Drumcliff reservoir outside Ennis in County Clare ruptured and 4.5 million litres of good quality drinking water was lost in the space of a few hours. If one were to go into one's local shop and buy that amount of bottled water it would cost millions of euro. This is happening not just in local authority controlled infrastructure but on private land where underground leaks have not been detected because many people do not have meters outside properties to monitor consumption and thus identify excessive water flow rates.

As part of the many onerous conditions of the EU-IMF-ECB programme negotiated by the previous Government, we must introduce water charges during this programme period. That is not something the Government wants to impose on householders but we have no choice in the matter.