Malcolm Noonan (Carlow-Kilkenny, Green Party) | Oireachtas source

On behalf of the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, I am happy to have the opportunity to outline before the Seanad the Water Services (Amendment) (No. 2) Bill 2022. The purpose of the Bill is to separate Irish Water, otherwise Uisce Éireann, from its parent company, Ervia, and to establish it as the stand-alone national authority for water services. The Bill delivers on the programme for Government commitment to retain Irish Water in public ownership as a national stand-alone regulated utility.

The Minister for Housing, Local Government and Heritage is the majority shareholding Minister for Ervia, which delivers strategic national infrastructure in the areas of gas and water through its subsidiaries, namely, Gas Networks Ireland and Irish Water. The establishment of two separate State companies to operate the gas network and develop our water services provides the optimal solution to meet the future challenges of decarbonising our energy supply and modernising our water services. The decision to separate Irish Water from the Ervia group is in the best strategic interests of the water services and gas networks businesses.

Following legal separation, the remaining Ervia-Gas Networks Ireland business will predominantly, both in terms of activities and revenue, be the operation, maintenance and development of the gas networks and interconnectors that are in its ownership. Separately, my colleague, the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, is developing legislation to provide for the integration of Ervia with its subsidiary Gas Networks Ireland to become a single entity, Gas Networks Ireland. That legislation will be presented to the Houses of the Oireachtas in due course. The Bill is about separating Irish Water, the subsidiary, from its parent, Ervia. It does not deal with the transformation process and the movement of local authority services staff to Irish Water. That is a separate and distinct policy process being progressed in parallel.

The 2021 policy paper on water sector transformation charts the course for completing the institutional reform programme by fully integrating water operations within the organisational structure of Irish Water. The transformation of Irish Water into the publicly owned national water services authority has the potential to create new jobs and training programmes. The framework for future delivery of water services, identified through engagement at the Workplace Relations Commission, WRC, which concluded on 24 June 2022, will now enable Irish Water to work in conjunction with local authorities and current water services staff to complete the integration of public water services into its own organisational structures by 2026. A paper entitled "Irish Water Transformation - the Wider Policy Context" was shared with unions on 18 July 2022 to reflect the engagement outcomes, and is available to Senators in the Oireachtas Library.

The Bill concerns itself with the technical aspects of separating Irish Water from its parent. As such, it makes no provision for a referendum on water. The wording of a referendum is focused on ensuring that the entity tasked with operating the public water system, that is, Irish Water, must always remain in State ownership. The Government will consider a referendum proposal on water ownership in conjunction with the anticipated recommendation of a proposed referendum on housing from the commission on housing. The Minister, Deputy Darragh O'Brien, intends to bring forward proposals on both referendums to the Government for consideration in the near future.

This is a relatively short Bill, comprising four Parts, 31 sections and one Schedule. It is largely a technical Bill. Part 1, covering sections 1 to 4, inclusive, addresses preliminary and general matters. Part 2, which takes in sections 5 to 26, inclusive, provides for the reorganisation of Uisce Éireann and provides that Uisce Éireann will no longer be a subsidiary of Ervia. The Bill provides that Irish Water will be known only as Uisce Éireann and it outlines the character of Uisce Éireann - the national authority for water services. The Bill provides for a change in the share ownership arrangements such that the shares in Uisce Éireann are held by both the Minister for Public Expenditure and Reform and the Minister for Housing, Local Government and Heritage, similar to the approach for other State-owned bodies.

A new non-executive board of Uisce Éireann and its chief executive are now being prescribed in primary legislation rather than in Uisce Éireann's constitution. One of the new directors will be nominated by the Irish Congress of Trade Unions. The Minister, Deputy Darragh O'Brien, intends to appoint Mr. Tony Keohane as the chairperson of the board of Uisce Éireann. Mr. Keohane is currently the chairperson of the Ervia board. On separation, he will cease to be chairperson of Ervia and will be appointed as chairperson of the enduring Uisce Éireann board. This appointment is critical as the new Uisce Éireann Board transitions from being governed by its parent, the Ervia board, to being a fully independent board. Mr. Keohane's experience will be essential in ensuring continuity at a time when Uisce Éireann is undergoing significant changes, including the separation and transformation processes. Similar to the chairperson, the Minister intends to appoint some other existing Ervia board members to the enduring Uisce Éireann board on separation. A public appointments process was recently undertaken to identify candidates to fill vacancies on both the Uisce Éireann and Ervia boards. It is intended that both boards will include members with the appropriate skills and competencies necessary, as well as overall compliance with the code of practice for the governance of State bodies and its annex on gender balance, diversity and inclusion. This will ensure a smooth transition for the new board of Uisce Éireann.

The Bill provides for enhanced accountability and auditing arrangements such that Uisce Éireann will be subject to a dual audit by both the Comptroller and Auditor General and its commercial statutory auditor under the Companies Acts. It also provides that Uisce Éireann will be accountable to the Committee of Public Accounts. This dual role arises out of the provisions of the companies legislation, Irish Water's governing legislation and the Comptroller and Auditor General's legislation. The heightened levels of accountability and transparency applying to Uisce Éireann are commensurate with the level of Exchequer funding of the company. As a consequence of this policy change and the overlap in functions, the Bill provides for the dissolution of the Water Advisory Body. The Committee of Public Accounts is best placed to hold Uisce Éireann to account and to consider the transparency and accountability of Uisce Éireann and its performance. Uisce Éireann's chief executive and its chairperson will be nominated persons to give evidence before the committee. In view of the introduction of complex accountability and auditing arrangements for Irish Water, the Minister, Deputy Darragh O'Brien, is anxious to ensure that legal separation takes effect from 1 January 2023.

The Bill removes Ervia's functions in respect of water services. Provisions for the transfer from Ervia to Uisce Éireann of those staff, rights and liabilities, contracts and records which relate to functions of Uisce Eireann are also included.

Part 3, which takes in sections 27 and 28, deals with the dissolution of the Water Advisory Body, which will cease to have advisory and reporting functions on 1 January 2023 when Uisce Eireann becomes accountable to the Committee of Public Accounts. From a governance and transparency perspective, the Water Advisory Body will complete its work in respect of 2022 while statutorily in existence. An appropriate period is being given to the advisory body to complete its outstanding reports prior to its formal dissolution, which is expected to take place on 28 February 2023.

Part 4 takes in sections 29 to 31, inclusive. The Schedule is the final Part of the Bill and deals with consequential amendments to other legislation.

In conclusion, I am thankful to the Joint Committee on Housing, Local Government and Heritage for the detailed pre-legislative scrutiny that was afforded to the general scheme of the Bill in September 2021. I am glad to say that the Bill reflects the committee's recommendations. Since 2013, Irish Water has carried out its water services functions under the umbrella of its parent company, Ervia. This Bill allows Irish Water - Uisce Éireann - to function as the stand-alone national authority for water services. I look forward to Senators' contributions as we progress the Bill through the House.