Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 231: To ask the Minister for the Environment, Heritage and Local Government the reason a group water scheme with over 1,500 members using 700,000 gallons of water per day on average is being forced into a DBO bundle when a nearby town scheme with less than half the water needs can go it alone; if it is EU policy that in order to draw down EU funding group schemes must join bundles or the person who makes this a requirement of funding; his views on whether without the leadership of a small group of persons these 1,500 families would still be without a water scheme; and if he will make a statement on the matter. [38628/05]

Dick Roche (Wicklow, Fianna Fail)
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I assume that the Question refers to the Donaghmoyne group water scheme, County Monaghan. The provision of water treatment facilities through grouped or bundled DBO contracts was originally pilot-tested in Monaghan on the basis of a recommendation by the national rural water monitoring committee. The pilot project initially involved 11 group water schemes, including Donaghmoyne, and three local authority public water supply schemes. My Department provided a 100% capital grant to finance the project. The Donaghmoyne group scheme subsequently withdrew from the contract, notwithstanding the special 100% grant made available to schemes participating in the pilot project.

I am satisfied that the pilot project clearly demonstrated that the bundled DBO approach provides good value for money in terms of both capital and operation and maintenance costs over the 20-year service phase of such contracts. This approach has now been mainstreamed with approximately 246 group schemes serving approximately 44,000 rural households participating in bundled DBO contracts around the country. The logistical challenge of upgrading water treatment facilities for these group schemes within the short timeframe for ensuring compliance with the drinking water regulations can best be met through grouped or bundled contracts.

DBO procurement is also the preferred procurement route for new public water and sewage treatment facilities, together with bundling of schemes where it has the potential to produce economies. There are many such bundled schemes nationally. In the case of the water supply scheme for Carrickmacross, the planning of the scheme was not sufficiently advanced for it to be included in the Monaghan pilot project. However, the preliminary report for the scheme subsequently approved by my Department envisages the use of DBO procurement; and leaves open the possibility of bundling this scheme with others.

EU co-financing is provided for a number of measures under the rural water programme, including the provision of water treatment facilities for privately sourced group water schemes. EU co-financing is available for projects procured by both conventional and DBO contracts. The eligibility criteria include compliance with public procurement, financial management and control procedures, including prior approval of technical specification and approval of grants in advance of commencement of works.