Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

707. To ask the Minister for Environment, Community and Local Government the expected expenditure by Irish Water in 2013, broken down by administration, salaries, capital expenditure and the water metering programme; and if he will make a statement on the matter. [46918/13]

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

708. To ask the Minister for Environment, Community and Local Government if he or any officials in his Department sign off on an expenditure plan for Irish Water in 2013 and 2014; if his Department provides any oversight on this expenditure before it occurs; and if he will make a statement on the matter. [46919/13]

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

709. To ask the Minister for Environment, Community and Local Government the funding model for Irish Water in 2013 and in 2014; the sources of revenue thus far; and if he will make a statement on the matter. [46920/13]

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

710. To ask the Minister for Environment, Community and Local Government the amount that has been spent by Irish Water on consultancy services in 2013; if he will indicate the companies or persons involved; and if he will make a statement on the matter. [46921/13]

Fergus O'Dowd (Louth, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 707 to 710, inclusive, together.

The Water Services Act 2013 which provided for the establishment of Irish Water as a subsidiary of Bórd Gáis Éireann to be formed and registered under the Companies Act also provides for the normal governance arrangements for a commercial State body in relation to its financial sustainability. This includes ministerial consents for borrowing and the entering into capital commitments by the subsidiary, as well as obligations for copies of the accounts of the subsidiary to be laid before each House of the Oireachtas.

Further proposed legislation will provide for t he transfer of water services functions to Irish Water from local authorities, which will address matters such as the preparation of water services strategic plans to be signed off by the Minister This proposed legislation will also provide for the establishment of an economic regulator for water services within the Commission for Energy Regulation (CER). While the primary function of the CER will be to protect the interests of customers and to ensure that a consistent and appropriate level of service is provided to them, it will also be responsible for approving the tariffs to be charged by Irish Water. In fulfilling its functions, the CER will have regard, inter alia, to the need to ensure that there is an efficient system for the provision of water services and the need to promote the conservation of water.

Consequently, following passage of this legislation, a new funding model will be in place to meet both capital and operational costs of the new entity. Irish Water’s costs in the coming years will be funded through a mix of revenue from the domestic and non-domestic sector, third party finance (such as the Ireland Strategic Investment Fund, EIB, bank lending and capital markets facilities) and State support which may be in the form of both equity and subvention.

Bórd Gáis has put in place appropriate programme management arrangements to establish Irish Water, to prepare for the transfer of assets, liabilities and functions from local authorities from 1 January 2014, provide for customer service and billing and implement the domestic water metering programme. Expenditure on this programme, including details of consultancy costs, is a matter for Bórd Gáis/Irish Water and these costs are not being funded from the Exchequer. The National Pensions Reserve Fund has provided a bridging loan facility to Irish Water to meet the costs arising to the end of 2013. This includes the initial stages of the domestic water metering programme, the full cost of which is €539m excluding VAT. The ministerial consents required under the Water Services Act and the Memorandum and Articles of Association of Irish Water were provided to Bord Gáis and Irish Water in relation to this expenditure and borrowing.

My Department has committed to funding of almost €0.7m, to Irish Water in 2013 to fund the cost of a pilot study in relation to Phase 2 of the Metering Programme which is targeted at metering those properties that were not meterable in the Phase 1 Programme. Expenditure incurred directly by Irish Water is a matter for that organisation and I have asked them to liaise directly with the Deputy.

The Exchequer proposes a direct equity investment of €240m towards the capital funding of Irish Water in 2014. This will support projects to be included in Irish Water’s Capital Investment Plan and will ensure that the entity is in a position to take on the water services investment programmes of the 34 water services authorities, including some 80 projects currently in progress. Irish Water will also finance some of its costs and the liabilities transferred from local authorities through borrowings in 2014.

The establishment of Irish Water and its financial relationship with the local government sector will have a considerable impact on local authority financing from 2014. Work is also underway on the funding model for Irish Water’s operational costs, to ensure that it can fund the Service Level Agreements being put in place with local authorities for the delivery of water services in 2014. Irish Water is working with local authorities to finalise the 2014 budgets associated with the proposed service level agreements. In parallel with this process, the Department has sought the advice of the Commission for Energy Regulation in relation to anticipated new operational costs associated with new functions for the entity which are likely to arise in 2014. The outcome of these processes will determine the overall funding requirement of Irish Water in 2014 from the Exchequer, borrowing and charges.