Lucinda Creighton (Dublin South East, Independent)
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111. To ask the Minister for Environment, Community and Local Government when the full cost of the domestic water metering programme of €539 million, excluding VAT, will be paid out by whichever party is responsible for payment; if any of the €240 million direct equity investment by the Exchequer in 2014 into Irish Water will be used to repay the liability of the bridging loan facility given by the National Pensions Reserve Fund to Irish Water in 2013; if any of the €240 million direct equity investment in 2014 by the Exchequer will be used for the cost of the domestic water metering programme; if the €240 million in direct equity investment by the Exchequer into Irish Water in 2014 is in addition to the €296 million Exchequer payment for the water services investment programme in 2014 as detailed in the Infrastructure and Capital Investment Programme 2012-2016; and if he will make a statement on the matter. [48600/13]

Lucinda Creighton (Dublin South East, Independent)
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113. To ask the Minister for Environment, Community and Local Government further to Parliamentary Question No. 355 of 22 October 2013, if he will provide in tabular form the exact amount of funding Irish Water will be raising for 2014 and 2015, broken down by each revenue stream, including Ireland Strategic Investment Fund, EIB, bank lending, capital markets facilities, State support; if he will provide the total amount of revenue that Irish Water will have on its balance sheet at the time of transfer of water services functions to Irish Water from 1 January 2014; if he will provide the total amount of that revenue which has been generated from direct Exchequer funding; and if he will make a statement on the matter. [48610/13]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I propose to take Questions Nos. 111 and 113 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. Further proposed legislation will 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.

Following the passage of this comprehensive 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.

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. There has been no expenditure to date from the Exchequer other than a commitment of funding from my Department, 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.

Bord Gáis has put in place appropriate programme management arrangements to establish Irish Water, 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 is a matter for Bord 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 Bórd Gáis/Irish Water balance sheet at the end of the year will reflect the expenditure programme and funding from the National Pensions Reserve Fund.

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.