Kevin Humphreys (Dublin South East, Labour)
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154. To ask the Minister for Environment, Community and Local Government further to Parliamentary Question No. 707 of 5 November 2013, if he will outline in detail the expenditure by Irish Water in 2013, and the projected expenditure in 2014, broken down by administration, salaries, capital expenditure and the water metering programme; and if he will make a statement on the matter. [3382/14]

Kevin Humphreys (Dublin South East, Labour)
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155. To ask the Minister for Environment, Community and Local Government further to Parliamentary Question No. 708 of 5 November 2013, if he will outline in detail if he or any officials in his Department signed 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. [3383/14]

Kevin Humphreys (Dublin South East, Labour)
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156. To ask the Minister for Environment, Community and Local Government further to Parliamentary Question No. 709 of 5 November 2013, if he will outline in detail the funding model for Irish Water in 2013 and 2014; the sources of revenue thus far; and if he will make a statement on the matter. [3384/14]

Kevin Humphreys (Dublin South East, Labour)
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157. To ask the Minister for Environment, Community and Local Government further to Parliamentary Question No. 710 of 5 November 2013, if he will outline in detail the amount that has been spent by Irish Water on consultancy services in 2013 and the projected amount for 2014; if he will indicate the companies or persons involved and provide a breakdown of each contract; and if he will make a statement on the matter. [3385/14]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I propose to take Questions Nos. 154 to 157, inclusive, together.

The establishment of Irish Water in 2013 was an integral component of the Government’s water sector reform strategy and involves major organisational change, an entirely new funding structure governed by economic regulation, the introduction of domestic water charges based on usage and the roll-out of a national domestic metering programme. The role of my Department is to drive the overall water sector reform process which includes developing the policy and legislation and ensuring delivery of the implementation strategy which was published in December 2012.

Bord Gáis Éireann (BGE) had responsibility for most of the deliverables under the Government water sector reform implementation strategy. BGE developed a detailed programme initiation document within the framework of this strategy, which outlined all of the tasks required to establish a fully functioning integrated public water utility and provided this to my Department in August 2012. They also provided an associated budget to my Department which outlined the costs involved in each area of activity, totalling €150m, plus €30m contingency, and reflecting both the use of BGE and external resources. The budget reflected the range of tasks to be undertaken from financial, governance, regulatory business capability, systems, brand management and customer engagement perspectives.

In addition, Irish Water has progressed the domestic water metering programme, the full cost of which is €539m excluding VAT.

All costs incurred by Irish Water in 2013 were financed by a loan from the National Pensions Reserve Fund (NPRF), with the exception of a grant of €0.57m for a pilot metering study funded by the Department. No other Exchequer funds or voted Department expenditure has been provided to Irish Water in 2013. My consent was given with the consent of the Ministers for Finance, Public Expenditure and Reform, and Communications, Energy and Natural Resources, for Irish Water to enter into the loan arrangement with the NPRF. My Department is awaiting a report on the actual drawdown of the loan during 2013. Reports to date indicate that almost €100m was spent in 2013 on establishment costs and some €35m has been spent on the initial stages of the metering programme.

The company also indicated that to date, as part of the establishment of the company, some €50m has been spent on external service providers. The procurement by Irish Water of external resources was a matter for the company and I had no role in approving individual contracts. However, the company indicated to the Joint Oireachtas Committee on the Environment, Culture and the Gaeltacht last week that the following major companies were used by the Irish Water Programme to help deliver the required systems and processes in the establishment of Irish Water - IBM, Accenture, Ernst & Young and KPMG. Further details of the contracts relating to the establishment of Irish Water are set out in the submission made by the company to the Joint Oireachtas Committee and this submission has been published on the company’s website at

As the establishment costs were to be included in the overall funding model for Irish Water, they would also be examined by the Commission for Energy Regulation as an integral element of the independent economic regulation of Irish Water. Against this background, and in advance of the establishment of Irish Water, my Department provided confirmation to BGE that spending being properly incurred on the water services activities would be recoverable in the event that the project was not proceeded with or, subject to meeting certain conditions, be recoverable as part of the funding model to be reviewed by the Commission. This initial commitment was provided by my Department in December 2012 and updated on a number of occasions in advance of the incorporation of Irish Water and the consent to the NPRF lending. The consent for Irish Water to enter into the loan arrangement with the NPRF was provided in July 2013, with an understanding of the overall estimated budget involved. It is also the Department’s expectation that establishment costs and metering costs will be included in the regulatory asset base for Irish Water.

The Water Services Act 2013 requires Irish Water to submit separate accounts to me not later than six months from the end of the financial year with a view to the laying of such accounts before each House of the Oireachtas. In 2014, Irish Water, which now has statutory responsibility for water services, will receive €240m in equity from the Minister for Finance and almost €490m from the Local Government Fund but no other funding from the Department’s Vote. It is anticipated that Irish Water will finance other costs from borrowing and this will be the subject of appropriate Ministerial consents in due course. My Department has requested a detailed cash flow projection in this regard for 2014 from Irish Water, which would include projected annual establishment and metering costs. We are also awaiting updated budget information on operational costs. Irish Water has agreed operational budgets with local authorities for the component of costs which they will meet during 2014.

Irish Water is currently preparing a Capital Investment Plan for 2014 – 2016 that will provide for the transition of projects previously included in my Department’s 2010 - 2013 Water Services Investment Programme. On the basis of the proposed State equity provision and borrowing, this programme is likely to give rise to spending of some €310m in 2014.