Mattie McGrath (Tipperary, Independent)
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258. To ask the Minister for Housing, Planning, and Local Government if he will provide information on Irish Water’s request to the Commission for Regulation of Utilities to allow Irish Water to use the funding previously allocated for pre-planning works on the Eastern and Midlands Water Supply Project to be used in the current day-to-day budget; the reason for this request; the level of funding being sought for this purpose; the full current deficit in Irish Water's budget; the way in which Irish Water will fund the ongoing pre-planning works on the Eastern and Midlands Water supply project if the budget is being used elsewhere and if all correspondence between Irish Water and the Commission for Regulation of Utilities in relation to this request will be made available to Dáil Éireann; and if he will make a statement on the matter. [45414/22]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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Since 1 January 2014, Irish Water has statutory responsibility for all aspects of water services planning, delivery and operation at national, regional and local levels, including the Water Supply Project – Eastern and Midlands. Irish Water takes a strategic, nationwide approach to asset planning and investment, and meeting customer requirements. The prioritisation and progression of individual projects is a matter for determination by Irish Water.

Under Part 5 of the Water Services (No.2) Act 2013, the Commission for Regulation of Utilities (CRU) is the economic regulator of Irish Water. The CRU protects the water consumer by ensuring, among other things, that water services are provided by Irish Water in an economic and efficient manner.

The CRU is responsible for setting the total level of revenue which Irish Water can receive, through Government subvention and from non-domestic customers, to cover its costs. To determine that these costs are efficiently-incurred, the CRU reviews Irish Water’s investment plans and sets allowed amounts for its operational and capital costs. The cost of providing domestic water services (other than excess usage) is met through Exchequer funding through the annual budgetary and estimates process, having regard to the regulatory process undertaken by the CRU.

In July 2022, the CRU published a consultation paper: Irish Water Revenue Control 3 – Interim Review (CRU202267) in which the CRU outlined the drivers of inflation and their impact on both the operation of Irish Water and its capital investment program. To address this, Irish Water has proposed that some of the Revenue Control 3 (RC3) 2020 - 2024 ring fenced funds for both the Water Supply Project – East and Midlands and the Greater Dublin Drainage projects could be used more broadly across the portfolio to absorb the impact of inflationary pressure.

The CRU consultation paper sought feedback on the release of funds and sought a submission from Irish Water regarding the balance of ring fenced funds not consumed by inflationary adjustments, and how these could be used to deliver incremental benefits to water and wastewater consumers. This information has been provided by Irish Water and the CRU is now actively considering its response as part of a final decision paper, which will be published on www.cru.ie. In this paper the CRU will set out the total amount to be release as well as any incremental outputs and outcomes that it expects Irish Water to meet by the end or RC3. Additionally, any decision paper will provide information on how the CRU intends monitoring any additional investment and ensuring that Irish Water delivers value for money.

The Water Supply Project – Eastern and Midlands is at the Preliminary Business Case (PBC) Stage of the Public Spending Code, which aims to develop further the strategic case for the project, consider in more detail the range of options available and decide whether there is a case for proceeding with the proposal. The PBC incorporates detailed options appraisal and when finalised will also incorporate assessments of risk along with the proposed approach to implementation of the proposal.

In addition to their role as economic regulator of Irish Water, the CRU will carry out an external assurance process of the Water Supply Project – Eastern and Midlands Region PBC and issue guidance to my Department.

Under the Public Spending Code major projects such as the Water Supply Project – Eastern and Midlands Region must have their PBC approved by Government in order to proceed. I understand that Irish Water intend to seek Government approval for the PBC following the completion of the CRU external assurance process in late 2023/early 2024.

The future funding of the Water Supply Project – Eastern and Midlands will be included in the Irish Water Capital Investment Plan 2025 – 2029 that will be submitted to the CRU as part of Revenue Control 4 (RC4) 2025 – 2025, which in turn will be subject to the Irish Water funding model (Exchequer subvention - Domestic customer and Non-Domestic tariffs).

Irish Water has established a dedicated team to deal with representations and queries from public representatives. The team can be contacted via email to oireachtasmembers@water.ie or by telephone on a dedicated number, 0818 578 578.