Establishment of Irish Water – including Costs

Irish Water

Our water supplies are one of the most important national resources we have, important for jobs and for families.
While Ireland has,severe underinvestment, abundance of water, the cost of providing treated drinking water and the collection and treatment of our wastewater is expensive. It costs about €1.2 billion per year to run the current system, with most of this funding coming from State sources.

Even at this cost to the taxpayer the water network has suffered from severe underinvestment by previous Governments who wanted an easy political life over providing for the future needs of Irish households and businesses , one could be forgiven for being cynical  that many of those now shouting the loudest were most responsible for the debacle our citizens now find themselves trying to survive. As a result of that gross neglect for many years we are now playing catch up at a severe cost.
IndeedThe most recent example was in Dublin last October and November where households and businesses suffered water restrictions because of a capacity issue at one treatment plant. We can no longer tolerate a fragmented water network operated by 34 different local authorities.
The creation of a national water utility company has many benefits. Most importantly, this new approach will facilitate the doubling of capital investment into the system, resulting in better quality water services and more jobs.
Not only do enhanced water services benefit individual householders, but they attract industries with high water usage.
With global demand for water due to rise by 40% in just 20 years, Ireland will be well positioned to attract foreign and indigenous investment, creating real potential for new jobs.
We are the last country in the EU and the OECD to charge domestic consumers for water.

Consultants’ Fees
The establishment of Irish Water as a new utility company is a huge undertaking. The new utility company will be responsible for the country’s water treatment plants, the national water pipe network, the installation of water meters nationwide, a billing system that accurately charges households and a complex IT system to manage all the above.
The Government decided to establish Irish Water within the Bord Gais Group in order to minimise establishment costs as much as possible. If the Government had followed some initial suggestions to establish the company from scratch it would have involved a lot more cost – in the region of an extra €80 million on top of what has already been spent.
Bord Gais put in place a plan to establish Irish Water, to prepare for the transfer of assets and functions from local authorities from 1 January 2014, provide for customer service and billing and implement the domestic water metering programme.
To the greatest degree possible, systems are being developed from existing Bord Gais systems and this is providing for lesser cost of establishment than would otherwise arise. No one wants to spend more than is absolutely necessary in the setting up of such a vital entity. Every penny rightly must be scrutinised and accounted for. Businesses, households and  this country deserves a high quality resource. It is vital for health and the economy.
·         The Minister for Environment has sought advice from the Commission for Energy Regulation on the reasonableness of the establishment costs of Irish Water and whether these costs offer value/long term benefit to the water customer. The initial /preliminary view of the regulator is that the majority of the establishment costs can be considered reasonable.  An in-depth review of costs by the CER, will be undertaken during the course of 2014 in advance of the setting of water charges.

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