Issues

The new water authority

water-iStock_000006539564Large Bord Gáis has been chosen to operate Irish Water, but details outlining its future governance and operations are yet to be released, prompting opposition TDs to call for more clarity.

The proposal to operate Irish Water was won in April by Bord Gáis. It is expected that, in practice, it will call on the expertise garnered from both arms of its business (Bord Gáis Energy and Bord Gáis Networks) in running the body.

The creation of a water authority was agreed in the EU-IMF memorandum of understanding. The trokia stipulated that a final implementation programme outlining the legal, governance, organisational, human resources, financial, operations and regulatory issues would be released by the end of April, but it has not yet been published. A spokeswoman from Bord Gáis told eolas that a process of consultation between Bord Gáis, the Department of Environment, Community and Local Government and other stakeholders “is expected to continue for a number of weeks before an initial implementation plan is finalised and announced.”

An initial transition strategy envisaged that an interim board would be in place this year, Irish Water would be established under its own statute by mid-2013 and that it would acquire statutory responsibility for water services in mid-2013.

The water authority will be an independent state-owned subsidiary of Bord Gáis. The Government is selling Bord Gáis Energy but insists this will not affect Bord Gáis’ running of Irish Water.

Irish Water will take over the water investment maintenance programmes of the 34 existing local authorities. Those staff are expected to work in the new entity until at least 2017. That will involve negotiations with their trade unions, the department has said.

Irish Water will be statutorily responsible for providing drinking water, waste water and sludge disposal, planning and water resource management, sourcing private finance for investment in capital projects, rolling-out the water metering programme, customer billing and water conservation.

When fully operational, it will have the capacity to raise funds on financial markets for capital investment in the same way as other semi-states such as the ESB and Bord Gáis. Other funding will come from domestic and non-domestic water charges, as well as funding from central government.

Phil Hogan has said that the installation of water meters in one million homes will be 90 to 95 per cent finalised by 2014 and houses will begin to receive bills at that stage. Households that don’t have meters by then, and approximately 300,000 apartment blocks, will be billed using an assessment of their water usage.

Hogan refuted newspaper reports that householders would face an upfront charge of €300 for the installation of meters, but confirmed that a loan of

€450 million would be given to Irish Water from the National Pension Reserve Fund, which would be passed on to customers through a standing charge over 20 years. The ESRI’s Edgar Morgenroth has estimated that the cost per household could be between €473 and €560 per year.

The Minister and the department have refused to clarify the costs, stating that the regulator (the Commission for Energy Regulation) will be responsible.

Fianna Fáil’s Environment Spokesman Niall Collins has criticised the Government saying that “out-dated numbers, uncertainty for current employees, a rushed decision making process, by-passing the Oireachtas and confusion in the Cabinet over the costs involved all point to another government disaster.” Collins speculated that the Government is preparing the ground for future privatisation of the water sector.

The department has denied this saying: “There is absolutely no intention to privatise water services. The investment in this sector is key to our strategic interests and legislation will restate the existing prohibition on the privatisation of water assets.”

Sinn Féin’s Environment Spokesman Brian Stanley has criticised the Government’s lack of clarity on how much Irish Water will cost and what charges will be involved. He called for conservation through investment in the water sector, reducing the leaks and “introducing water harvesting and dual flush systems as part of building regulations.” Dual flush systems became mandatory in new buildings under the 2008 Building Regulations.

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