Water Services Bill 2013 [Seanad]: Second Stage (Resumed)

We will now resume the debate on the Water Services Bill 2013. Deputy Clare Daly has ten minutes remaining.

Obviously, the whole thing is a bit farcical at this stage. I do not know why the Government and the Whips have not adjourned this business and allowed us to discuss the key issue of the day. However, we will now attend to these matters which are, in many ways, as important and will also have long-standing implications but which are clearly being overshadowed by the other events of the moment.

Clearly, the key plank of this legislation is to allow the Government to introduce domestic water meters. No doubt it will be surrounded by publicity and spin, that this will be a great step forward in terms of water conservation in Ireland. That, however, is a complete and utter joke. The Minister of State has already said that the Government intends to begin a programme of introducing water meters later this year. In the context of the legislation on the property tax, the Government is envisaging a scenario whereby, having pushed through that draconian legislation which enables Revenue to put its hands into the pockets of workers, social welfare recipients and pensioners to take that property tax from them, at around the same time, Irish Water will be visiting houses and housing estates to install water meters. What a recipe for an absolute and utter social explosion of resistance. It is patently obvious that it will be resisted the length and breadth of the country because ordinary people are not stupid. They know full well that a domestic water meter does not conserve water. All of the research and studies show that when water meters are introduced, initially, but temporarily, they may succeed in reducing water consumption by around 10%. All of the analyses, by Engineers Ireland and others, refers to that figure. The best case scenario is a 10% reduction in domestic water consumption.

All of us agree that there are very few people in this State who go out to work in the morning and leave their taps running because they could not care less. That does not mean that all of us could not do more to conserve water, however. Of course we could, but simple measures of education would be sufficient to deal with that. Our children are much better at conserving water than we are. They have been educated to turn the tap off when brushing their teeth and so forth. Education measures can assist and they work with our young people. We can all do better in this regard but we do not need a charge or a measure to do that - a simple education programme would do the job. The key reason for the excess use of water in domestic properties is the way in which those properties were designed. The lack of dual-flush toilets in older properties, for example, means that Irish toilets consume vastly greater quantities of water than toilets in other European countries. The lack of rainwater harvesting and the use of grey water facilities and so on are also an issue. If such measures were implemented, they could reduce domestic water consumption by around 50%. If the Department was really serious about reducing domestic water consumption, a programme to introduce such conservation measures, by way of a grant scheme, would be far more effective than any meter on a property.

Domestic consumption only accounts for a small percentage of the overall treated water consumption in this State. We must go back to the big-picture issue of unaccounted-for water and leaks. Let us look at the figures in that regard. The figures for unaccounted-for water across the local authorities in 2008 was 43.44%, in 2009, it was 44.5% and in 2010, the figure was 42.3%. It is an absolute and utter crime that treated water is going back into the ground. The figures for all of the major urban areas in 2010 are shocking - in Cork city, the leakage rate was 55%, in Dublin city, 46.36%, Dún Laoghaire-Rathdown, 28%, South Dublin was top of the range at just over 20%, Fingal, 30%, Galway city, 48%, Waterford, 47%, Limerick, 57% and Donegal and Kerry, 53% and 59% respectively. If we want to conserve water and save money, that is where the investment has to go. The Government has made a major propaganda argument about the jobs that will be created by the water meter installation programme but far more jobs would be created if the Government put crews to work, fixing the leaks in the water mains. I am not just talking off the top of my head in this regard. The studies and works done by local authorities over the years prove that this is the case. They also prove that such work can have a far greater impact on the amount of water saved than the introduction of water meters because domestic water consumption accounts for only 16% of the overall water supply. If the Government introduces measures which conserve only 10% of the domestic water supply, the real reduction in consumption is only about 1% in terms of the overall supply. In contrast, if the Government introduced measures to fix the water mains, which could reduce water loss in places like Dublin city from around 41% down to 30% or even 20%, as in South Dublin, then the real saving would be about 20% in terms of the overall water supply. That is where we should go. The studies show the fallacy of introducing domestic water meters.

With the agreement of the House, I will share my time with Deputy Anthony Lawlor.

Can I be the first Government backbencher to welcome the announcement by the Taoiseach and Minister for Finance and commend them for their great work in the last couple of years to get a deal on the promissory notes? This is a great step for the country.

I am pleased to speak on this important topic. Few things in this world are as important as the constant availability of clean water. Of all the technological innovations of the 20th century, the introduction of a clean water supply into family homes and businesses was, perhaps, the most significant. Such is our understanding of the importance of clean water for health, sanitation, food production and a number of other uses, that charitable organisations exist with the single purpose of securing clean water supplies in less developed nations.

In Ireland today, we take the availability of clean water for granted. We forget the process collected water goes through before it reaches our homes, safe for human consumption. On rare occasions, however, an event suddenly brings to mind how precious the supply is and how easily it can be disrupted. Being from Galway, I recall the cryptosporidium crisis of 2007 which shut down large parts of the water supply network in the city and county from St. Patrick's Day until Galway race week at the end of July, and people in Galway were advised not to drink tap water. That had a very negative effect on householders and on the wider economy, with many businesses suffering. Tourism is, of course, an important part of the economy of Galway.

Cryptosporidium was chiefly caused by lack of investment in the water and waste water network. Government failed the people, at local and central level. We can trace the chronic lack of investment, with the corresponding waste through leakage of treated water, to the failure of the national Government to introduce a stable funding source for local government following the removal of domestic rates in the 1970s.

Thankfully, the cryptosporidium crisis has been consigned to the past and the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, working with the Minister of State with responsibility for NewERA, Deputy Fergus O'Dowd, has, in a short period of time, undertaken a major investment programme in Galway. An upgraded Terryland water treatment plant has ensured a quality supply of water for Galway city and its environs and a new reservoir at Tonabrocky which serves the city and its environs is under construction and well advanced. The city's Mutton Island treatment plant has been developed over a number of years and there has been a €20 million investment in water and waste water projects in Connemara.

To fund this, a new model is required, and part of the funding is coming from the European Investment Bank which works for member states and recognises that, whatever the economic climate, investment in the water supply network is crucial. The Bill, however, goes further to ensure a new continual stream of investment in our water services. It creates Uisce Éireann, or Irish Water, a new subsidiary of Bord Gáis that will co-ordinate the delivery of water services. Rather than having dozens of different authorities doing different things in different ways, we will have one clear point of responsibility for the provision of our water supply nationwide.

The country has suffered over a number of years from under-investment in water. When I joined the local authority in 2004, my fellow councillors and I received a list of the projects included in the water service investment programme. It detailed every town and village in the county and gave the year when works were to take place. A year later, we would find that very little had been done, another list would be drawn up, and so on. The previous Government did much work and investment and this has been continued under the Minister, Deputy Hogan.

Deputy Clare Daly mentioned leaks. We have a history of leaks across the country. In the city and county of Galway, however, great strides have been made to combat the problem of leaks. We have seen investment by the Minister in leak detection. In Galway city, for example, there is a district metering programme which divides the city into districts so the local authority can better know where leaks are occurring and deal with them.

I welcome the Bill and the fact that it will provide for clearer investment opportunities in water and wastewater services in the future.

I might not get the opportunity next week so I welcome the deal that has been done by the Government, particularly the hard work done by the Taoiseach and the Minister for Finance. I have just heard some of the nitty-gritty and it will be an exceptionally good deal over a long period of time and I congratulate the Government on the extremely hard work it has put into this.

I welcome the Minister of State and thank him for listening to our remarks on this Bill. I spoke about this as a local authority member for some time. When I was on Kildare County Council, there were problems in Naas as a result of the well that fed the town being contaminated. There was an outbreak of serious illness in the town, but thankfully since then Naas has linked into the main treatment plant at Osberstown and the quality of the water has improved dramatically.

People are nervous about how much they will be charged. I have no problem, however, charging people for water because we invest €1.2 billion in water infrastructure. From a Government expenditure point of view, that is not sustainable. It is for that reason that I welcome the introduction of water charges. To encourage people to be more frugal in their use of water, a nominal amount should be available free and after that they should be charged for it. This investment will mean we have sustainable water supplies in future.

While the investment is being made, a lot of money will be spent locally. I want to see local businesses being given the opportunity to contract for these jobs that will be available. There is a problem at present that companies must have a turnover of €2 million, which is beyond many small businesses. I hope the Minister of State might consider reducing that figure to encourage small businesses in the community, which is our objective. A turnover of €2 million is an extraordinary amount to ask for.

I encourage people to use water more frugally. Once they do that, expenses on a day to day basis will fall. The Government should consider giving a grant for water harvesting. There are many schemes to promote it. In most households, only 30% of the water that is used needs to be treated. If we reduce the amount of water being used in a house by 70% and replace some of it with rainwater or water that has been harvested, significant savings can be made. There should be a grant scheme for people to put in place water harvesting facilities so they can tap into the rainwater supply.

The Deputy has one minute remaining.

The Acting Chairman has stopped me in my train of thought.

I apologise. Knowing the Deputy, he will regain the train.

The Acting Chairman stopped the leak. Deputy Lawlor was gushing.

My minute is nearly gone now.

The flow is back on. We will exercise discretion.

If such a grant scheme could be considered, it would be of great benefit to Uisce Éireann because it would not have to produce as much water.

I welcome the Bill. I have always said people will act more responsibly when they must pay for something. I hope there will be a fair consumption allowance for various households and that we look after those who are more vulnerable than others. People will respect the fact that once they must pay for something, they use less of it. That has been proven in other jurisdictions where water charges are in place.

I welcome the opportunity to contribute to this debate on Second Stage of this important Bill.

The establishment of Irish Water as a subsidiary company of Bord Gáis will allow it to take over responsibility for the delivery of water services from local authorities and will facilitate the installation and maintenance of water meters in dwellings across this country. It is one of a number of major structural changes to the water sector in Ireland that are proposed in this legislation.

Many rural Deputies will be well aware that paying for water is nothing new in rural areas, where people not connected to town or city supply lines are obliged to pay through a meter for their domestic water through a local group or private scheme. I acknowledge the community spirit of the many group water scheme secretaries and other office holders in these group schemes for their work in keeping together these schemes and for working with their respective local authorities to ensure their neighbours have a supply and that the necessary paperwork and infrastructural renewals are updated.

There is some local concern among private and group water schemes regarding the full roll out of Irish Water. These concerns centre on the taking in charge of the schemes by Irish Water and the implications for the users. The IFA recently welcomed the announcement that rural dwellers on these schemes will not be hit by any additional water charges. Mr. Harold Kingston, chairman of the IFA environment and rural affairs committee, stated that the IFA recognises the importance of a good quality water supply for the future competitiveness and growth of the agrifood sector and welcomed the Minister for the Environment, Community and Local Government's recognition of the substantial investment by people living in the countryside and the decision not to impose additional charges.

There is another view that some of these same group schemes will become customers of Irish Water rather than the local authority and there are concerns that charges for water and connection will increase. Up to 10% of domestic water users are either on a private or group water scheme and I would welcome from the Minister in his contribution to this debate as much clarification as possible around the future of group water schemes to clear up any misunderstandings.

As a member of Sligo County Council for many years, I know the cost of producing clean water for onward supply to the consumer. In Ireland, it costs over €715 million a year to provide water in our taps. The only return comes from commercial users such as farmers, industrial businesses and small commercial users. A hotel in my constituency faces annual charges for water in and water out of over €30,000, a massive figure for a relatively small business that only opens on a seasonal basis. This has to change and I fundamentally challenge the view that water should be free to domestic users. I see no lobby group calling for commercial consumers not to pay for water, yet those same people argue against domestic water charges. What if there was a call to charge electricity to commercial users and not to domestic consumers? It would be laughed at, and rightly so, but I argue that at a cost to the Exchequer of over €700 million for water, the user must pay.

We are the only country in the OECD where households do not pay directly for the water they use. Our current model of water provision, where unlimited quantities of an expensive product are provided at no charge, is not sustainable. The decision to give every household a domestic allowance based on the size of the household is only fair and this will encourage consumers to treat water as a commodity like electricity to ensure any usage is not excessive.

I understand Deputy Dooley wishes to share with Deputy McGuinness. They have ten minutes each.

That is my wish, with the permission of the House. I thank the Acting Chairman.

I welcome the opportunity to contribute to this important debate. It is widely accepted that across the political divide there is a recognition that clean water is a scarce resource, it is an expensive resource to produce, and it is right that there is an appropriate legislative framework in which the water resource is managed. There are and will be greater challenges as the population grows and as the need for water, particularly in areas around the east coast, especially the Dublin conurbation, is addressed. Dublin City Council has pursued various activities to ensure the future secure supply of clean water and there has been much debate in that regard. Dr. John Tierney, who was recently appointed head of this new water body and whom I wish well, is somebody who has had a view on how the east coast in particular should be provided for, but I disagree fundamentally with him. I disagree fundamentally with Dublin City Council on its desire to extract water from the River Shannon, particularly from Lough Derg, and it is something about which I have considerable concern.

Unfortunately, the Bill is a reflection of the slipshod way the Government has sought to deal with really important issues. I would appear that it has learned nothing from the fiasco of the household charge. It seems the Government is rushing, if the House will pardon the pun, to plug the leak in the public finances. It sees a soft opportunity to levy a water charge - it is another tax - rather than putting in place an appropriate methodology to charge for that water resource. I do not want to be overly political, but it appears that they are making it up as they go along. The Government started out from the initial position that it wants to raise additional revenues, and my party accepts that.

It is what Fianna Fáil signed up for with the troika-----

I will give the Minister of State, Deputy O'Dowd, an opportunity.

-----and that is the starting point.

I accept that.

That is the point. Fianna Fáil signed up to it.

I understand what is in the memorandum of understanding-----

I am glad Deputy Dooley acknowledges that his party is responsible for this.

-----on charging for water and the importance the Government attaches to that in terms of control of usage, conservation measures and resources that need not come from the central Exchequer that will provide the Government with the capital investment to upgrade the pipe network and all that goes with it. There is no issue in that regard. The Government, however, sees its only role here as getting its hands into people's pockets and taking the money in another way without having thought out what it is ultimately trying to achieve, which is to put in place a national infrastructure for the provision of water.

The service is disjointed but it is working reasonably well. There have been problems in Galway, Ennis and other parts of the country, and the existing system worked to an extent, perhaps belatedly. Various contamination issues were addressed effectively with capital investment, but this also was done on a reactionary basis rather than with a properly planned, solution-driven approach to putting in place an appropriate network of water delivery. It seems the Government is following the age old way of doing it in an iterative way with the central aim - which is what Government and local authorities are often accused of - of merely grabbing the money without having the appropriate infrastructure in place.

The Minister has taken shortcuts. There was no appropriate tendering process to decide the company that would run this. Bord Gáis is a fine company and its chairman is a wonderful person, but I am somewhat concerned that Irish Water is now a constituent part of Bord Gáis. The Minister of State, Deputy O'Dowd, will be aware, through wearing his NewERA hat, that elements of Bord Gáis are due to be privatised. Was that the reason Irish Water was slotted in to Bord Gáis? Is that a resource the Government hopes to sell on at a later stage? I am concerned about that. That is a concern that exists in other jurisdictions. As the Minister of State will be aware, there are some very large companies that see water as a resource and that its provision can be a profit generator.

I have not seen any comprehensive analysis on the cost of metering. Some studies show that metering is helpful in the short term regarding conservation. I agree with metering but I am not so sure that the analysis stands up to support metering long term. It does for a while. It restricts the usage and it encourages conservation behaviour, but some studies I have seen seem to suggest that over a relatively short period of time consumers go back to their old behaviour. That is something I would like to see thrashed out and I am not so sure it has fed in to this legislation.

No doubt the piped network is antiquated in some parts of the country. The area that I know best has some very old piping and a significant amount of water is being lost. The Minister of State, Deputy O'Dowd, knew before he came into this House, through his experience at local authorities, the cost of treating that water and that so much of it is lost to the ground on an annual basis. When water leaks are identified at surface level, they are repaired quickly but, sadly, much of the water is lost into the ground and never comes to the surface and, therefore, it is never seen and is not identified. That is a considerable drain on resources and we must look much more carefully at that aspect.

There is some uncertainty about the employees who currently work with local authorities.

There is another Bill coming.

I accept that, but the Minister of State is asking for our support or otherwise for the process. The big question for the domestic consumer today is how much it will cost.

In another era it would not have been such an issue. As many people did with building in better times, they laid the foundation and never knew how much it would cost by the time the roof was on. It is the other way now with the additional charges and with the change in economic circumstances, and people are hard pressed. While we are talking about the introduction of water charges, people are rightly worried. I have a broad acceptance of charges for water versus property taxes and household charges. People see they are getting something in return here and they understand the concept of the cost associated with the delivery of that service. They understand it is a scarce, limited and expensive resource to produce and can understand paying for it, but they would like to know how much. Obviously the metering will give them the capacity to decide themselves. At the earliest opportunity the Minister of State will need to provide at least a charging policy so that people can have some concept.

Separately, the regulator will have all of that in place and there will be total transparency and accountability to the Dáil as to what is happening.

I do not doubt the Minister of State's integrity in that regard, but it would have been helpful to have provided that information so that people would have an estimate of the cost and whatever free allocation they might get.

There are thousands of apartments in Dublin city and I understand it will not be possible to meter those units individually, which gives rise to an equality issue. People will feel that those living in apartments can use all they want and just pay a flat fee. While I am not having a go, there are many bits and pieces that should have been at least outlined more comprehensively before the Minister of State decided to bring the legislation to the House. While I know the Minister is under constraints and that there is pressure to reach targets defined in the memorandum of understanding, I would have thought that the Department of the Environment, Community and Local Government in consultation with the Minister of State and his officials would have been able to present a more comprehensive set of measures that met with the expectations and the desire for information, considering the challenges that will be faced by the public at large in this regard.

Yesterday, we debated a Bill that provided for the creation of another quango. I made some points on how that Bill might be changed. Today, we face the same question about another quango. The Bill makes reference to a board of directors and all that goes with it, which will be very costly. I see it every Thursday at the Committee of Public Accounts. I gave the example yesterday of the energy, communication and aviation regulators all getting approximately €180,000 per year. Some of their staff are getting in excess of €100,000 a year. They are meant to regulate the industry and have consideration for the taxpayer, the end user, the customer. In this case I wonder how much of their costs - I am sure all of their costs - will be considered when striking the rate for a cubic metre of water. However, that matter is not clarified in the Bill. The Bill before us yesterday, as with this one, lacked any great detail. The experience at committees of this House is that when we discuss these matters with the regulator the last person to be considered is the end user of the service - in this case water - and the payer for the service of the regulator and all the costs involved. That is the first person in terms of paying for the increases. We need to focus on the other side of the balance sheet. We need to minimise the costs of the commercial or bureaucratic structure before we ask the consumer for an increase or more money, in this case, for water. However, that does not happen. The history of charges and regulators indicates that the customer ultimately pays a substantial amount of money.

The Bill makes no reference to the amount of water that will be given free to a household. That should be specified because once responsibility is handed to a company, it is only interested in profitability. For an example of that, we need look no further than the local authorities which charged businesses €3 per cubic metre for water in and water out. Speakers on the Government side have highlighted the various SMEs who have to pay a staggering amount of money in water charges simply because they are asked to pay for the total cost. With the exception of the Comptroller and Auditor General, nobody considered that this was all treated water at a very significant cost to the State being put through an infrastructure that was so badly damaged it was delivering very poor value for money for the State. However, as long businesses, including SMEs, were paying, nobody minded the infrastructure. Even though it was highlighted by the Comptroller and Auditor General, it still was not changed. Unless these details are specified in the Bill, there will be no controls and we will be back in committees of the House arguing on behalf of the consumer that they are getting short-changed given the services and costs involved.

Section 15(1) on accounts and auditing makes no reference to the Committee of Public Accounts or to a right of that committee to investigate costs or the accounts. It makes reference to other committees and states that the subsidiary is also required to keep "special accounts as the Minister [for the Environment, Community and Local Government] may, with the consent of the Minister for Communications, Energy and Natural Resources and the Minister for Public Expenditure and Reform, from time to time direct." That is three different Ministers commenting on the accounts but no real accountability. It does not require it to submit its audit to the Comptroller and Auditor General and be taken up by the Committee of Public Accounts. That facility and arrangement need to be clearly specified in the legislation. It must be unequivocal with no ifs and buts so that we can audit every cent of taxpayers' money used in the administration of this utility company. In local government in excess of €4 billion goes through that system with no accountability to the Comptroller and Auditor General, which is unacceptable. Every Bill presented to this House should address the accountability issue appropriately and beyond any doubt.