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Dáil Éireann debate -
Thursday, 7 Feb 2013

Vol. 791 No. 3

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

Question again proposed: "That the Bill be now read a Second Time."

I apologise for my absence yesterday and thank Deputy Niall Collins for taking the first ten minutes and thank other speakers for allowing that to be the case.

This is an interim Bill with three main objectives: to establish Uisce Éireann, or Irish Water, as a subsidiary of Bord Gáis Éireann; to confer power on to that board and on to Irish Water to install water meters in all domestic properties; and to provide that the Commission for Energy Regulation can advise Government on regulatory procedures and act as a regulator for water services and functions.

We will oppose this Bill, not necessarily because Fianna Fáil is against water charges but because of the manner in which Irish Water is being established and configured. There are not sufficient safeguards within the parameters by which it has been set up to stave off what we believe is a real and live threat of privatisation at a later date. I am conscious of the fact that we have many group schemes, private and public, and that many of them by their nature and location would not be considered profitable in the event of a buyer arriving in years to come who would be interested in vast multiple connections and population centres. We fear that without sufficient safeguards in the ownership of the company, that remains a threat where we could not guarantee the future for all areas. It is for that reason we feel there must be further strengthening of the configuration of the company to convince Fianna Fáil and others that the threat is not likely to be realised.

We do not oppose the installation of water meters but the Government should first, before the publication of the Bill, honour the commitments it made when it announced the policy process more than a year ago. There was to be a full audit of the existing networks that was to be made available to the House. That audit would allow us to address the myth that the water service is not fit for purpose. If, as many on the Government side have said, we do not have an efficient water service, why should people be asked to pay for an inefficient service? It is only when that service is fit for purpose and we can stand over it, with the necessary safeguards in place, conservation at its heart and a pristine service, that the Government will be in a position to charge.

Full costings were to be made available that would give us the exact figures not only for the reinstatement repairs necessary to bring the entire network up to the necessary standard, but that would put at our disposal a definitive cost analysis for water metering for the State and the National Pensions Reserve Fund, and ultimately for the user. There would need to be a proposal based on those costs that would state categorically how users would pay for putting that in place.

When the policy direction was initially announced, there was great confusion in both Fine Gael and in the Labour Party as to how it would be configured. We are no wiser today than we were then. It is against that sort of background that I cannot commend the Bill to the House. We are in the dark about the progress that has been made and what progress is likely. It is difficult enough for us to finalise our own policy in this area. How, then, can we acquiesce to the Government's request at this stage on the establishment of Irish Water and giving it the authority to commence metering? Nor can we support the idea in the Bill of the regulator being put in place.

Those are the broad questions we have but there are many other individual questions related to them. When this was announced last year, we were told installation would commence in 2012 and be rolled out on an accelerated basis. That idea has been canned. The Government now tells us there will be a three year roll-out. Previously the Government said 2,000 jobs would be created per annum in the roll-out. Can the Government commit to 6,000 jobs?

We were told there would be 150 to 200 local installation contracts. My sources tell me the tender process was very restrictive. I understand the Government tried to address that by compiling a list of local plumbers from which contractors had to pick. I have a problem with that because the Government still has not made any progress on the subcontractors Bill. How long has that been outstanding given the commitment that was made and the work that was done by the previous Government to put that in place? Why has there been such a delay? Can the Government commit to that legislation being in place before this Bill commences?

The tendering process is over and the applications are being considered. We were told no indicative figure could be given while the tendering process was under way.

That process is complete in the main in the sense that the applications were submitted, the closing date has passed and the Department is in the process of that competition and awarding contracts. The Minister of State is now in a position to give us a better indication of the costs. Rather than rushing this, why can the Minister of State not give us those costs in order that we can make a calculated response to it?

It has also been acknowledged that 300,000 homes cannot be metered. That being the case, there is nothing in the Bill that tells me the model to devise a mechanism for a flat payment or charge that will be paid in that regard. I understand it has been acknowledged that there is no cost benefit in making individual connections within apartment blocks. Can the Minister of State confirm that is the case? Can he let the House know how he is to devise a flat charge or what model he has used on which to base such a flat charge?

The figures that come from the Department on the existing household connections countrywide, whereby 1,093,000 are connected to the public mains, 265,000 are connected to group schemes which, in turn, are connected to public supplies, 46,000 to private water schemes, 145,000 to other sources which we expect to be wells, and 2,906 have no connection, which I presume are ghost estates, amounts to approximately 1.7 million households. The latest census tells us there are 1.9 million households. The Minister of State has also factored in the 300,000 apartments. There is a gap in the figures and I ask him to comment on that also.

It was also stated that the Department would consult the regulator before the introduction of water charges. The Minister of State is now bringing forward a Bill that gives authority to an existing regulator to have that authority within this remit. How long will this consultation take place given that the Minister promised to have it done by now? Obviously, the Minister did not have the regulator in place and he could not do that either. How long will the consultation take place between the Department and the regulator to give an indication to the House thereafter of what the costs might be?

Will there be an additional charge for those who have a connection to a public water supply and also have a connection to a public sewer? Will there be less of a charge for somebody who has a connection to a public water supply and has a septic tank? There is no mention in the Bill of the discrepancies that can arise in that area.

The Department was also to consult with the regulator on free allowances before the introduction of water charges. If there has been no regulator, there has been no consultation and we are no further on in that regard either.

An interim Bill at this stage, if one was to follow the methodology of which the Minister spoke last year, should only contain the framework to put a regulator in place in order for meaningful negotiation and consultation to take place thereafter before the Minister could come with a proposal on metering with the benefit of the associated figures, analysis and costs. It would make much more sense at that stage.

Many would argue that the high level of expectation contained in the rules and regulations and maintenance directives from the EU are not necessarily being met by many of the group water schemes, especially those who have their own private source and not necessarily those that have a relationship with local authorities for their services, despite the fine quality and excellent service that such schemes provide to those they serve. It could be argued that if they were to follow the existing expectations, they might not necessarily be able to afford to do so. Is it that the Minister will be forced to take over those two to meet the criteria that his regulator will put in place to meet the demands of the EU directives or will there be an amnesty? There is also more shooting in the dark in this area.

The OECD stated in 2010 that water metering is unequivocally the fairest way to charge for domestic water usage, and I acknowledge that. There is a recognition by the Department that metering will reduce usage by 10% and that this saving is two to three times the level of savings applicable if the same was invested in areas such as mains upgrade. I do not question the 10% saving that is projected for metering correlated to usage but I question the logic behind saying that such a saving, in itself, is two to three times better value than the same investment in areas such as mains reinstatement, rectification and repairs. What methodology and statistical analysis is behind that statement? I thought we all had acknowledged that the biggest cost deficit in existing maintenance is the amount of leakage, and that does not tie in with the statement that there would be more value in the savings metering will deliver than there would be in those delivered by the reinstatements.

The framework directive demands water to be charged at a price that fully reflects the cost of providing that service. It is my party's contention that we cannot take this to mean that this omits Government subvention altogether. Fine Gael's partners in government had stated in this regard that an overhaul of the tax system would seek to get full cost recovery within the water framework and water pricing. Initially, the Government stated that Irish Water would be self-financing by 2018. With the various delays that have already taken place and with the absence of costings, projections and data, where now sits that prediction? If Irish Water has the power to borrow, as it states, would these borrowings be outside the central government balance and has this been confirmed by EUROSTAT?

In the report by Government to the IMF published at the end of last year, the Government stated that it was not yet clear what level of charges would impact on low-income households. That is obviously the case. The Department does not have the data available to it to give an estimate, even at this stage, of the overall charge. That charge, in itself, is related to the overall cost of upgrading the system, of metering, etc.

Looking at the figures, based on some statements that have been made by Government Members and figures, and the Department and others over the past number of years, it is important for me and for Members on this side of the House to inform the public of what is coming down the tracks here. If the Government will not let us know, even though it wants to set up Irish Water, to meter and to put a regulator in place, if it has not adhered to the roadmap it put in place, and it has not provided any definitive figures related to that process, then the public is in the dark as to what it faces.

As the Opposition, we cannot give the Government carte blanche authority to proceed in the absence of all those data.

In an effort to try to get at what has been kept so secretive, we must look at the existing and projected running costs of water services, which the Department of Finance indicates as €700 million. A universal figure has been thrown out without the specifics to verify it indicating that the upgrade of the system would cost approximately €500 million. There is also a major problem in Dublin. Bord na Móna, in devising a plan that the chair of Irish Water has said he is prepared to analyse, investigate and hopefully run with, has put a cost of €500 million on that. We are now at more than €1 billion. The estimates bandied about for metering have been anything from €300 million to €500 million. If we seek to capitalise those figures over 20 years, metering would come to €20 million per annum, fixing the problems in Dublin would be €25 million per annum and the upgrade would be another €25 million per annum. This gives a cost of €770 million that has to be paid for either by 1.9 million households or 1.7 million households - I need clarification on that. If it is capitalised over 20 years it would give a water charge of €450 or €400. There has been no mention of free allowance. How could there be when the Government's commitment was that the Minister of State and his Department would consult with the regulator on the free allowance before any decision was made or indication given on charges? That is a contention I have sought to extrapolate from figures that have been bandied about.

As I said at the outset, we are not against water charges. Sinn Féin is completely opposed to them and the Government is completely in favour. We would be to the right of Sinn Féin and to the left of the Government. That is the position to which we want to get. However, in the absence of the data, analysis and figures, we are in the dark. That is my problem with the Bill at this stage. If the Minister of State can answer my queries and present exact figures so that we can analyse how we will pay for it and can start being straight with the people, then we can play ball. The Government is trying to be cute on the issue because it is facing into local elections next year. If that is not the case, let us have it out here in the open. I have sought to analyse figures that have been in the public domain without being quantified that indicate every household will be faced with a water charge of at least €400 if not €450 per annum on the basis of capitalising costs over 20 years. The Minister of State should tell me if that is wrong and if it will be more or less. Where is the procedure providing for a free allowance? What provision is likely to be put in this Bill or another Bill to deal with less well-off people who cannot afford to pay?

What consideration is the Minister of State giving to group schemes and to private schemes with private connections or connected to public supplies? What efforts are being made to adhere to what is expected of them? Is their cost likely to be higher or lower? In the absence of those data, the Bill should not be passed. The Minister of State needs to go back to the drawing board and come back to us with the figures and analysis so that we can have a proper debate on how the State should pay for it and how this should be passed on to the people, including providing the less well-off and less fortunate with the same water they have received since the foundation of the State but at an affordable price that is equitable for everybody. Equalisation is at the root of this.

The Water Services Bill is fundamentally flawed and draconian in its content. It establishes Irish Water as a subsidiary of a company, Bord Gáis Éireann, which the Government has indicated it wants to sell off. The new company will be given the power to install meters and charge families. Crucially, the Bill repeals the prohibition on water charges. Denmark, with 5.5 million people, has a population similar to Ireland's. Denmark has water metering and in 2007 the average cost per household was €715. The Bill before the House does not take into account people on low incomes or even those living in poverty. Has the Bill been poverty-proofed? Some 706,000 people in the State live in poverty and their households will be charged the same amount as the Minister of State's, mine or the Taoiseach's - one of the highest earning politicians in the world. That is shameful and unjust. Developments, including that of a water system, which ignore the essential needs of poor people in this country or abroad, are simply not sustainable. However, the Minister of State does not need to take my word for it. According to a major report carried out by the British Chartered Institute of Environment and Health a household, spending more than 3% of its income on water, is at risk of poverty. The report entitled, Water Poverty in England in Wales, found that "UK households in the lowest three income deciles spend on average 3% of their net income on water bills whereas the average spend for all households is just 1%." The report also states, "large water bills in relation to income do have the potential for causing significant deprivation." However, despite the international evidence the Bill does not even attempt to protect those low-income families and those who would be seen as vulnerable.

The establishment of Irish Water along with the imposition of water charges is at best ill-though out. It transpires that it will not be possible to install water meters in one third of households and I believe a similar number in the rest of the country - certainly in towns such as Portlaoise, Tullamore and Portarlington. If water meters lead to water conservation as the Minister of State claims, the Government has a problem. Despite informing the Oireachtas Joint Committee on the Environment, Transport, Culture and the Gaeltacht that Irish Water would be ready to bill households in January 2014, John Mullins, the project CEO, was unable to inform the committee the full cost of the installation of meters. What way is it to proceed if at this point we cannot be informed on the cost of providing meters? We have not even been given an estimate. We are being asked to issue a blank cheque to a Bord Gáis Éireann subsidiary, which is lunacy in the current economic climate.

The Bill allows Irish Water to access information on households from sources including the Revenue, the Department of Social Protection, local authorities and the Private Residential Tenancy Board, which is a clear breach of people's privacy and civil liberties. It also gives powers to exempt Irish Water from the need to get planning permission when carrying out major infrastructural works. We need to see the Government-sponsored drive towards water metering in the context of overall Government policy. Sinn Féin condemns the wave of cuts in water investment planned from 2012 onwards as outlined in the Government's Capital Investment Programme 2012-2016. Capital investment in water has been cut from almost €435 million in 2011 to €331 million, a 25% cut.

It is a cut of approximately €200 million on the 2010 allocation with more cuts planned until the budget has been reduced to €266 million.

The budgets of consecutive Governments have brought extreme financial pressure to bear on families in this State. Water metering has an immediate and negative impact, particularly on the vulnerable sector. Taking into account poverty levels and income distribution, it is obvious water charges will impact on this group. Water charges must be considered within the broader context of the additional costs low income households will face in 2013. I am sure I do not need to explain that to the Minister of State. People are under serious pressure as a result of the cut in child benefit, the €100 household charge, the property tax, which it is estimated will be on average €495 per household, the increase in the carbon levy which will affect solid fuel to the tune of €5 per tonne, the reduction in the fuel allowance from 32 to 26 weeks, the 2% VAT increase, increased public transport fares, the increase in the drugs payment scheme thresholds, the increase in prescription charges and increases in school transport costs.

Water is a resource that everybody needs. Sinn Féin agrees on the need for better co-ordination across the island of Ireland in ensuring water is brought to where it is needed when it is needed and that homes and communities are protected against the adverse effects of flooding. In this State, there are 34 local authorities supplying water to almost 2 million households. There has been some debate on whether the actual number in this regard is 1.7 million or 1.9 million. Sinn Féin has opposed the introduction of water charges North and South and will continue to do so. We successfully campaigned against their introduction here in the 1980s and 1990s.

This Bill is fundamentally flawed and is based on false notions. On 24 January 2012, the Minister of State claimed that Ireland was the only country in the OECD where citizens did not pay directly for water. However, he failed to mention that people in the North, which is approximately an hour's drive from here and ten minutes from the Minister of State's home town, also do not pay water rates.

I have the figures. I ask the Minister of State to listen to what I have to say, as I did when he was speaking.

The Deputy should get his facts right.

I respected the Minister of State when speaking.

I will respect the Deputy but I expect the truth.

I ask the Minister of State to allow me to speak.

Despite the best attempt of the British Government to bully the Assembly into imposing water charges, the Sinn Féin Minister for Regional Development, Mr. Conor Murphy, MLA, ensured that no charges were introduced. I feel obliged to set the record straight on the Government's mischief-making and lies on the issue of rates, charges and stealth taxes. Its tactics have nothing to do with informing debate but are simply an attack on Sinn Féin in an effort to undermine its support. The Minister of State, who has been a Member of this House for a long time and understands how government works, knows that the Assembly has no fiscal powers and as such cannot increase or decrease taxes. Taxation is the preserve of Westminster. Sinn Féin wants fiscal independence from London. If Fine Gael or the Labour Party can do anything to assist us in this regard we would appreciate it.

People in the North pay rates based on the valuation of their homes, which funding is used to meet the cost of local and regional services, which is not dissimilar to the rates which previously existed in this jurisdiction but for reasons of political expediency were abolished in 1977 by Fianna Fáil. Crucially, those exempted from payment of rates in the North include people in receipt of the disabled person's allowance, people on low incomes, people in receipt of housing benefit, pensioners and zero and low carbon homes. This Government has made no provision for similar groups here. This will all happen at one remove from Government. If the Minister of State and I are still Members of this House in one or two year's time and I ask questions of him about water issues he will tell me they are a matter for Irish Water.

If it is helpful to do so.

The Government is outsourcing responsibility for water services. The Northern Ireland Research and Statistics Agency states that the average local rate charge in the North is €789.

What is the equivalent in euro?

The Minister of State can work that out. I have heard people on the Government side of the House say people in the North pay £1,400 per annum.

They pay €1,000.

All of their friends must live on the gold coast. That was said by Members of the Labour Party, which surprised me because I did not think the Stickies had much contact on the gold coast.

I do not know where it is.

I thought most of them-----

On the Falls Roads, they pay on average €1,000 per annum.

I find it necessary to on every occasion point the following out to the Minister of State, Deputy O'Dowd or the Minister, Deputy Hogan. Rates in the North cover provision of the following public services, education, including books, transport and school meals; emergency services, including fire services; health care, housing, local social services, roads, in respect of which there are no tolls; water and sewerage, waste collection-----

They include water charges.

-----desludging of septic tanks; arts events and recreation, building control, community centres, environmental health, leisure facilities, tourism and waste management. In this State, people pay separately for each of these services by way of tax on their incomes or by way of charges. I hope I have clarified the situation in this regard to the Minister of State and that he and his colleagues will refrain from spinning untruths. It is untruthful to say that rates in the North do not cover the services I have outlined.

The Minister of State is aware that the Northern Ireland Assembly-Executive comprises five-parties. The situation would be a lot of different if there was a single party government in the driving seat.

The Deputy has already said that there are charges in the North for sewerage services.

However, as the Minister of States knows, that is not the case. The British Government wanted to introduce water charges but was prevented by Sinn Féin from doing so.

According to what the Deputy said earlier, they are paying for water in the North.

The proposals in respect of the installation of water meters and imposition of water charges was dreamed up by Fianna Fáil and is now being kept alive by Fine Gael, supported by the Labour Party. Fianna Fáil's National Development Plan 2011-2012 states: "Part of the expenditure saving package will arise from the introduction of a scheme of metering and charges for domestic water. Overall, it is anticipated that these measures could lead to an annual saving of €500 million". Fianna Fáil is now opposed to the introduction of water charges.

This Bill sets in train a process that will see 1.3 million holes drilled outside people's homes and the installation of water meters with money from the National Pensions Reserve Fund. This means people will have to pay twice or, if the Government has its way, three times, for water, first through their incomes, second through the National Pensions Reserve Fund and third, through water rates.

The installation of meters will prove costly and inefficient and will result in 1.3 million holes in footpaths. Experts, including the local authority professional officers, estimate the cost in this regard will be €1.2 billion. Other estimates include one for €500 million. Meanwhile, private companies in Britain are attempting to complete installation of water meters 20 years after the process first commenced. Installation of water meters in Ireland was supposed to commence in 2012. I am not aware of any water meter having been installed. The Government also stated the process would be completed over two years.

It will commence in July this year.

That may be so. I can guarantee the Minister of State that the process will not be completed in two or even four years. This Bill is nothing more than a Trojan horse for privatisation of our water services in the future. The Minister of State claims that is not the Government's intention, which I accept is true at this point. However, he will know that intentions and circumstances can change as opportunities arise.

Sinn Féin has actively campaigned against charges in the past and will redouble its efforts to ensure they are consigned to the dustbin of history. The Government can expect stiff opposition from across the country to the introduction of water charges.

These include gated developments and apartment blocks, in addition to houses that already have pipes running through their backyards or old lead pipes running behind terraced houses and through gardens. How does the Minister intend to get around that issue and deal with it? It is a serious matter.

The current cost of providing water services is estimated by the Department to be €700 million.

We will stand with the people on this.
When the Bill was introduced in the Seanad two weeks ago, we were the only party to table amendments. We tabled 24 amendments ranging from outright rejection of certain sections to outlining our alternative solutions for improving the water quality system. It is worth noting that Fianna Fáil did not table amendments. Is there a meeting of minds between the three parties?
We fully understand the challenges that lie ahead for the water sector. The Government has used the crisis as an opportunity to promote a ripening agenda of charging people for something for which they already pay, as I have outlined. Our approach is different and is based on ensuring that water provision remains in public ownership and is paid for through fair and progressive taxation. Sinn Féin proposes investing money from the National Pensions Reserve Fund in creating real jobs with a positive legacy. The money that will be wasted on meters which will not save one drop of water should be invested in upgrading an aging and leaking water distribution network. The €500 million referred to in the Bill would fund water conservation for six years and it would be far more appropriate to invest €500 million in water conservation rather than in meter installation.
Sinn Féin supports the introduction of district metering as opposed to domestic water meters in every household. This is already in place in local authority areas. It is cheaper and very effective. It operates in County Laois and on my road in Clonroosk View. The engineers tell me it works very well in several parts of the county. It is of great assistance to local authorities in identifying leaks and it is cheap. We call on the Government to abandon its ill-fated domestic water metering scheme and instead expand district metering. This would be far more cost effective and would ensure water leakage is detected quickly and efficiently and is stopped.
At present, the water sector is managed by the 34 local authorities. The move to Irish Water will not improve accountability in government. Local authorities, however imperfect they may be, are accountable to their communities. There are able to meet local demand and can provide solutions when emergencies arise. The Minister of State's county supplied County Down with water because it has a single water authority at one remove from the government in the Assembly and we have seen the problems this caused. Whatever difficulties existed in Louth, the problems in Down and Armagh were worse.
Following the establishment of Irish Water debates like this one today simply will not happen. The water sector will no longer be accountable to the elected representatives and the public they serve. One will no longer go to one's local councillor, Deputy or Minister to register a complaint or raise a concern; one will have to call a call centre on an 1890 number. The State water distribution network is antiquated. A decade of underinvestment means in some local authority areas more than half the water is lost through leaks, but it is not lost in households. The water leaks from the water distribution network. The State water distribution network is antiquated and one county is heading for 60% leakage. With average leakage at a staggering 41%, we understand there is a need for increased capital funding in the State water infrastructure. The Department of the Environment, Community and Local Government must return to at least 2011 levels of investment.
The Minister's proposals are focused on the domestic householder and there is no mention of the debt owed by the commercial sector where only 52% of commercial water rates are collected. It appears households are been penalised for the lack of building regulations, leaking pipes in the network and poor governance. Local authorities and the Government must take action on the outstanding water rates owed by the commercial sector to the State.
The crisis facing water supply does not start or finish at the Border. Recognising that river basin management districts cover both sides of the Border, it is essential to have co-ordination of the water sector. We must develop an all-Ireland strategy for water provision. There is a requirement on the Northern Assembly and the Government to collaborate on the delivery of services where shared resources, joint capital investment in infrastructure and procurement would clearly prove beneficial on an all-Ireland basis.
Sinn Féin calls for the establishment of a national water sector framework team overseeing governance of the water sector and capital investment. This would work with local authorities and comprise city and county managers and be convened by the Secretary General of the Department of the Environment, Community and Local Government.
The establishment of Irish Water is a Trojan horse for the installation of water meters and the imposition of charges and lays the foundations for the full privatisation of the water sector, which would be very easily done when water has become a commodity. In the drive to establish Irish Water, the Government continues to promote myths about water meters and water charges. The first of these myths is that the public gets water for free. This is untrue as people already pay through taxes. Another myth is that all other citizens in the EU pay water charges. This is simply not true, and I mentioned the situation in the North despite the best efforts of the British Government. The Government would also have us believe that water metering reduces consumption. We raised this with the Minister of State previously. In England, where water metering has been in place for many years, consumption is at 158 litres per head per day. The Dublin water supply report of 2008 showed consumption of 148 litres per day. This was at a time of very bad leakage in the system, which has improved massively since. All of the evidence points towards metering being simply a bad idea and being enforced by a Government hell-bent on making ordinary families pay for the current economic disasters in which we find ourselves. This is on top of the family home tax and many other charges. We have spoken many times about people hanging on the edge. Many people are on the point of falling over the edge. This is a serious imposition on people.
The Bill should be rejected. Does the Minister of State agree that the Bill should be poverty proved? Does the Minister of State agree the money allocated for meters would be better used to upgrade the leaking and crumbling system? The figure of €500 million has been mentioned but local authority professional staff reckon the amount will be €1.2 billion. Assuming the figure for meter installation is correct at €500 million, €500 million more will be required for upgrades and €500 million more on the Shannon-Dublin project. This amounts to €1.5 billion.
I have set out for the Minister of State why the €500 million being spent on meters will not save water. Would it not be better to invest it in the crumbling water network to stop leakage and conserve water? This significant issue needs to be addressed. I am not saying this to have a shot at the Minister of State, I say it sincerely. We firmly believe this and we are passionate about it.
What effort is being made by the Government and the Department to get local authorities to collect the 48% of commercial water rates which are outstanding? In our house we pay commercial water rates and gladly so because it is the system which exists. My point is we cannot have a situation where almost half of the charges are not paid. It is lunacy. There is something seriously wrong. I understand businesses go out of business and changeovers occur and that businesses, particularly small businesses, are going through a very difficult time in every town, village and city, but 48% not being collected amounts to a huge amount of money. This is a major issue for us. Will the Minister of State address this issue with regard to the €500 million it is proposed will be spent on installing meters? I gave the water consumption figures for England where meters are in place and the figures for Dublin in 2008 before the leaks were fixed. Slightly less water was being used by people in Dublin.
In Dublin, Portlaoise, Mountmellick, Portarlington and Tullamore one third of households will be hard to reach.

It is €1.2 billion.

That is the total but the operational cost is €700 million. Irish Water will not provide it for €700 million. I am not holding up County Laois as a model, but the local authority there has been very efficient in providing water services. It has obtained money from the Department and has used some of its own development levies. It has invested steadily in water services over the past ten or 12 years. I would ask the Minister of State to do one exercise and get his officials to pull out the file to examine it. If one examines the total annual budget, one can see that those water services are being provided at a very reasonable cost. Water quality has improved, although there can of course be further improvements. Given those figures, there is no way that the new entity will provide those services as efficiently. Nor will it be able to protect ground water to the same extent as the county council can when working with the local community. Irish Water will not have the expertise that council engineers, workers and water-keepers currently have. That is a fact.

An uncontrollable Frankenstein monster is being created, which is ideologically driven. Will Irish Water be subject to information requests under the Freedom of Information Act?

I will check that matter.

We do not know that, yet we are going ahead with it.

No. There is a second Bill coming in which will deal with all of those issues.

I understand that this is an interim Bill. The Minister of State and I will be obliged to ring 1890 numbers to talk to somebody in a call centre about major problems. We must go beyond this to the reality of what we are doing here. The Department is losing control of this situation and in a year's time the game will have changed because responsibility for water supplies will have been outsourced. The best we can hope for is that somebody from Irish Water-Uisce Éireann will be invited once every year or two to talk to the Committee on the Environment, Culture and the Gaeltacht where we will get a few minutes each to ask questions.

I am asking the Minister of State to reconsider this proposal, which should be rejected. It should be replaced by a proper plan to work in a co-ordinated way under a national framework team in conjunction with local authorities.

I now call Deputy Pringle who, I understand, is sharing time with Deputy Clare Daly. Is that agreed? Agreed.

I am glad of the opportunity to contribute to this debate but I do not welcome the Bill. The legislation provides for the establishment of Irish Water as a subsidiary of Bord Gáis.


We cannot hear, Acting Chairman.

Can we have some order for the speaker, please?

Thank you. While I must admit that the idea of setting up a single utility company to manage water services across the country does have some merit, I worked in water services myself in the real world before being elected to the House and I have seen some of the problems that have arisen. They were created through the mismanagement of such services. Within the 34 local authorities, there is currently a surfeit of management of water services. In many counties there is not enough scale involved, particularly when one looks at smaller counties where services are duplicated. From that viewpoint, there is some merit in having a single utility but the Bill's motivation is not to provide for an improved service. Its motivation is to privatise water services. I will return to that point later.

If we do establish a single utility there are risks involved. We will lose local knowledge in terms of how staff can respond to emergencies. We will lose the local workforce and the ability to react quickly. This was shown starkly a few years ago during the severe winters. In County Donegal, staff were out every day dealing with issues and resolving problems right away.

Across the Border in the Six Counties, as Deputy Stanley mentioned, water services collapsed because a decision was taken to establish a single entity to look after them. They took away the local knowledge and workforce and centralised the service. It turned out in the North that they could not respond to emergency situations when a crisis occurred. I fear that under the aegis of Irish Water that level of response will be taken away from local services. The management will be too distant from what is happening locally.

The Bill also provides for the introduction of domestic water charges. The costs involved have already been mentioned in the House. I must agree that the Government is underestimating the cost, which will be significantly more. Over the last six or seven years, Donegal County Council has rolled out a non-domestic water metering programme. The council borrowed €9.7 million to install 11,000 meters across the county. On a pro rata basis, it means that the cost to the State could be anything up to €1.7 billion for the roll-out of water metering across the country. That money will be raised by a loan through Irish Water and whether it is from the National Pensions Reserve Fund or elsewhere, it will have to be repaid. In County Donegal, commercial water charges are repaid through a standing charge. Every metered property has a standing charge and the entire amount goes back in loan repayments.

Will there be a standing charge on domestic properties here to pay for installing water meters? If so, not only will the Government be charging for water, it will also force consumers to pay for installing meters on their property.

Water charging is the real goal of this Bill. I never cease to be amazed to hear Deputies saying that one cannot get something for free, and that we cannot continue to pay nothing for a service that costs a lot to deliver. That is the kind of mantra being put out by those in favour of water charges, but it is utter rubbish. We do pay for water in this country. People who tax their cars have been paying for water since 1997. We also pay through general taxation, so everybody who contributes tax to the State pays for water.

When Irish Water is established and metering is put in place, we will still be taxing our cars and paying taxes to the Exchequer. We will also be paying for water at an estimated cost of €370 per household. That is the figure that has been quoted so far. The Fine Gael election manifesto promised that no water charges would be introduced until every property in the country was metered. We can see where that promise has gone. We now see that a fixed standing charge will be introduced while the water metering programme is being rolled out.

Following evidence to the Committee on the Environment, Community and Local Government, we heard that at best only 15% of water meters will be installed in 2013. For many years to come, therefore, people will be paying fixed charges for water services, which Fine Gael has said should not be paid for until a fair metering process can be put in place and people can thus be charged on the basis of water consumption.

The Government continues with the mantra that if one pays for something, one will respect it, that the dearer something is, the less one will use and that people will respect water and use less of it because of the price. However, the consumption of water does not respond to price. One may get an initial kick when water charging is introduced and some drop in consumption but the consumption of water does not respond to price. It is deemed to be price inelastic in economic terms, which means that if one increases the price, consumption is not affected. The figures in this regard are quite low and there is very little reduction in consumption on foot of a price increase.

The motivation for this measure is completely flawed. It appears to be to set up a utility, a billing system and a management system nationwide, thereby setting it up for privatisation. Over the past 20 years of privatisation, massive profit-taking has taken place within the English water companies. In one instance, according to figures I have seen, the water utility in Devon and Cornwall made a profit of more than £100 million in a year. I believe this to be the ultimate goal this Bill hopes to achieve in Ireland.

As for water charging, in his summing up the Minister of State might explain whether VAT will be charged on the water that will be provided to consumers and whether the charge per year of €370 will be inclusive or exclusive of VAT.

I must tell Deputy Pringle that just one minute remains to him. I understand he is sharing with Deputy Clare Daly.

That time went very quickly.

Could I have silence for the speaker please?

The whole thing is a disgrace.

Deputy Pringle may continue.

I believe the objective is to privatise water and water charging. Such privatisation is outlined by PricewaterhouseCoopers in its report to the Government on how to establish Irish Water and I believe it is worth reading this into the record.

Deputy Pringle, to clarify, you have six minutes left. I apologise but I was looking at the wrong clock.

I thank the Leas-Cheann Comhairle. I did not think the time had gone so quickly. PricewaterhouseCoopers suggests:

... once Irish Water is well established as a self-funding utility, the Government and Regulators may wish to assess international experience of the introduction of competition in water and sewerage services to identify whether Ireland could benefit from competitive markets in the water sector at a later date. With this in mind, [PricewaterhouseCoopers] recommend[s] that, when undertaking the detailed design of the new organisational structure for Irish Water, the possibility of future retail competition should be taken into account.

This is clearly evident in this Bill, which provides that the Commission for Energy Regulation will set the prices and the tariff for water. This is giving that remove away from the control of the prices. Moreover, one should recall how the Commission for Energy Regulation has worked in the past. On its establishment in 1990, Ireland had the second cheapest electricity in Europe. Over the years, it has increased the price of electricity and approximately 67% of the overall increase therein is directly attributable to the Commission for Energy Regulation bumping up the price to make it more attractive for competition to come into this market. Is this what will happen in the future in respect of the pricing of water? Will the Commission for Energy Regulation bump up this price to entice water companies into this country to pitch for our utility?

On the legislation itself, I note section 5(4) provides for the distribution of shares in Water Ireland. It provides that one share shall be given to Bord Gáis and the remaining two shares should go to the Ministers for the Environment, Community and Local Government and Finance. While the Bill provides that Bord Gáis cannot sell its share without the approval of the Minister for Finance, what about the other two shares? There is no mention of how they might be disposed of and no restriction is placed on their disposal. The Government already has decided to sell off Bord Gáis and the retail network. In the future Members will see that the Government will decide to sell off Water Ireland as well, as part of the break-up of Bord Gáis and the removal of our public utility.

The European Union rules are very clear in this regard. If one pays for a service or commodity, it must be opened up for competition. Consequently, the Minister of State should come clean to the House, through this Bill, as to what are the Government's future intentions. If the intention is to retain Water Ireland in public ownership, that should be included specifically in the Bill and provisions made to ensure it cannot be removed from public ownership.

Please, could I ask for silence for the speaker?

Other European Union countries have protected their water industry and in Belgium, for example, private companies were used to develop the water services and treatment plants but within a number of years, they were taken back into public control and have been preserved for the people. This is the very least one should expect from the Government. This Bill should protect this vital natural resource and should not set it up for privatisation. It should make sure that the control of this natural resource is protected and vested in the Irish people. As I do not think this Bill will achieve that, I will oppose it.

I now call Deputy Clare Daly who has 15 minutes.

I thank the Leas-Cheann Comhairle. I will be brief because the procedures in the Chamber today are an absolute joke. To me, this is indicative of this House descending into chaos. Deputy Pringle and I have more or less been treated like a schoolboy band which can reluctantly entertain the crowd before the main act comes on.


The Deputy can sit down if she wishes.

However, this issue is far too important for this-----


-----and after disgracefully embarrassing themselves last night-----

The Deputy would know a lot about that.

-----the fact Government Members are willing to do this again today is absolutely reprehensible.

The subject being debated on the floor of this Chamber at present is the future of Ireland's water supply infrastructure, which will leave a lasting legacy for the citizens of this country and it is extremely important. It is regrettable that it is being overshadowed by the other events, because future citizens also will pay for this decision. As Deputy Pringle and others have stated, this is evidence of the furtherance of the neoliberal agenda being under way. It is the first step towards the setting up of Irish Water. The appointment of John Tierney to an executive post has already taken place. I know John Tierney from Fingal County Council and while he is a very nice man, he has no expertise whatsoever in respect of water. Moreover, even before this Bill came before the House, a recruitment drive has been under way.

Deputies, please. There should be respect for the speaker.

The conversation is taking place on the other side of the Chamber.

I already asked for such respect for the previous speaker. Deputy Clare Daly has the floor.

They will not respect the speaker because they do not have any respect.

A new recruitment drive already is under way, in which staff in the local authorities are being invited to avail of jobs in a secondment process to Irish Water. A total of 80 positions are on offer at present, covering 15 different categories and grades of work. These jobs are being advertised for engineers at various levels and qualifications below those at which such people would work in the local authorities. People are being recruited for a junior engineering position but are being asked to undertake work that would be done by someone at a higher grade in the local authority. A process of downgrading jobs and so on already is under way and certainly, were I a union official in the local authorities, I would be advising staff to boycott that process.

The entire premise on which Irish Water was established was based on the so-called independent report from PricewaterhouseCoopers. However, as has been articulated in this House many times previously, that report was not independent but was seriously flawed in that the conclusions reached on the reason Irish Water was needed were based on a false analysis of Scottish Water. Incorrect information was submitted with regard to the scale of the water pipe infrastructure in Scotland and incorrect figures also were given for the workforce inside Scottish Water. Although these points have been challenged previously in this House, the Minister simply shrugged his shoulders and basically ignored the figures.

In the aforementioned report, which led to the foundation of Irish Water or the Government's decision to set it up as a so-called independent entity, one was told the reason it was necessary to do this was there is a demand from investors for clean water supplies. There is absolutely no basis to the argument that any investor has ever shunned Ireland because of a lack of clean water. Moreover, one was told that climate change is leading to a threat in Ireland's water supplies.

Water that is unaccounted for and a lack of rainwater harvesting in public buildings is more of a threat to our water supply than the fact that we have not yet established Irish Water. The population projections given are more suited to the Celtic tiger years than the reality of population growth in the coming period. The establishment of Irish Water is not necessary to achieve compliance with the EU water framework and the work could be done based on the expertise that already exists within local authorities. I will not repeat the points made by Deputy Pringle.

This legislation will allow the Government to introduce water meters under a con and environmental cover, with the idea that it will eventually lead to water conservation. This is completely and utterly false. Perhaps I will finish up now and we can revisit the debate at another time.

The Deputy's colleagues around her have been speaking among themselves all through her speech.

Members on the Government benches have been chatting for the past ten minutes.

There should be order. I ask the Deputy to adjourn the debate to allow an announcement from the Taoiseach. There is ten minutes remaining in the slot.

We may as well continue the farce.

Debate adjourned.