Joint Committee on Housing, Local Government and Heritage debate -
Tuesday, 13 Jun 2023

Infrastructure Provision and Residential Developments: Discussion

An Cathaoirleach

I welcome the representatives of the Construction Industry Federation, the Irish Home Builders Association, ESB Networks and Uisce Éireann. The committee wishes to discuss the relationship between the provision of utilities and development. We are doing a lot of work around land activation measures and, obviously, we want to see more housing being built, so I thank the witnesses for being here today to discuss any issues that might arise on those matters.

From the Construction Industry Federation, CIF, we are joined by Mr. Hubert Fitzpatrick, director general designate; and Mr. Conor O'Connell, director of housing and planning services at the CIF and also director of the Irish Home Builders Association, IHBA, who was here with us recently on the land value sharing Bill. From the IHBA we are joined by Mr. Michael Kelleher, chairman. From ESB Networks we are joined by Mr. Nicholas Tarrant, managing director; and Mr. Alan Rossiter, manager, customer and projects delivery south. From Uisce Éireann we are joined by Mr. Niall Gleeson, chief executive officer; Ms Yvonne Harris, housing programme director; and Ms Maria O'Dwyer, head of asset management. You are all very welcome.

I will read a short note on privilege. I remind members of the constitutional requirement that they must be physically present within the confines of the place where the Parliament has chosen to sit, namely, Leinster House, to participate in public meetings. Witnesses attending in the committee room are protected by absolute privilege in respect of their contributions to today's meeting. This means they have an absolute defence against any defamation action for anything they say at the meeting. We do not have any witnesses attending remotely. Members and witnesses are expected not to abuse the privilege they enjoy. It is my duty as Chair to ensure this privilege is not abused. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction. Members and witnesses are reminded of the long-standing parliamentary practice to the effect they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I invite the representatives of the CIF, ESB Networks and Uisce Éireann to make their opening statements, in that order. The format is that members will have eight-minute slots to ask questions and to get the answers back within those eight minutes. I call Mr. Fitzpatrick on behalf of the CIF.

Mr. Hubert Fitzpatrick

Thank you. On behalf of the CIF and its constituent association, the IHBA, I thank the committee for the opportunity to meet with it to address the critical issue of infrastructural provision and residential developments. The CIF is the representative body for the entire construction industry, house builders and contractors, including specialist contractors, and the IHBA is its sectoral association representing its housebuilder members. My colleagues in attendance here today - Michael Kelleher, IHBA chairman, and Conor O'Connell, CIF director of housing and planning services and IHBA director - are well equipped to address the concerns that arise in relation to the provision of utility infrastructure and the impact this has on new residential developments.

A priority for the IHBA is to deliver more homes for more people so the industry can offer people the security of their own home. The past number of years have been particularly difficult for those aspiring to a new home due to the lack of supply and affordability. To deliver more homes means that more zoned land, more infrastructure, more planning permissions and, of course, a viable and affordable product that can be funded are needed. These are the determinants of supply to a growing country with a large demand for new homes of all types and tenures.

The provision of infrastructure on zoned residential lands is a critical component of housing delivery. Over the last number of years, housing output has increased from under 10,000 units per annum in 2016 to nearly 30,000 units in 2022. This was an increase in output of 45% between 2021 and 2022. There are many different reports on how many houses are needed for 2023, from 33,500 in Housing for All up to 62,000 in a much-publicised Housing Commission report. Whatever the case, the number of houses that we need to supply is much greater than what we are currently building.

In recent years, this housing output took place on lands that were zoned in previous development plans and, in many instances, had been serviced with critical infrastructure such as water, wastewater, electricity, roads, public transport, and so on. In our experience, in more recent times a significant amount of the serviced and zoned lands for residential development have now been activated or built on, and we are now entering a much more difficult phase of housing provision. This has not been helped by a very tight zoning regulatory process introduced as part of the national planning framework. In many locations, there is a lack of forward planning for infrastructure or a delayed provision that is essential to the delivery of new homes. The capital budget allocated in the national development plan, NDP, needs to be invested in key projects as soon as possible to ensure that the housing targets aspired to in Housing for All can be met.

I ask my colleague, Conor O'Connell, to address some of the critical issues.

Mr. Conor O'Connell

Lands zoned for housing purposes are based on population projections from 2011 to 2016, one of the lowest population growth periods in recent Irish history. The headroom allowance has been narrowed to 25% when it should be 100%. Household formation size is not reflective of European norms of 2.3 persons per household and is currently at 2.7 persons in Ireland. There is an unrealistic target of 50% of the residential provision on brownfield lands or existing built environments in our main urban centres. Site viability and ownership can be key issues and State support will be needed for apartment construction. There is an unrealistically low projected growth target for Dublin and the mid-east in particular, and an unrealistic timeframe for development plans of six years.

Unfortunately, local and county development plans have now adopted and built in these unrealistic aspirations towards land management and there are many examples of settlement caps or even the de-zoning of residential lands previously zoned for housing purposes. In many locations, lands have been zoned for housing which are difficult and expensive to service and, in other locations, serviced or easily serviced lands have been de-zoned or not zoned. Our land management process for housing delivery is, therefore, fundamentally flawed and almost applies a “just in time” process for delivery rather than a predictive model based on realistic timeframes for the delivery of infrastructure to facilitate housing.

It is for this reason that house builders warmly welcome the review of the national planning framework and the change from a six-year to a ten-year timeframe for development plans in the planning and development Bill. We must stress that the business model for builders is based on delivering housing by the most efficient and sustainable means possible. Land is simply a builder’s raw material but one of the most important. Given the timeframes for the delivery of infrastructure and planning on lands, it is simply not possible for a country to adopt a model of “just in time” delivery for the zoning and servicing of residential lands. It must be a predictive and flexible model, based on future needs, which recognises the timeframes involved in the planning and construction of enabling infrastructure.

Of course, we cannot discuss the provision of public infrastructure without discussing the cost of infrastructure and who pays for infrastructure. In Ireland, we do not have, for example, water charges or a significant local property tax whereby the whole of society pays for public infrastructure that benefits everyone. All too often, a significant part of the cost, if not the total cost, of providing public infrastructure rests with first-time buyers and those purchasing new homes. Our water connection charges and upgrades to water services networks, wastewater and electricity infrastructure are borne by those who can least afford it, new home buyers. It is not equitable that first-time buyers or other purchasers of new homes may have to shoulder a considerable amount of the cost of public infrastructure.

A classic example is the section 49 levies that are paid for the purchase of new homes along the Luas line. When a new home is purchased in certain locations, a levy is attached to the cost of providing a new home yet someone selling a second-hand home nearby who benefits from the Luas pays little or nothing in public development levies while benefiting significantly in the sales price of the second-hand home. A vast array of public infrastructure is paid for in this way. Another recent example is the decision by the Commission for Regulation of Utilities, CRU, that the cost of upgrades in a first mover disadvantage situation must be paid for by the first houses in a large residential tract of land.

In relation to the provision of infrastructure generally, our members report that the timeframes for connection decisions are too lengthy and cumbersome, the cost can be prohibitive to the orderly development of a site and, for many infrastructural projects, there is no ability for the house builder to build and provide the infrastructure themselves in a more cost-effective way due to regulatory or procedural issues. We must find a better way of paying for the timely construction of public infrastructure and it must be based on a predictive and flexible model planned well in advance, rather than the current demand-led approach.

If we plan for ten years, then we must provide the infrastructure for that period as well, and the infrastructure plans must marry with the development plans.

As of now, development levies account for a significant portion of the uplift percentage of land zoned for housing purposes and the State already captures a significant gain from zoning decisions. Levies and charges for public infrastructure upgrades cannot be borne by new homebuyers alone.

Mr. Nicholas Tarrant

I thank the committee for the invitation to today’s meeting. I am the managing director of ESB Networks. I am joined by Alan Rossiter, who is responsible for three of our six regions across Ireland and is heavily involved in delivery of housing connections as part of our wider programme of work. We welcome the opportunity to speak with members on electricity infrastructure, the key role that ESB Networks plays in the connection of housing and enabling the delivery of the Government’s Housing for All targets. I will briefly introduce ESB Networks and cover some summary points on our housing connections.

ESB Networks is part of ESB Group, a commercial semi-State company that is overseen by an independent regulator, namely, the Commission for the Regulation of Utilities, CRU, since 1999. We meet the needs of all 2.4 million Irish electricity customers. We do not generate or sell electricity. Our role is to design, build, own, operate and maintain the electricity distribution network and, as transmission asset owner, to design, build and maintain the onshore electricity transmission network. There is approximately 180,000 km of electricity network across Ireland.

Our capital expenditure in 2022 was €869 million across all our work programmes, including network connections. This is part of an overall €4.4 billion investment programme under our Price Review 5 regulatory contract set by the CRU in 2020 for the period 2021-25.

We have approximately 3,600 employees. This number is increasing because we have a growing programme of work to meet the needs of the country and all electricity customers. We recruited 209 people in 2022, 223 so far in 2023 and we have doubled our network technician apprenticeship intake to 96 per year. The delivery capability of our line and electrical contract partners is also growing in parallel and has grown 85% in the past 12 months.

We are committed to continuing to grow our delivery capability to enable any further increases in housing connections over the years ahead. Our previous record year for new domestic and business connections in total was 105,000 in 2006.

We also have a central role in the delivery the Climate Action Plan 2023 by connecting renewable generation, enabling the electrification of heat and transport and in other areas, such as electricity demand flexibility, enabling the home retrofit programme and installing smart meters across Ireland. We launched our networks for net zero strategy in January 2023, which aligns fully with the Climate Action Plan 2023 targets and sets out for future plans to help deliver net zero for Ireland.

In 2022, we completed more than 33,800 domestic connections in addition to more than 5,000 business connections. Further details are provided later in this submission. This was an increase of 36% compared with 2021. In the first five months of 2023, we completed more than 12,700 new domestic connections to the electricity network.

As a result of the Russian invasion of Ukraine, the global supply chain shortages presented a significant challenge to ESB Networks in 2022-23. ESB Networks worked closely with our supply chain partners to increase supplies and seek alternative sources to enable a strong housing connection delivery outturn for 2022. This continues to be a risk in 2023, based on both the war in Ukraine and the growth in electricity infrastructure investment worldwide.

The nature of housing connections has changed as more electrical capacity is required for new housing to cater for the increased demand from heat pumps and electrical vehicle charging. We increased our specification by 120% in 2019 to future-proof housing connections and, at the end of 2022, approximately 50,000 homes were connected based on this revised standard.

We engage with stakeholders and customers nationally to collaborate with them to deliver this programme of work. Further details on our stakeholder engagement can be found later in our submission. The provision of infrastructure and electricity network connections for housing has always been a key area for our business and will continue to be for the future.

Wider societal support for building of new electricity infrastructure will be critical for enabling the delivery of the targets in Climate Action Plan 2023 and the provision of electricity connections for housing.

This is the end of our introduction. I will hand back to the Cathaoirleach. I am happy to take any questions from the committee.

Mr. Niall Gleeson

I am CEO of Uisce Éireann and I am joined by my colleagues, Yvonne Harris, housing programme director, and Maria O’Dwyer, head of asset management. I thank members for the invitation to address them on the area of infrastructure provision and residential developments. Our opening statement is quite lengthy, so I might summarise it to some degree.

Uisce Éireann’s strategic funding plan and capital investment plan sets out our ambition for building, repair and upgrading of Uisce Éireann water treatment plants, wastewater treatment plants and water and sewage networks. We will invest €5.3 billion in water services from 2020 to 2024, with significant benefits for the economy and the environment. Last year, we invested €1 billion in capital expenditure, which was first time we went over the €1 billion mark.

We are committed to supporting the Government's Housing for All plan. In September 2021, Uisce Éireann established a cross-functional housing programme to ensure that we are supporting housing delivery in an efficient and timely manner. Since the programme's establishment, we have completed the publication of water and wastewater capacity registers on our website and established a self-lay in public roads programme as well as an experience-based contractor accreditation scheme.

In 2022, Uisce Éireann processed pre-connection inquiries associated with more than 116,000 units and issued connection offers associated with nearly 37,000 homes. We enabled 4,250 connections to the water services infrastructure associated with more than 25,000 homes and we see all of these numbers increasing in 2023.

Successful, timely delivery of water and wastewater infrastructure and services for housing by Uisce Éireann has a critical dependence on the effective operation of the planning system. A well-functioning end-to-end planning system is the backbone of social and economic development.

Uisce Éireann urgently calls for, first, the prioritisation of key enabling strategic infrastructure that will facilitate other development, including the delivery of housing. This would be a form of a triage system when entering the planning system. Second, Uisce Éireann calls for it to be given appropriate powers to complete its functions, particularly when it comes to compulsory purchase orders, taking in charge and exempted developments. These powers currently rest with the local authority under the draft planning and development Bill. Third, Uisce Éireann is required to apply for a number of different licenses as part of the planning process. At present, these license consent processes do not happen concurrently and must often be obtained sequentially, resulting in delays, creating additional potential for a judicial review challenge and putting public funds at risk.

Sustained investment in water and wastewater infrastructure is critical if we are to ensure that Ireland has a sustainable drinking water supply and a fit for purpose wastewater treatment system to support housing growth now and into the future. We are supporting strategic infrastructure projects nationwide, for example, the recently completed Cork lower harbour project, the recently launched Arklow wastewater treatment plant and the Athlone main drainage project.

Yet, there are a number of critical national infrastructure projects that must be delivered urgently if we are continue building homes and catering for growth across Ireland. One is the water supply project - eastern and midlands region. It is essential to meet the domestic and commercial needs of more than 40% of Ireland's population up to 2050 and beyond. Currently a single source, namely, the River Liffey, supplies 85% of the water requirements for 1.7 million people in the greater Dublin area. This overdependence on one source combined with limited supply availability means, quite simply, we lack the capacity for growth and resilience to provide the level of service we should all expect from our water supplies in a modern European economy.

Another project, namely, the greater Dublin drainage project, involves the development of a new regional wastewater treatment facility to serve the growing population of north Dublin and parts of surrounding counties of Kildare and Meath. This project has experienced significant delays progressing through the consenting process. It is urgently needed and must be delivered without further delay.

Uisce Éireann remains fully committed to delivering best-in-class water services and infrastructure for Ireland now and into the future. Despite challenges, with the continued support of Government and our stakeholders, including elected representatives, we are confident we will continue to deliver critical water and wastewater infrastructure to support the public policy objectives on housing, climate action and economic development.

I thank members for the invitation. We welcome the opportunity to brief them on our important work and we are happy to take any questions.

An Cathaoirleach

I thank Mr. Gleeson. There are two phrases in those opening statements that I have not heard before and I might not be the only one. What does Uisce Éireann mean by "self-lay in public roads"?

Mr. Niall Gleeson

Originally, we would have insisted that all work on public roads would have been undertaken by Uisce Éireann or contractors working for it. This was a request from developers where at times they would be running other works in public roads so we have allowed an accreditation scheme and allow those developers to do the works.

An Cathaoirleach

CIF's opening statement referred to first mover disadvantage.

Mr. Conor O'Connell

The are often cases where, for example there might be 100 acres zoned for residential purposes but the landholding would be divided into different owners. The owner of the 20 acres at the front of the site would have to apply for planning permission first. In many instances, they would have to pay for an upgrade of the public infrastructure to facilitate their planning application and, therefore, there is an issue where first mover of a parcel of lands is disadvantaged with the cost of the infrastructure to facilitate the whole of the development. The CRU had an open consultation recently and a decision was taken that the shared quotable rebate, SQR, approach would be taken. That would mean they would have to pay for all of the cost of the public infrastructure. There is an ability to recoup some of those costs in a ten-year timeframe but there are difficulties and there is the length of time getting through the planning process. I am sorry for the long-winded reply.

An Cathaoirleach

No, I get it. I thank Mr. O'Connell for the clarification. We will move to members now and Deputy Ó Broin is first.

Deputy Eoin Ó Broin

I thank everyone for the presentations. The opening statements deal with a wider range of issues than was the intention of the committee. They are all important issues but I want to focus specifically on the interaction between the utilities and developers in new residential construction, both in terms of the demand-led approach that Mr. O'Connell spoke about and then also the future planning aspect. It is not because I do not think the other issues of reform, funding of infrastructure or zoning are not important but we will deal with them elsewhere.

My opening question is general and to all three organisations. When we hear and talk to people in our constituencies and elsewhere, they outline a range of friction points between developers building much-needed homes and utilities that are providing much-needed connections. We know that every situation is different and that there are often very complex reasons those fictions points arise. Trying to understand those better to iron them out of the system is in everyone's interests. Cost is one which Mr. O'Connell has alluded to. A view is expressed that the cost of connections is higher than full-cost recovery or is prohibitively expensive. I invite both Uisce Éireann and ESB Networks to comment on costs and why they are set at the rates they are for the benefit of the committee. The second is process. I get the sense that a very large residential developer probably experiences the process of agreeing the connections much better but for a medium-sized and especially a smaller builder-developer, particularly outside of the large urban centres, it is a much trickier process. I invite both CIF and the utilities to comment on that process. Has it changed in recent times? Do both sides acknowledge there are issues that can be addressed? How can we improve them?

The third area is capacity and forward planning. That is a bigger area than meeting the needs of individual developments and individual occasions. Are we moving to a stage, particularly on the back of Irish Water-Uisce Éireann's capacity plan, to having much greater visibility on what is the capacity and where so that when developers are making investment decisions on buying land and securing planning permission, there is a reasonable expectation that while there is not capacity now there is likely to be in there future? I know that there is a lot more joined-up-thinking with the local authorities in the development plans but within the private landowners who are developing that plan, or indeed the public developers for public housing, can we get a sense from both sides as to where that capacity and forward planning is at?

I am inviting the organisations to be critical of each other not to have row about this but it is to try and identify the friction points because I think that would be useful. There may be things that the committee can usefully recommend to the Minister. Certain recommendations could make everyone's job easier. I am inviting everyone to be polite but critical if that is possible.

An Cathaoirleach

Was the first question directed to CIF?

Deputy Eoin Ó Broin

It is a round robin. It is really to invite people to contribute and we might have a second round for those who we miss.

Mr. Conor O'Connell

ESB is established a long time and has a funding model that is significantly different from Uisce Éireann. ESB has a direct fee or charge from electricity users who pay for their electricity. That is not the case with Uisce Éireann. It is a new entity. There is no doubt that there have been teething problems. I think it is fair to say that and everyone would acknowledge that we need to get to know each others business and how they operate. It is very procedural. We hear complaints about the timeframes involved. That is probably down to resources at times. The Deputy mentioned costs and capacity. Uisce Éireann recently published a capacity register of 47 settlement areas and that will certainly help. However, in most instances one will not know the capacity of the local network until one goes for a connection agreement. A connection agreement is supposed to take 16 weeks. If it is a complicated one involving many units with a sufficient capacity deficit, it will take longer than that. The cost of that are unknown until the developer gets their draft connection agreement back.

Mr. Niall Gleeson

On the cost side, we are engaging in a refund process on the cost of connections for Uisce Éireann. Those costs, at least in the short term, will be moved away. There is the challenge of providing the infrastructure associated with developing a site and the first mover disadvantage is a challenge. I will ask Ms Harris to comment on the process and how that works. We understand there are complaints around the complex ones but the majority do get through reasonably quickly.

Ms Yvonne Harris

Over the past 18 months, the process in Uisce Éireann has been changed to build in efficiencies and look at what worked well with developers and where we were less effective. Over the past 12 months, we improved our front-end process in our key performance indicators by 10% overall. In the connection application example that Mr. O'Connell spoke about, we issue 75% in ten weeks. Three of every four applications, where we have the information and it is straightforward, we issue in ten weeks. As he said, a complex one will take longer. If it was a binary question, the answer would be "No, we cannot support". It is not our desire. Our desire is to support housing and homes. We will take that complex application and go to colleagues across the organisation and get into modelling. We may have to get information from local authorities and we work away at it until we get the right answer and we can come back with a positive answer. Where we may not have been effective in the past is that we did not always communicate what we were doing and, therefore, the customer or developer might have been left wondering if the application had gone into a black hole. Therefore, we established a developer liaison group in Uisce Éireann and it engages in the region of 100 developers. We have one-to-ones with 35 developers. We attend all the CIF conferences and workshops. Our vision is to be accessible and transparent and visible to industry to so that developers big and small know how to get access to us and know who to come to so that we can resolve the issues.

Mr. Nicholas Tarrant

There are three parts to the question: price, process and capacity. First, on the process for how prices are set around new connections, because we are a regulated entity, regulated by CRU, we operate in five-year price reviews. At the start of each price review, the cost of connections is benchmarked. External consultants are brought in to look at those costs and they are adjusted as the years go on in the five-year period. Every year, as part of that review they are updated and published and that sets out in a transparent way the cost of new connections for different types of housing, for example.

I will give the committee a couple of examples. For a once-off house in a 20-unit development the cost is €1,038. For a rural connection it is €3,235. The way the regulatory model works is that the end customer pays about 50% of the actual costs and the other 50% is borne by the general customer base connected to the distribution network through bills.

On the process, we have a step-by-step process that is documented. We go through it with the developers and through the various housing agencies. As part of that, and similar to the Uisce Éireann engagement, we engage with customers all over the country through our regional offices, our area managers, and people like Mr. Rossiter at regional manager level. With the bigger developers, we have initiated a process where we work with them on a multi-year programme looking at where we should be on site for various stages of the construction period. We are looking to continue to improve. This is measured through our regulatory contract where there is independent measurement of our customer satisfaction. We are scoring overall in customer satisfaction at around the 82% mark but it does vary across the country. One can imagine that some of the biggest pinch points are along the east coast where we have some of the biggest housing challenges. I believe the process overall is working well.

During my introduction I also mentioned supply chain. We must keep ongoing dialogue with developers as they are going through their projects and as we are working around the supply chain to make sure we hit the targets. Thankfully, last year we saw a big increase in the delivery. A process like this is always a work in progress and we are always looking to improve it.

On the last point about capacity, we are looking, on an ongoing basis, at the future and where we should invest across the distribution network. In my opening statement I referred to a convergence happening around electrification of heat and transport, which is leading to more capacity needed on the network. That is also required for housing. We have a forward planning area in our business and asset management that looks forward and plans the projects of the future. Ultimately, they are approved by the Commission for Regulation of Utilities, CRU, as part of the price review process every five years.

Deputy Emer Higgins

I thank all of the witnesses for being here with us today. Increased capacity and accelerated delivery when it comes to housing is pretty much what this committee is all about. All of the witnesses have a role to play in Housing For All as well. From the opening statements, I see that it is all about identifying issues for the Government to look at, whether that is the national planning framework, compulsory purchase order, CPO, powers, or the streamlining of licensing. What was not included in the witnesses' opening statements were the issues within their own organisations, which we also need to look at. From a Construction Industry Federation perspective we know there are developers and speculators who are sitting on land and sitting on planning permissions. We know that we have situations, and we certainly have had very high-profile situations in the past, where we have not been able to occupy whole new housing estates because they are awaiting connections with the ESB or with Uisce Éireann. It is important to acknowledge this because it is important that we learn how to get under the hood of those issues and how to fix those issues. I thank Ms Yvonne Harris for outlining some of what Uisce Éireann is doing to speed up its own connections. I put this question to the ESB. What is the current service level agreement, SLA, for want of a better phrase, on connections and how are things going in that regard?

In the Uisce Éireann opening statement reference was made to the triage system. I would like to learn a little bit more about this, whether this is within its own scope to do, or is it something the Government needs to provide direction on. Are entire estates treated the same as individual once-off rural houses? How are things graded with regard to priority?

I commend the ESB in particular on its apprenticeship scheme and it doubling - I am really impressed by that - and with the delivery capability being increased by 85%. What does that look like to the end consumer? What does that look like to the person who is buying the house? I agree with the CIF when it says that the additional costs cannot be incurred by people buying houses in the context of the new legislation that is coming down the tracks. Perhaps Mr. Tarrant from the ESB can take that primary question first about how things are speeding up.

Mr. Nicholas Tarrant

Looking at 2022, in our submission we referred to the 36% increase in the number of connections that were delivered last year. We have put in a range of measures and my colleague, Mr. Rossiter, will speak on those shortly. The resourcing point is key. The increase in resources that we have seen in the last 12 months include recruiting out in the marketplace and also growing our contractor capabilities. We are seeing that where we have pinch points in our work programmes in general we are looking to add contractor capability to grow that. If we consider the amount of infrastructure to be built over the next decade and across electricity in general, we need to continue to build that capability in the general workforce. That is a challenge. We are looking to grow our contractor capability beyond where it is today. For example, we are looking to bring in contracted personnel from outside the EEA region. We have written to the Minister for Enterprise, Trade and Employment, Deputy Simon Coveney recently and to the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan in that regard. It is key that we continue to build resources. With regard to the ESB internally, the Deputy mentioned the apprenticeship programme. That is a very important area for us for the future. We have also done other things such as centralising our design function to really accelerate the amount of connection offers we can issue at early stages. Mr. Rossiter will say a little bit more about that.

Mr. Alan Rossiter

On the question around the average days to connect, we have an SLA around single houses. Once the developer's electrician certifies each individual premises, our SLA is to connect that within ten working days. This is part of our customer charter. For larger developments of two or more houses, which we call G1 developments, which could be apartments or large scheme houses, we would keep pace with construction.

It is very important that we try to be very proactive in meeting the developers to see what the pace of construction is, and we have done this in the south-west region for example. It is very rare that a full housing scheme comes online all at once. We would look at that. On the larger developments that require greater than 100kVA we are very much within our SLA. On our single houses such as rural once-off houses, we were operating at 23 days or 24 days in 2022. Mr. Tarrant mentioned that we are externally benchmarked on that, and on the once-off houses we have a 92% satisfaction rating with the once-off houses.

Deputy Emer Higgins

Is that on the 23 or 24 days, or the ten days?

Mr. Alan Rossiter

It is 23 days.

Deputy Emer Higgins

What was the ten days?

Mr. Alan Rossiter

The ten days is the customer charter commitment.

Deputy Emer Higgins

And it is currently at 24 days.

Mr. Alan Rossiter

It is 23 days or 24 days. That is an average. That is from when the certificate comes in until we get that constructed. With the large developments, early engagement with developers is very impactful. For example, the scale of the step change that we experienced last year was an increase in excess of 70% in new connections in the south-east region, which includes Dublin city and Dublin south, which is a very substantial increase. We really targeted resourcing at that and internally, plus we now also have multi-year large framework contracts set up that would also deliver these connections. The Deputy asked what would this mean for the future. I am very confident that there will be faster connections and greater engagement with the developers.

Deputy Emer Higgins

CIF is then putting forward the case for population projections from 2011 to 2016 being used for the population projections going forward for the development plans and the zoning. If that were to change and their feedback were to be taken on board, and more ambitious targets identified around population growth being matched with development, what are the capabilities of Uisce Éireann and the ESB to be able to ramp up in that situation?

Mr. Alan Rossiter

In the submission the Deputy will see that in 2006 - our previous record year for new connections - we completed 105,000 connections, which included commercial connections. Last year we completed in excess of 33,800 connections just in our new connections for once-off and housing schemes. That is a 36% ramp up on the year before. With the resourcing that we have put in place internally, with the engineering capability we put behind that, and with our framework contracts I am very confident that we can ramp up from there as well.

Mr. Niall Gleeson

I might comment on the Deputy's question at the start on triage. Our suggestion there is that national development projects like our own water supply, the greater Dublin drainage or ESB's network improvement should get priority in the various consenting bodies such as An Bord Pleanála and the EPA. They should be prioritised because if we do not have those we will get the housing developed and all those things developed beside it. That is our ask in that sense. Ms Harris might comment on the prioritisation of customers and on the ability to ramp up as well.

Ms Yvonne Harris

Historically, we treated all applications the same, as such. When looking at the efficiency of our process last year, we built a new process for one-off domestic housing, so the one-offs fly through the system. That is positive for personal homeowners building their own home. That leaves us with the development community and big initiatives like the SDZs. We have our senior engineers assigned to the SDZs and over the year we ramped up our resources to meet demand from industry on the development community. Again, we are very much about keeping up with demand and driving efficiencies where we can. On some of the efficiencies, there is the self-lay initiative we talked about. We are looking at initiatives like that so we can support developers doing as much as they can on site, which takes pressure off Uisce Éireann then, but we ensure we maintain our standards with them. We are always looking for efficiencies.

I would like to comment on the housing estates not connected. I am not sure if we have much time to do it.

An Cathaoirleach

That is probably of interest to all of us so I will allow that.

Ms Yvonne Harris

We might need to revisit it. Typically, our model is that if a developer engages with us from the outset and makes the connection application we make a connection offer and there are often terms and conditions associated with that offer. Uisce Éireann immediately offers a field engineer to begin engagement with the developer from the early stages of the development. If that collaborative effort continues through the whole lifecycle of the development it is very unlikely there will be delays in connecting. What often happens is the developer pushes ahead without engaging with Uisce Éireann and starts the build. We have high technical standards. Our objective is obviously to secure public health and ensure water quality is of the correct standard. We want to ensure the technical infrastructure is correct, so when a developer pushes ahead and we then go on site, we find the technical infrastructure does not meet our standards and everyone is on the back foot. That is generally why we have long delays in housing estates. There can be shorter delays due to resourcing or otherwise, but the longer delays are typically because of that lack of engagement and that really is our ask. My colleagues in the CIF know at every event, conference and workshop we attend we ask developers to engage early because it makes life so much easier for everyone and gets people into the homes quicker.

An Cathaoirleach

I am aware CIF probably should respond to that but I am going to move on. I have to. The representatives can come back and respond later. We move to Deputy Duffy.

Deputy Francis Noel Duffy

I thank the Cathaoirleach. As always, I thank our guests for their statements. I had a number of questions about delivery I am not going to ask because we are all trying to deliver housing. Thus, my question is about collaboration. Do the three organisations here meet to co-ordinate housing delivery in the context of infrastructure or have they in the past? With that, do they effectively lobby us or the Department to tell us how we can deliver better? With respect to that State-led infrastructure, have the organisations made those proposals to the Department? This type of infrastructure is already here. In South Dublin County Council there is Grange Castle and as far as I know the council built all the roads and put in the infrastructure, so it is there for business and I am not sure why it is not for housing. I think the Spanish system may work this way as well, in that the local authority gets in, builds out the roads and infrastructure and then the developer comes in afterwards, so the problem is not there at the beginning. Are the organisations aware of the Spanish system or do they know why we cannot adopt the IDA Ireland-local authority business park system in development plans and deliver housing that way? Has that already been done and kicked back?

Mr. Michael Kelleher

Unfortunately, the system that has evolved is that the local authority does the zoning, Uisce Éireann has one set of utilities and then there is the ESB. There is collaboration but there are different metrics to drive. We have a situation where the capital programmes are not aligned. We have development plans that last six years, which is out of sync with Uisce Éireann's plans. There is a need to bring full alignment on those plans so everyone is looking at the same metrics to forward-plan on zoned land. That has not happened heretofore. It is why we are looking for more co-ordination on forward planning and looking ahead by ten or 15 years, so if it is a plan-led development from the NPF going down onto the regional plans and into local plans, we should, as a collective, be able to understand where we want development to take place over the next number of years and have designated where the growth should be through that. Therefore, we should all be collaborating to ensure the infrastructure is put there so we do not have the issues where we have a lag. Let us be clear the planning system is complex because of environmental and other issues. It takes a long time to get through the system and we need to be getting everything shovel-ready so it is ready to be developed, because the building is not the problem here and instead it is everything beforehand that is causing the issue.

The are other issues, like 50% going into brownfield development. That is a good idea from a sustainable point of view but is unviable at the moment. There are a number of different issues causing this logjam that is constricting development, even though the industry has ramped up, as Mr. O'Connell said, 45% last year to deliver. We are going to plan-led development and we now need more looking forward and more forward planning being done collectively. We are looking out to 2040 in the NPF. We need to be looking out there now, because if we go to ten-year development plans we need to be looking to the 20-year plan so the infrastructure is there, like the Deputy was saying. It is there for the plan, so the land is zoned. The biggest problem we have is not that land is being hoarded. We know of land that has been sitting there for two or more development plans because of lack of infrastructure. That is the key issue here. We are delighted Uisce Éireann has done this heatmap to deal with where the servicing is. That is an important tool for us all to ensure we understand where the issues are and deal with them.

Mr. Niall Gleeson

The capacity registers just referred to indicate to us we have capacity for almost 400,000 units in the country. They may not be where everyone wants to live and there may be ESB constraints or road constraints. We can only look at what we are looking at. This is Ms O'Dwyer's area of expertise so she might come in on the constraints we currently work under with planning and development. Then there might be a discussion on what could change.

Ms Maria O'Dwyer

I might talk about our approach to investment planning in general. We very much endeavour to adopt a plan-led approach. Our investment is set, probably, by the policy directors and water services policy statement first. We have our own water services strategic plan setting out how we are going to deliver on Government priorities and what we see as the strategic long-term directives for water services to develop out over a 25-year period. We also engage with our regulators and other stakeholders.

In this specific area, if I focus on growth, we are very mindful of the regional spatial and economic strategies. They focus on the 48 core settlements, as members will be aware. Our capacity registers for water and wastewater are something we developed two years ago with the initial idea of engaging and being more collaborative with the planning authorities in terms of giving them tools to see where we had capacity in our water treatment plants and wastewater treatment plants. We have probably modified them and have a version of them, as we said earlier, up on our website. Those registers cover all the agglomerations we serve and all the areas we are serving with our water supplies. I will focus on the 48 settlements. What Mr. Gleeson pointed out is key, namely, if we just look at those, there is capacity in our treatment plants to service over 400,000 housing units. However, as Mr. Kelleher was talking about, it is a question of how to get that capacity out to new housing estates. That is where we are looking at our networks. With many network solutions we have a view they could be delivered in a year or two.

That is where we will be looking for the early engagement that Ms Harris spoke about earlier, in order that we could best deliver on that.

That said, there are strategic networks that it is our responsibility to deliver and it would be too much to expect any one developer to be able to do that. A lot of work has been done in recent times to start looking at master plans for different development areas to see how we will develop these out. We work in collaboration with the planning authorities in setting their county development plans to be able to share what areas we have capacity in and what areas we do not have capacity in. The message we try to put out to the development industry is that there is a lot of capacity in our system and that it is about aligning development into the areas we can serve now. It will take time to serve other areas. There will always be land parcels out there that are not serviced but it is only through good collaboration that we can work together.

Deputy Francis Noel Duffy

On the business parks, for example, I am assuming the local authority and IDA Ireland pay Uisce Éireann to put in the infrastructure and that it is not the developer. The user of that land, whether it is Pfizer or whatever other big company that is based out there, then pays for the service, whether it is water or electricity.

Ms Maria O'Dwyer

The strategic development zones, SDZs, might be a good example of what the Deputy is talking about. Typically when an SDZ goes through a planning process it is put out that there is a call on developers to engage on how the large strategic infrastructure in that site would be provided. We have had some good examples of that, such as Cherrywood, where the developers have come together. We have worked with the developers there and that arrangement worked to get the core strategic infrastructure into the site. Then every development is just funding the local network infrastructure to connect into the larger trunk mains within the estate.

Deputy Francis Noel Duffy

There is a local area plan where I live, it has been there for ten years and nothing has happened with it. The developer on that site is finding it hard to start building because it has to pay out all that money and it questions whether it is worth it. It is bizarre that the local authority would create that plan and then take the attitude that its job is done at that point. You would think there should be some collaboration between all the stakeholders on the likes of building the road through it and getting the lots done, at which point the State would go in and provide it.

Senator Victor Boyhan

I welcome our guests. There is a lot to cover and I am conscious of the fact that we are here to discuss our generous infrastructure provision and residential development. That is why we have convened this meeting and why the witnesses have been invited to engage with us so I want to keep the focus on that.

I want to direct my first round of questions to Uisce Éireann. We have read Uisce Éireann's presentations and papers and I thank it for submitting them in advance. There are three key asks when you distil everything the witnesses from Uisce Éireann have said today and what it has said in its submission. In the submission, Uisce Éireann refers to "The prioritisation of key enabling strategic infrastructure that will support economic growth including the delivery of housing" and mentions a triage system, which makes clear sense, so the witnesses might touch on that. The submission goes on to ask:

That Uisce Éireann is given appropriate powers to complete its functions, particularly when it comes to Compulsory Purchase Orders, Taking In Charge (TIC) [which Uisce Éireann will be familiar with], and exempted developments. These powers currently rest with the Local Authorities under the draft Planning and Development Bill, which we believe is incorrect.

We need to tease that out a bit. Uisce Éireann has made those assertions and asks and there is great clarity in the messaging, which is key and we know a lot about what people think. I want to touch on those three key messages that Uisce Éireann has set out in its presentation.

Then I want to ask Uisce Éireann to look at the issue of capacity. I was a councillor for many years in Dún Laoghaire-Rathdown County Council and I remember many an application being refused by An Bord Pleanála on the basis of no surge capacity, in Poolbeg for instance, and we saw a major surge in Dublin Bay because of capacity. Things moved on and we have had tertiary treatment and different things but we still have a major issue and the lack of surge infrastructure in Dublin Bay is a major issue for An Bord Pleanála. We know that developments have been refused permission, at a time of a housing crisis, and rightly so, because there are environmental and capacity consequences. Does Uisce Éireann have the confidence to tell this committee that it has the capacity to roll out development with the greater Dublin area? Let us just take the greater Dublin area, which is the area I want to focus on. There are key messages about that and I would like to leave here today knowing that Uisce Éireann has the capacity or that it identifies honestly that there is a weakness in the capacity and then tells us what it is going to do about it. That is important and I would like the witnesses to address those issues.

I will park another question for CIF. I am familiar with section 49 levies and I see the development of the B1 and B2 levies out to Cherrywood. I see a range of levies that people are paying and I want to ask why it is all being absorbed by the first-time buyer versus the second-hand buyer in the same district. In some of those cases a first-time buyer could not buy a second-hand house but that is another day's work. CIF rightly calls for something and it talks about the need for mature, frank and honest debate on how we will fund the infrastructure. It is as simple as that. We have the dichotomy and political angst about property tax and at best we have local administration. We do not have local government in this country at all; we only have a basic local administration that is centralised by central government and that does not allow a lot of discretion. That is for the CIF later if we have time but I would like to direct my initial questions to Uisce Éireann.

Mr. Niall Gleeson

On the triage system, I will detail what we would like in that area. I meet the various CEOs of all the State bodies and we have the national development plan that we are trying to pull together. Our projects, that are critical for delivering all of the other schools, hospitals and housing should be prioritised within the various national bodies. That would not be too hard to do but there are things like: our water supply projects; the greater Dublin drainage, GDD, project; the infrastructure reinforcement; and MetroLink. Those kind of projects should get prioritisation through the consenting process; that is a reasonable ask and that is our request.

On the capacity for the greater Dublin area, we have said quite clearly on the wastewater side that we need the GDD project delivered, and it is crawling through the approval process. Originally we went for planning in 2018 and it got planning in 2019. It went for judicial review and it got knocked back on one issue out of 18 challenges, which was a procedural issue between An Bord Pleanála and the EPA. It has been with An Bord Pleanála for about 18 months, we were asked to revise some of our data and now we are waiting for a foreshore licence to get those data, which is about 20 buckets of sand out of Dublin Bay. It all lines up to be-----

Senator Victor Boyhan

How is that impacting on capacity?

Mr. Niall Gleeson

Right now it is not impacting on capacity because we are putting €500 million into the Ringsend wastewater treatment plant and that will bring its capacity up to about 2.4 million population equivalent, PE, by the end of next year. It is hard to say, as it depends on population growth but within another three to four years, if the GDD project is not on the system we will have wastewater capacity challenges in the system. Likewise, with drinking water, we are working the water supply project through the system but we know we will be constrained on drinking water supply for the greater Dublin region towards the end of this decade or early into the next decade if we do not deliver that project. We have the projects and the capability but if I do not get those projects through the consenting process, then we will have a challenge in the greater Dublin area.

Senator Victor Boyhan

I will go back to my question on Uisce Éireann being given appropriate powers. Can the witnesses set those out? If they cannot do so now then Uisce Éireann might drop a formal note to the committee. What additional powers is Uisce Éireann looking for?

Mr. Niall Gleeson

Ms O'Dwyer might come in on that question.

Ms Maria O'Dwyer

We are just looking for the same appropriate powers as were necessary for the water services authorities. We are looking for powers similar to what local authorities had when they were responsible as the water services authorities. It has been accepted that it is just a small starting point for the new legislation and the starting point was from prior to Uisce Éireann's existence. We are just looking for the same powers the local authorities had and we want to get those same powers so we can fulfil our function as the national water services authority.

Mr. Niall Gleeson

We are taking over some of those local authority functions in the transition so it is to have some exemptions, for example. If, for instance, we are making modification to a water treatment plant that does not change its characteristics that much, such as putting in new equipment or new tanks, we are asking that we could exempt the likes of that.

Senator Victor Boyhan

It would be helpful for this committee if Uisce Éireann could articulate those asks. I am most conscious of the people who are looking in and asking what this means and what Uisce Éireann is looking for, as it is a bit vague. It might be helpful for the committee, given the time constraints, to set out that ask.

What exactly is Uisce Éireann seeking?

Mr. Niall Gleeson

We have gone formally to the Department but we can send it on to the committee.

Senator Victor Boyhan

It would be helpful for the committee, as part of this process, to have a clear view of the ask.

I ask Mr. Fitzpatrick to address the issues relating to local funding he identified in his submission to the committee.

Mr. Hubert Fitzpatrick

Section 49 levies are borne entirely by first-time buyers but the services to be funded under the section 49 levies benefit the entire local community. It is an unfair charge on first-time buyers. A funding mechanism other than the section 49 levies should be in place on that front. Perhaps it could be funded from property tax or another form of general taxation of that nature. It is inequitable that first-time buyers of new homes have to fund a section 49 project in their locality.

Senator Victor Boyhan

I will finish with a statement rather than a question. Deputy Higgins put it well. The witnesses' organisations are involved but, although they have identified many problems, we have not heard their suggested solutions. I will leave them with this. In his submission on behalf of the CIF, Mr. Fitzpatrick stated that we must find a better way of paying for the timely construction of public infrastructure. I agree with that point but it would be helpful for the committee to hear more about what the witnesses are suggesting. It would be helpful to tease that out, although we do not have time to do so at this meeting. Mr. Fitzpatrick is very articulate on behalf of his federation and he has rightly identified an issue but we want answers or proposed solutions to the issue. it would be helpful to the committee if he were to set out how he would address the matter in a manner acceptable to the construction industry. That is not to say it would be acceptable to everyone but let him put his stall out and tell us how he would come up with solutions to this issue. I thank our guests.

Deputy Cian O'Callaghan

I thank our guests for their contributions. I wish to follow up with the representatives of Uisce Éireann on the suggestion relating to compulsory purchase orders. I will focus on a particular part of the issue. When those powers are with local authorities, there is a safeguard against over-reach in the use of those powers. That safeguard is the elected councillors. The water services division of a local authority may over-reach in its use of CPO powers by looking at a situation only in terms of provision of infrastructure when there are other aspects to be considered. In my constituency, for example, a utility company is considering putting in a depot in a location that the local authority would never consider because it is a scenic and high-amenity area. It is probably one of the most scenic areas on the east coast but the utility company, oblivious to that, wants to put in a depot. It is just thinking about its own needs or whatever rather than considering the overall context. If that power was with a local authority, councillors would be able to bring common sense to bear on the proposal. In the context of CPO powers for Uisce Éireann, given that it does not have direct accountability to local councillors or whatever, what safeguards are there in respect of over-reach, over-use or only considering a matter from the perspective of the needs of the utility or infrastructure? The latter is a very important piece of it and I am not taking from that but what safeguards are in place in that respect?

Mr. Niall Gleeson

We had CPO powers previously; it is just in the latest draft of the new planning Bill that it has been dropped. We are working with the legislation writers to correct that but it is worth highlighting at this session. We have a track record of not abusing that power. In addition, the planning process would kick in if we picked the wrong location. Ms O'Dwyer may wish to elaborate on that.

Ms Maria O'Dwyer

In everything we do, we are being as transparent as possible.with our investment plans. We go through a public consultation in respect of our plans on a five-year basis. We will be consulting, probably later this summer, on our next revenue control plan, but the CRU then goes to a further public consultation on that plan. We are open to as much public engagement as possible in respect of our plans. Ultimately, we are in the business of providing water services in areas where the planning authority has deemed that development is necessary to support communities throughout the country.

Deputy Cian O'Callaghan

The suggestion relating to public infrastructure and having the processes and various consents running concurrently, rather than sequentially, is an important point. It must be incredibly frustrating to have parts of the consents for a large project time out and have to go back to get fresh data because of the delays and then have to get a new consent to get fresh data or surveys. There is strong logic to trying to run it as concurrently as possible. In the written submission provided by Uisce Éireann, there is reference to the solution being to have one lead authority. Is the suggestion that the EPA or An Bord Pleanála would be the lead utility authority? I ask Mr. Gleeson to talk us through how that might work or what Uisce Éireann is proposing.

Mr. Niall Gleeson

It is probably a big ask. It might be a new authority or a case of adapting the planning authority, for example. It would be more of a co-ordination role. The EPA and An Bord Pleanála know what they have to do but the interaction and tracking of who is doing what is not there at the moment. It would be a body that, first, would allow us to do the applications at the same time. At present, the EPA typically waits for us to have planning permission before it will consider a licence application. It might make a decision on the licence application that might impact the planning permission and we may have to go back and adjust the planning application. Running them concurrently would make a lot more sense.

Deputy Cian O'Callaghan

Is this a result of the processes the authorities have chosen to adopt or is it down to legislative requirements? In the case of large public infrastructure processes that have gone though the consultation period and planning, the applicant may be told that certain matters, such as the granting of a wastewater discharge licence, for example, will be decided at a later stage. Certain issues may not be part of the planning process but, rather, are decided later on. Is a change in legislation needed or is it just practice and culture? Does it vary in the context of different infrastructure projects?

Ms Maria O'Dwyer

It is just the way it has been done in the past. If we did not have the level of development we have right now, it might not present such a significant problem. It is challenging for us, especially when we are dealing with large industrial connections or have upgrades. As the committee is aware, time is everything when people are trying to make certain investment decisions. From our perspective in being asked to deliver infrastructure, whether for housing or industry, the more certainty one can bring to the processes, the better. For us, the big challenge is the different processes we have to go through and the uncertainty in respect of timelines within each of those processes. We want to be as transparent as possible in all the processes we go through but there would be benefit to having clarity from beginning to end and knowing that once one enters a process, one can be sure one will come out of it at a particular time.

Deputy Cian O'Callaghan

Let us say a wastewater facility gets planning permission and then applies to the EPA for a wastewater discharge licence or whatever. Is there a difficulty for the EPA in granting a licence for something that does not have full planning permission? The planning process could alter the size of the wastewater infrastructure or make alterations. If the EPA has already granted a licence based on what might be submitted to a planning process, does that mean it would have to go back to the drawing board? How are all those issues squared out?

Mr. Niall Gleeson

There might be a little extra work involved but it could be done in such a way that a licence would be granted a month after the planning permission. That would allow a lot of parallel work to be done. At present, we have to wait until we are completely through planning and then go through the licence application.

Deputy Cian O'Callaghan

That has to be done before Uisce Éireann can start work.

Mr. Niall Gleeson

Yes. The licence application is then open to judicial review or challenge. It makes the whole thing cumbersome.

Deputy Cian O'Callaghan

In a way, the process might still be sequential, rather than being absolutely concurrent, but with strong overlaps. That might be what works. There may be a clear sequence whereby processes would start and each would complete slightly after the previous one.

Mr. Niall Gleeson

There are challenges in issuing a licence before planning is finalised but one could certainly be doing work in parallel and issue the licence a month after planning, for example. Much of the groundwork or pre-work would be done already.

Deputy Cian O'Callaghan

It would take a great deal of co-ordination to get it all exactly along those timelines. Even if it was somewhat concurrent, however, that could give rise to significant time savings. I thank the witnesses.

Senator Mark Wall

I welcome all our guests. I want to start with the labour challenges that are facing them. Reference was made to this earlier. I want to concentrate on the area of apprentices and apprenticeships, acknowledging the ESB scheme. Maybe I could have a comment from all our guests, even Uisce Éireann, on any challenges for their own areas in respect of apprentices. We are hearing from different groups that there are challenges getting people into the jobs we need in order to complete the houses that we all need. I would be interested to hear from CIF and all our guests about where that is and what they are seeing on the ground, most importantly. Are there specific trades where there are challenges? I would like to get an overall view of that starting off.

Mr. Conor O'Connell

My colleague Mr. Fitzpatrick will add to this. There are 20,000 more people now working in the construction industry than there were pre-Covid. We are doing well in certain trades, electrical and plumbing in particular. There is a challenge around the wet trades: painting, plastering and brick-laying. It is a significant challenge. We are doing our best with different schemes, promoting the industry and so on. Recruiting people into the construction sector is a challenge but recruiting people into any sector at the moment is challenging given the tight constraints that exist in the labour market. However, having said that, with the growth of modern methods of construction and timber frame, insulating concrete forms, ICF, and other types of modular construction, last year the housing output increased by 45% although there was not a corresponding increase in the numbers employed in the industry. We are getting more efficient. There are fewer trades needed onsite but it is continuously a challenge.

Mr. Hubert Fitzpatrick

It is a challenge in all sectors, as Mr. O'Connell pointed out. I would say that this is not the biggest challenge. The biggest challenge facing the industry is literally a stock of viable, serviced land with viable planning permissions. If that issue was addressed we would see a lot more housing supply being delivered throughout the country.

Mr. Nicholas Tarrant

As we mentioned in our submission, ESB Networks has increased its apprenticeship programme. We have doubled our numbers up to 96 per annum. We have a national training centre in Portlaoise which is equipped to train our apprentices. The level of training we are delivering in that facility has increased by almost double last year and almost double again because of the qualified electricians we are bringing in and training on our own systems. Our apprenticeship is very attractive and we attract a lot of applicants. One of the benefits in the programme in terms of careers is that we are a national organisation, enabling people to live in their own communities if that is what they choose to do. The apprenticeship programme is very successful and we are seeing really high-quality people coming through. One thing I might mention as part of the apprenticeship programme is the whole area of diversity. In the last intake, we had approximately 25% new female apprentices coming through the system. We are really encouraging that and trying to broaden the attractiveness of the industry to get more people in.

On wider resourcing, in response to Deputy Higgins's question about the wider supply chain, we are working with our contract partners to grow our capacity. It is critical, not just for housing but in the context of the whole change that is coming with climate action and the need for investment in infrastructure. Major investment in infrastructure is required and we need people to support that and have the skills in the industry to be able to grow. That is a really important point for the future.

Mr. Niall Gleeson

The CIF supplies a lot of our construction staff so they have covered that point. On our own water services staff around the country, we have a challenge in that we are trying to attract the water services staff from the local authorities into Uisce Éireann at the moment. We will be going through that process over the next few years and it will give us an idea of what kind of workforce we need. With retirements and the age profile of existing staff, even if they come over there is going to be a wall of retirements in the next five years so we have to hire. We are looking at creating a water services apprenticeship. We know we need to have people in the communities working on those plants. That will continue in the future.

Senator Mark Wall

I appreciate that. The second item I wanted to touch on is rural housing. It is something I am involved with in the Kildare area. I want to get our guests' comments on the challenges facing rural one-off or two-off houses, whatever we want to call it. What are the challenges in providing that infrastructure? It is a challenge that I meet every day with constituents who are looking to build one-off houses. Since I have all our guests in the room, I would like to get their views on the challenges they face in respect of one-off houses.

Mr. Nicholas Tarrant

If I can go back to an earlier question very briefly, similar to Uisce Éireann, we have a retirement profile we are looking to manage around resources. It is important to acknowledge that. On one-off houses, in response to an earlier question, our overall ability to deliver one-off houses is strong. We delivered in the region of 8,000 last year. Mr. Rossiter will confirm the exact number in a second. That includes some reconnections as well. Overall in our customer feedback that we get, which is independently measured, we get a really strong performance on one-off houses with over 90% satisfaction with the process overall. It is something we will continue to work on but I think the performance is good.

Mr. Alan Rossiter

In 2022 we completed over 8,400 one-off houses. There is an element of reconnections of farms included in that, lower capacity farms. It is a significant increase on the year before. This year to the end of May we have completed just under 3,000 one-off rural houses. One thing we have done proactively to future-proof the connections of these houses is that in 2019, with the approval of the CRU, we sought to allocate additional capacity for these housing connections. That is to cater for decarbonisation, heat pumps and electric vehicles. It is mentioned in the submission that over 50,000 houses have been connected to this revised design standard. That is a very positive improvement. We will keep monitoring to make sure we are future-proofing every connection we can.

Mr. Niall Gleeson

On one-off housing, the biggest factor is proximity to our existing networks. Drinking water is not too bad but wastewater is very difficult over long distances, especially for a one-off house. Ms Harris might come in on the advice we give on one-off housing.

Ms Yvonne Harris

As Mr. Gleeson has said, costs can be prohibitive. We have guidance on our website. We direct all of our customers, whether they be developers or one-off homeowners, to the website. It can happen that when a homeowner engages a developer contractor, sometimes they forget about the water connection and we have an escalation at the very last minute because it has fallen between the contractor and the individual homeowner, which is unfortunate. We always work with the homeowner to get the connection made for them. Last year of the 37,000 homes we facilitated, we had to refuse applications for 305 homes. That was 161 applications representing 305 homes. Some of those applications would have been for one or two homes and some would have been for one-off houses. It is less than 1% of our overall offering. Considering water and wastewater connections is not always foremost in individual homeowners' minds, which is understandable. All of our guidance is on the website and we encourage people to access it.

Mr. Niall Gleeson

Early engagement is the thing.

Senator Mark Wall

If it is last minute when they start looking at the costs, they can be prohibitive.

Ms Yvonne Harris

Our costs are fully recovered, unlike our colleagues in ESB Networks. They recover 50% and then 50% over the lifetime of the asset, whereas ours are fully recovered upfront. It can be a little bit of a surprise to people if they have not considered it.

Mr. Hubert Fitzpatrick

From a CIF perspective, a lot of one-off houses are not actually managed by a builder or main contractor. A lot of them are self-builds. We would certainly advocate that the one-off housing should come within the full scope of the Building Control (Amendment) Regulations 2014, BCAR, which are the standards scheme housing is subject to, so that people would end up with formal certification of compliance. That would certainly be worthwhile. In our view it protects the builder of the one-off house.

Senator Mark Wall

Interesting comment. Thank you, Chair.

Senator John Cummins

I thank the three bodies for being here this afternoon. It is much appreciated. As all my colleagues have said, our primary goal here is to speed up the delivery of homes. This session was pencilled in a number of months ago.

If I may start with the ESB, one of the topics at that point in time, in February, was media reports of demands for payments in respect of connections for developers. The matter was well covered at the time and, to be honest, it probably did a lot of reputational damage to ESB Networks. I would like to give Mr. Tarrant the opportunity to address it here at the committee at the outset.

Mr. Nicholas Tarrant

Approximately a year ago a development company came forward to us making serious allegations around a small number of employees. We took those very seriously and we reported them to An Garda Síochána at the time. We have obligations under the Criminal Justice Act 2011 to report such allegations to An Garda Síochána, and there is an ongoing Garda investigation around this. I will make a few comments that are basically in the public domain. There are certain things that, obviously, I cannot cover, given that there is a Garda investigation and the fact that there is a number of ongoing High Court cases around this.

To elaborate a little further, in light of the allegations that were made by this developer, we initiated High Court action to get information that the developer may have had to substantiate the allegations that were made at the time. That process continued during last year. It is important to say that the reason that this ended up in the press is the action we took as a company to seek to get to the bottom of these allegations. That process is ongoing. Those court cases are not at an end at this stage. Of course we understand, looking at the history of the ESB, that ours is a company that depends on public trust and the trust of members of this committee and public representatives in general, and we protect that very dearly. If allegations have come forward, we have progressed them to get to the bottom of them. Ultimately, there is a Garda investigation ongoing, and we will have to keep an eye on developments as they progress over the coming months.

Senator John Cummins

Does the CIF want to comment in that respect? I appreciate that this is an issue for the ESB, but connections and their speedy resolution is an issue the CIF's members raise on an ongoing basis with committee members. We all want to see connections delivered quickly, be it from Irish Water or from the ESB. Perhaps the witnesses do not want to go into the specifics but, in general, just in terms of the CIF's dialogue with the ESB in respect of those connections and trying to get speedy resolutions for them to get people into those homes that have ultimately been developed by the sector, I am just giving the witnesses the opportunity.

Mr. Conor O'Connell

As has already been pointed out, these allegations are the subject of a criminal investigation but, generally speaking, when we were made aware of them, we contacted the ESB first. I think it gave us a specific email address, so we circulated that to all our members advising them to contact the email address with any information they may have relating to such allegations. The ESB, as the Senator pointed out, and connections to the electricity grid are critical for the completion and handing over of homes, so we are appalled by these developments and advise that-----

Senator John Cummins

I have just one final question. Has there been any further contact with that confidential line relating to any other allegations?

Mr. Nicholas Tarrant

To my knowledge, there has not. It is important to say as well that-----

Senator John Cummins

That would be important.

Mr. Nicholas Tarrant

-----we have engaged with the CIF as part of this and, as part of our ongoing engagement, there was a communication to its members. We have a confidential helpline and, to my knowledge, there has been no contact around this since. We operate to the highest ethical standards. Our employees across the company do that every day. We are delivering housing connections and meeting the needs of the country from that point of view, with big increases delivered in 2022, and we hope that will continue.

Senator John Cummins

If Mr. Tarrant could confirm to the committee subsequently whether there has been - I know he has said that to his knowledge-----

Mr. Nicholas Tarrant

I am 99% sure that there has not been.

Senator John Cummins

That is fine. I thank Mr. Tarrant.

My second point relates to Irish Water and the difference between the pre-connection of 116,647 units and the offers of 36,989. I appreciate that there is a lag there, and planning may be a factor in that regard, but it could not all be accounted for in that respect. What is Irish Water's timeframe in terms of the turnaround of those pre-connections versus the offers? Is it satisfied that the timeframe in which it is turning them around is sufficient? If it is not, what measures is Irish Water implementing to try to speed up that process?

Mr. Niall Gleeson

I might ask Ms Harris to come in on this. The pre-connections sometimes involve people just speculating in respect of their land, so quite a lot of those drop off. I do not know if Ms Harris wishes to comment.

Ms Yvonne Harris

As Mr. Gleeson has said, the pre-connection inquiry is usually a pre-planning process. It is typically a desktop process, so the developer, the customer, will come and ask us if it is feasible to build on a site and do we have water and wastewater. There are typically very long delays between the pre-connection inquiry and the connection application, and many pre-connection inquiries never result in a connection application. While the pre-connection inquiry is an important process, particularly for feasibility, there are certainly considerations around maybe putting time limits on them. When a developer comes and gets a positive response from a pre-connection inquiry, they might not come back to us for maybe four years, at which point the capacity may have changed due to other housing or a large commercial customer. So the pre-connection inquiry and the connection application is, as the Senator says, largely a matter of timing. Then we would have multiple pre-connection inquiries for single sites, so only one will transpire.

Senator John Cummins

On your turnaround times at the moment in terms of getting those offers out versus when it moves through the planning process and out the other side, are you satisfied that they are being turned around as quickly as they could be? If not, what measures are you implementing?

Ms Yvonne Harris

Over the past 18 months we have resourced and looked at building efficiencies into the process. We have taken out one-off housing - one-off housing goes through very quickly - and we have resourced our teams to ensure that we meet our key performance indicator. Our key performance indicator that we publish is 16 weeks but, actually, we measure ourselves against a ten-week turnaround. For pre-connection inquiries we process 85% in ten weeks, and for connection applications we process 75% in ten weeks. As was discussed earlier, those exceptional items outside the 85% and 75% absolutely take longer, and the intention is that we come up with a positive response. We have to get into a much more detailed process for the exceptional items and the applications or the pre-connection inquiries where we do not have all the data available to us, but we also measure the ones that fall outside this set 10% criteria.

Senator John Cummins

Chair, may I come in during the next round?

An Cathaoirleach

Yes. Thank you, Senator Cummins. The next slot is Deputy Ó Broin's.

Deputy Eoin Ó Broin

To go back to why we take witnesses from their day jobs and bring them in here to answer our questions, we are keen to try to explore ways to improve things. I acknowledge there is a lot of very positive information in what today's witnesses have shared with us, as well as some of the challenges, but this committee is useful only if we take these opportunities to inform ourselves. We try to raise constructive improvements with the Government.

With that in mind, I would be interested in all three organisations' views on how we can better co-ordinate the forward planning. Both ESB Networks and Irish Water have very considerable plans for planning and planning divisions. You have to go through the process of public consultation, you have to go through the regulator, etc. Obviously, we have our development plans and they are increasingly complex. There are commercial operations by individual landowners in respect of decisions to acquire land, to secure planning permission, etc. How can we, at a more efficient level, forward-plan that beyond individual developments and development applications? Do we need to look at some mechanism whereby, at a local authority level or at a regional, inter-local authority level, there is some mechanism to look five or ten years down the line to ask to what extent the different plans align? I fully understand that different organisations and utilities need to have their strategic view as to which bits of critical infrastructure are required, but are there ways of better forward planning? We talked about SDZs, and a really good example is the Clonburris SDZ, which is a really good master plan involving public and private land and it gets URDF funding. The critical infrastructure is going first and now the planning applications are going afterwards. That is in part possible because there is a landowners' management group, including the public and private sectors, that co-ordinates that. I am not saying it is not without its problems.

Does something like that exist at a local authority level? Should we be looking at some kind of structure, especially for big forward planning? That is my first question.

My second question is related. It is about learning from what works. Ms O'Dwyer mentioned Cherrywood; I mentioned Clonburris. Especially where there are large landholdings with multiple owners, do we need to try to find a nimble mechanism to ensure the same kind of collaborative planning and investment in infrastructure as we use in an strategic development zone, SDZ? Can that be applied in locations that are not SDZs to design out the disadvantage for the first landowners? Is there something similar? We will be looking at the planning Bill when it comes back in the autumn. We have other legislation around land value sharing and so on. Is there something we should consider?

My third question is connected. It is a small technical question. ESB Networks talks about 33 connections. Irish Water talks about 25 connections. Do Irish Water or ESB Networks know why there is a difference? For example, is it because some households that have ESB Networks connections are not connected to the public water system as they are connected to group water schemes or is there some delay between them? It is quite a big difference and the number of water connections is closer to the completion certificate data from the National Building Control and Market Surveillance Office last year, which was 23,000.

We hear a lot about delays because they come into the public domain. It does not mean they are large in number. If there are data on the number of connection applications that are delayed beyond the companies' timelines, the committee would like to hear about it now or later. In the few delays I have dealt with in my constituency, I have long argued that a protocol should be in place. Where there is a dispute between a public or private developer and a utility connector, a protocol should kick in. Often the people who are meant to move into the homes are the losers in this, that is either the purchasers or tenants whose allocation is delayed, often due to disputes they are not even aware of. Sometimes these disputes are caused by a third party, for example when there is an issue with a way leave. It is not always a dispute with one or other of the parties who are present. Is there some way to say that when there is a dispute, an agreed procedure will be used by all the players to resolve it? That would include the public who are affected. It would clean the issue up rather than allowing people to retract into silos and defend corporate positions rather than pursue an agreed approach. Will the witnesses let us know if something like that has been developed? I would be interested in hearing about it.

Mr. Conor O'Connell

On better forward planning, an example was given of industrial and commercial lands in south County Dublin. That is a good example of forward planning in that all the infrastructure has been put in place. That is what we need for residential lands as well. There is the concept, which I think is in the national planning framework, NPF, or the regional spatial economic strategy, RSES, of city implementation boards. If we look at where the greatest population increases have taken place in Ireland in the whole, we see an increase of 258,000 people in Dublin city and county and 100,000 people in Cork city and county. The Department of Housing, Local Government and Heritage is looking at the activation and implementation of the concept of a city implementation body where Uisce Éireann, ESB Networks, the local authority, Transport Infrastructure Ireland, TII, the National Transport Authority, NTA and all the main players in the provision of infrastructure are sitting around a table and implementing the plans. The local authority must be central to that because ultimately the local authority, through the democratic process, decides where development will take place, through the zoning process and, therefore, it must be the central focus of those implementation boards in the national planning framework. We would welcome the advancement of that concept.

On the second point about what works for large land holdings, my colleague, Hubert Fitzpatrick, will be familiar with the SDZ process.

On delays with connections, we recently conducted a survey of our members prompted by our last quarterly meeting with Uisce Éireann. We have quarterly meetings with Uisce Éireann in which we raise certain issues. In fairness, Uisce Éireann implemented the self-lay process as a result of some of these meetings. We suggested a concept whereby our members could report delays in the system, bring them to Uisce Éireann and there would be some mechanism to deal with them. They have developer connection services personnel who we liaise with but perhaps that process needs to be looked at again.

Mr. Hubert Fitzpatrick

I will make a further point about better co-ordinated forward planning. We are too short-term in our horizon. We need to look much farther ahead. The census population results published a few weeks ago show how outdated our current projections under the NPF are. We need to be looking ten, 15 or 20 years ahead because that will ultimately determine what key infrastructure is required from Uisce Éireann or ESB Networks. The planning timeframe for delivering such infrastructure is much longer than the short timeframe attached to any development plan. Our view is that a five-year development process is totally inadequate for long-term planning. We must adopt an optimistic view and be a development facilitator as opposed to a development regulator that restricts development. We are dealing with the entire economic growth of the country. If we do not have the services in place, we will not continue to attract foreign direct investment, FDI, or keep the engine of the economy moving. Longer-term planning that looks ahead over a 15-year period is much more appropriate.

Mr. Niall Gleeson

On the planning side, we must remember we are both regulated entities. The regulator needs to be brought into these discussions because there is a fine line between providing strategic infrastructure and subsidising a developer. That is an area in which we could engage more with the regulator to improve the system. Ms O'Dwyer might want to comment on the planning process.

Ms Maria O'Dwyer

We would also welcome an extension to a ten- to 15-year timeframe in the county development plans being looked at because it would give us a better chance of being able to provide the required infrastructure within that time. As I said earlier, we are focused on adapting the master plan approach and trying to look further ahead with respect to the restraints. A lesson we can take away from this is how we can share that information more. It is probably still in the formation stage but it is our intention to bring that more to the development community. Focusing on the 48 settlements - at the end of the day we are constrained, primarily by supply chain availability right now. Where should we go and how can we be certain that we are picking the right areas to drive investment in first? What confidence would we have in ensuring that if we build it they will come? I know we had that discussion earlier and it was stated that usually if we build it they will come. That is one of the challenges we have to get over. We welcome the approach in the water services planning guidelines to promote compact and sequential development so that more sustainable communities can be built. The other key factor, from a water services perspective, is that we are only one party when it comes to decisions around planning. Many other services have to be built. I probably agree that the planning authority is the entity that is best placed to bring us all together.

Coming back to planning reform, one of the requests goes back to the powers or exemptions. We are seeking for them to be broadened out from what they are right now. They are specific in respect of water services, as regards the size of pumping stations and so on. We are also looking for more exemptions for the development community away from small stuff in order to free up planners to be able to focus on what matters most. That is also a critical part of having more people able to look at the forward planning approach.

Mr. Conor O'Connell

I must come back to the point about subsidising developers or development. This is public infrastructure that is paid for by development contribution scheme charges, special contribution scheme charges, VAT and capital gains tax. The level of taxation on new homes is pretty severe.

Mr. Nicholas Tarrant

Anything we can do to increase the timeframe looking ahead around strategic infrastructure would be a good thing. That is stating the obvious. On strategic infrastructure, formal engagement with semi-State companies around a co-ordinated approach for infrastructure development is needed. A joint submission was made to this committee by a number of the semi-State companies on the planning framework.

I will comment on the question about the numbers in the submissions, in particular ours.

The CSO is the agency of record when it comes to new dwellings. That is what they actually measure. It is new dwellings as opposed to connections and, therefore, in our submission we mention connections to the network. It includes the housing schemes for houses and apartments and then the one-off. As we explain in our submission, there are a number of new connections - there is a number of farm connections - within that category.

We signed a memorandum of understanding, MOU, with the CSO in 2018 around the provision of data so that it can use that. It is the main source that they rely on because one has the formality of the meters going in and when they are energised, that is what feeds into the counting of the numbers. Ultimately, they take other sources in terms of generating the annual and quarterly numbers.

Deputy Eoin Ó Broin

My question was not about that debate. That is an argument we will have on another day. It was more that it is interesting that there is a very significant difference in the number of water connections and ESB connections in a given year. It would be interesting for us to know if there is a reason for that difference.

Ms Yvonne Harris

Uisce Éireann estimates that we service 85% of homes in the country. A total of 15% have wells. What we indicate are the number of homes that we have facilitated. When we do the tie-in to the main, we count that as homes we have facilitated. The number of homes is based on the original application by the developer and we do not measure every individual household as the ESB does.

An Cathaoirleach

I thank Deputy Ó Broin. I will take the next slot.

I suppose it is important to note that no house gets built or lived in without these three guys coming together and that is why we want the three of them in the room here. The planning system is the magnet that draws them all together. We zone a lot of land and say that it is suitable for development. The difficulty seems to be in how are we getting the water and power to that site before the construction industry can start its work.

I will leave the regional and national stuff for the moment because it is on a much higher level. When forward planning takes place in a local authority, does it overlay the map with the water network or with the ESB network to help inform some of those decisions. Does that happen in forward planning?

Ms Maria O'Dwyer

From our perspective of water services, we would have a lot of collaboration with the local authority in the plan-making process through a county development plan or a local area plan. We would probably have three different formal engagement stages with them. That is where we would share information, as I said, the detail around the capacity registers. We would share information on capital projects that we are progressing. We would share information on timelines when we expect that capacity to come into fruition. Maybe I will give the committee some figures around that.

An Cathaoirleach

On the forward planning section, before these maps are even presented to councillors there is good engagement with-----

Ms Maria O'Dwyer

Absolutely.

An Cathaoirleach

-----Uisce Éireann to say it has capacity for water in here and it is constrained on wastewater or vice versa. Would that happen with ESB Networks as well?

Mr. Nicholas Tarrant

I cannot comment about the early stage engagement. I am not 100% sure on that. What we tend to do around our development plans for the future is take on board the development plans that have been developed by the local authorities as we develop our programmes and then submit them to the CRU, our regulator, around the projects that we look to get to reinforce and build the network.

We are engaging with the local authorities on many work programmes. Mr. Rossiter might mention an example or two.

Mr. Alan Rossiter

Taking the Clonburris example that was mentioned earlier, there was very early engagement on that development. That is a typical example of developments where there is very early engagement. We get an understanding of the size of the development and the ramp rate, which is very important because all of the capacity is not needed on day one and it is over a five- or a ten-year period.

An Cathaoirleach

That is well after the zoning. We are in preplanning or planning stage.

Mr. Alan Rossiter

What is also available is on our website are our capacity maps. We hold regular informal engagements with the local authorities but the capacity maps enable people to go onto our website - it will be refreshed within the next few weeks - and see where in the country there is capacity and the scale of the capacity both from a demand and a generation perspective because there are two different lens there.

An Cathaoirleach

I suppose capacity is one aspect. It is a matter of getting the network from where the wastewater treatment plant or water supply is to a particular site. I refer to the laying of pipes and cables, etc. In terms of the construction industry, is there difficulty existing at that point then?

Mr. Michael Kelleher

That is one of the issues we have from a viability point of view. If you are a first mover in a location or an area, if there is a lot of infrastructure to be put in to get the development in to the services, all that cost goes against that one development and, therefore, the first-time buyer on new homes first has to pay that. That is part of the problem we see. If we are to have a plan-led development, the infrastructure needs to be coming forward sooner. We understand-----

An Cathaoirleach

I am sorry to interrupt. CRU has recently ruled that the first mover has to pay for the upfront cost.

Mr. Michael Kelleher

Yes.

An Cathaoirleach

Is there a solution, because it involves a high capital outlay to get the pipe to that site to allow the subsidiary connections to be made? Is there a solution to that first mover difficulty?

Ms Yvonne Harris

The first mover has been an issue for the development community since the establishment of Uisce Éireann. I am not sure what happened before the establishment of Uisce Éireann. The developer has had to invest as the first-mover for all this time. What we spent the past two years engaging with the CRU on are options around how we might refund or rebate that first-mover. We had three options put to the regulator. The regulator has made a decision now that the shared quotable rebate is the option that it would like to implement.

An Cathaoirleach

I am sorry; what is that called?

Ms Yvonne Harris

It is called the shared quotable rebate. It means that the developer can be entitled to a rebate within a ten-year period but he or she must still fund upfront. There was an option around reasonable cost reduction that would see the cost of the infrastructure reduced or at least have a rebate in the early days of the payment but the regulator has recommended and proposed the shared quotable rebate which is similar to the electricity model. From a national utility perspective, both models would be the same.

An Cathaoirleach

That would make sense.

Ms Yvonne Harris

However, it means that the developer pays upfront and will not have any rebate for a period beyond the initial payment.

An Cathaoirleach

There were probably legacy ways of doing things in a number of local authorities previously. Now we have brought it all under one standardised arrangement, which is probably the best way. I am conscious that Irish Water inherited a legacy network as well with a lot of non-standard infrastructure. What is the Construction Industry Federation, CIF's response on the CRU decision? I am sure first mover applies to ESB as well. How come it is not an issue for the ESB but it is for Irish Water?

Mr. Michael Kelleher

The ESB has its charges applying across all its members. Whether one is a new connection or they have a charge, they have a broader base from which they take their capital to invest in the future.

An Cathaoirleach

Is it that its standing charges on electricity supplies go back into the network?

Mr. Michael Kelleher

Yes, whereas Irish Water is a new entity. I suppose this is why we believe it should be re-examined because we are imposing all the contributions on the new homeowner and it should be across all the community. If we put infrastructure into the ground that benefits a broader community, that infrastructure is there for 60 years plus and, therefore, it is benefiting the whole community. It needs to be financed in a different way so that we can get to a more equitable situation.

The problem we have is that some of these costs - we have been involved in some of the schemes - make them unviable and, therefore, they cannot come forward. We wonder why we are not bringing forward development. It is because they are not viable because the cost of this big heavy infrastructure is too much for the development to bear and the banks will not fund that kind of situation.

An Cathaoirleach

This is fairly important. The ESB charges customers for its service and people pay for their electricity every week. That allows the ESB to forward plan its investment. Irish Water does not have that facility. It has to wait on each programme for Government to decide how much we will prioritise investment in water, and there are annual budgetary constraints as well.

Mr. Niall Gleeson

It is more down to the regulated model. We are regulated by the CRU. We cannot go in and speculate, and say that there is a piece of land that will be serviced and let us run some pipes up there and connect it because that would be subsidising developers. That is the model we work under.

The developer has to come to us and ask us to service the piece of land. We-----

An Cathaoirleach

And say that he or she is ready for it now, not-----

Mr. Niall Gleeson

Yes and then we give the developer a price to run our pipes to its land. That is the challenge. I sympathise with the CIF-----

Mr. Conor O'Connell

That goes to the very heart of what we are talking about in terms of a predictive model. If we are planning ahead for ten years' time, why is there the fear of stranded assets? Why is there a fear of redundant infrastructure if we are planning ahead for a ten-year period? We know we have a high population growth rate so let us plan for that and forward plan the infrastructure in that context. That is the type of model we would like to see into the future which, as Mr. Gleeson has outlined, is not favoured by the CRU.

An Cathaoirleach

What would the stranded assets be? I do not understand the point.

Mr. Conor O'Connell

As house builders, we have heard it said that if an asset is put in place like a wastewater treatment plant, water mains or some other infrastructure, and a housing development does not take place on the zoned lands, then we have paid a significant amount of money and the asset is now stranded. That is where the issue-----

An Cathaoirleach

That would fall under the zoned lands tax now because it is serviced land.

Deputy Eoin Ó Broin

The train station for Clonburris that was built 15 years ago would fit into that category, strictly speaking.

Mr. Conor O'Connell

On the issue of how we used to pay for that, my colleague Mr. Fitzpatrick would like to comment.

Mr. Hubert Fitzpatrick

What happened in the past, before section 48 contributions, was that the basic cost of making the connection applied. Local authorities supplied the cost of making the connection but following the advent of section 48, there was a very high increase in the connection charge. The charge is determined by the CRU. There is quite a significant built-in cost there now which would not have applied in the past.

An Cathaoirleach

Senator Cummins is next.

Senator John Cummins

I will keep going on that point, if I may. In the past, local authorities would have taken a longer view. They would have said, in reference to a land bank that is zoned, that over the course of the next 15 to 20 years, 1,000 houses would built on it, for example. Over the course of ten years or two life cycles of a development plan, houses would be built and the levies on same would pay for the infrastructure that the council forward funded. The issue that Irish Water has with regard to forward funding is that it does not have the base that the ESB has, for example, in terms of being able to do that. We know the reasons for that but the points made by the industry are valid in terms of taking a view of that. I appreciate that Irish Water is restricted but if the utility was not constrained by the CRU model under which it operates, would an alternative model help in terms of bringing forward the likes of the developments that we are talking about? We are moving to ten-year development plans but at the moment, we are talking about two life-cycles of a development plan. Would Irish Water agree with the view taken by local authorities in the past, that essentially the development land will be developed out?

Mr. Niall Gleeson

It is a very different model now. Local authorities are involved in all of the planning for roads, water and would be liaising with the ESB, so we would not be able to act unilaterally anyway. That said, we can look at the CRU model in the context of first-mover disadvantage, strategic infrastructure investments and the fine line between Irish Water putting in strategic infrastructure and putting in a pipe that facilitates only one developer and could be seen as subsidisation. There is work we could do there that might help.

Senator John Cummins

I have a question for the CIF in that respect. We did have such a model in the form of the local infrastructure housing activation fund, LIHAF, which was introduced for exactly that reason but it did not really work. Why did that not work? Some LIHAF schemes were developed, one of which is in my own county of Waterford at Kilbarry. The Land Development Agency, LDA, is building on the site and there is also private development there. However, there is another LIHAF site in Waterford that was not developed and has no prospect of being developed and that is reflected around the country as well. Why did LIHAF not work?

Mr. Michael Kelleher

LIHAF worked in certain areas where there was a builder or developer who had land and who was able to bring it forward and bring everyone together. The problem is that there might be fractured ownership, with a number of farmers, for example, who would not be in the business. Unfortunately, getting them all to agree to how the land would be developed and the costs associated with it, so that there could be a sharing of the costs of the infrastructure, can prove very difficult. We had some successes but that is why the LIHAF did not succeed all of the time. There could be one landowner who does not want to participate. He or she could be farming, be happy out and not want to know about it and that can block a development.

If land is zoned in an area, it means that the local authority feels that is where development should take place. If that is the case, then the infrastructure should be put in there because if it is put in, the builders will come and build there. They will build there because they can and because that is what they do. The Housing Infrastructure Services Company, HISCo, which was set up as a byproduct, is working very well. It has done projects in Drogheda and on the north side of Cork City. It is starting to open up land because it is taking the longer-term view, like the local authorities did previously. It is different today. We now have plan-led development. We have structures in place but what we have now is too restrictive. If we do not get beyond that and find ways for all of us to collaborate in order to get the infrastructure into the ground ahead of developers applying for planning permission, then we are going to be at this juncture for the next number of years and will not solve the problem.

Senator John Cummins

It is right to reference HISCo and what it is doing because it is a really good example of what can be done. It is essentially a LIHAF model but involves a different way of thinking. Is Mr. Kelleher satisfied that HISCo is working or does he think that now that we have a residential zoned land tax and the land value sharing, an opportunity for LIHAF mark two is there? Is there more of a focusing of the mind now that might not have been there a number of years ago or does Mr. Kelleher think that HISCo can just do its job?

Mr. Michael Kelleher

We believe HISCo can do its job because it is taking the longer term view of how it invests in an area. It does not operate under the restrictions faced by Irish Water or whatever. That is the model that works. Development takes a long time to get through the system and we need to be able to get partnerships that are prepared to take a ten-year view to make it happen. We must remember that there are economic cycles as well. We can get downturns so we must be prepared to take the longer-term view in order to deliver.

Senator John Cummins

My next question is for Irish Water. I have raised this issue previously and I appreciate the answer that comes back, which is that it is a matter for the regulator. I also know that development levies are now parked for a period so the point is not so relevant, but I am interested in greenfield versus brownfield development and how it is treated. Let us take the example of a development in Waterford City. An old nursing home is being converted into residential units. It is a fantastic development and people will be moving into it soon. There was existing water and wastewater infrastructure on the site that served a nursing home, housing the same number of people, if not more, as will be housed in the residential development. However, because the developer applied for planning permission, water and wastewater connection charges automatically applied even though the infrastructure was already there. If we are trying to encourage brownfield development, it seems crazy to penalise a developer who wants to bring forward such an innovative project. We got a resolution on this particular case and the waiving of development fees has obviously parked the matter. However, it is an issue that will arise again at the back end and I would like it to be resolved in the interim. We should take a different view.

The last time I raised this issue, Irish Water said it would not be opposed to waiving connection charges but that it is a matter for the regulator. What dialogue is going on in that respect? If a brownfield site that already has infrastructure in the ground is being treated the same as a greenfield site out on the edge of the city that has no infrastructure in place, then it is not advantageous to develop it.

Ms Yvonne Harris

I thank the Senator. I have seen that as an anomaly and I have experienced customers coming to us and challenging us about it. I do not know if there is engagement with the regulator but it is certainly something we will take away and, at the minimum, begin a discussion. It may require that we would wait until the next review of our model but it is certainly something we can bring into those discussions, similar to the items we are talking about with the CIF. It is an anomaly.

Senator John Cummins

It is absolutely an anomaly but I suppose we have bought ourselves a bit of time now. I would like there to be a concerted effort among all parties in addressing that over the next 12 months. We all want to see those brownfield sites in our cities and town centres developed. There is existing infrastructure. They are not greenfield sites. Account must be made of the fact that there is water and wastewater infrastructure and they are not new developments.

Mr. Niall Gleeson

All I would ask is that other parties would also connect with the CRU and raise this is an issue. If it is just us-----

Senator John Cummins

Yes, and the CIF.

An Cathaoirleach

We are into our third round of questions. I advise witnesses to reiterate if there are areas within the planning process or the procedural processes - and I believe the ESB referred to recruitment from outside of the EEA - or areas the witnesses believe the committee can engage with the relevant Departments on delivery.

Deputy Eoin Ó Broin

I apologise in advance because I must attend the Dáil Chamber for a debate shortly. I am delighted that reference was made to the Housing Infrastructure Services Company, HISCo because they do not get talked about enough. When the full final analysis is done of local infrastructure housing activation fund, LIHAF and the Housing Infrastructure Services Company, HISCo, it would be very good example of how not to do something, and how to do something. Most LIHAF-funded projects have been enormously delayed and some have ended up in legal challenges. I am not saying that the fund has not helped in some individual developments but it was a very poorly designed and poorly implemented scheme. This is a view both of local authorities and private developers, as well as some of us in this committee. It is interesting that HISCo was an initiative of a local authority that recognised, in conversation with developers in Cork county, there was an infrastructure blockage. They came up with a really smart and sensible solution. It is not money for free as there is a commercial return and developer has to pay. It is done in a very smart and nimble way. I do not understand why that very good initiative, which is now on a number of sites across the country, is not somehow mainstream so that HISCo either becomes a much bigger vehicle or there are regional hubs that are supporting infrastructure developments. It would solve a lot of those initial problems.

With regard to the more fundamental point that has been raised about the funding, the problem is that if we get the development contributions and the water connection charges, we either have to move towards direct State subvention of the infrastructure or the site value tax, a proposal that the Green Party supported. There must be some mechanism to do it. Irish Water does not have the revenue today to invest in that infrastructure and, therefore, there would have to be some recognition. I do believe that a HISCo type model could be a really interesting example. I am saying this more with respect to our own recommendations. For example, there could be an arrangement around water infrastructure. Instead of the developer with the first parcel of land having to front up with the capital and then maybe get rebate over ten years, HISCo could finance it and then there would be a commercial return for its investment at the low rate they currently get paid, as other parcels of land are freed up. That could actually work. It is working with roads at the moment and it is working with bridges. It could also work with water infrastructure. Again, HISCo do not do the work; HISCo employs contractors. Where Irish Water has contractors that are registered to provide the quality of work that Irish Water wants, HISCo could use those same contractors. I believe that would be a nimble enough response to it.

The question I want to ask may be a question for Mr. Fitzpatrick. When we look at strategic development zone developments, SDZs, all of the landowners are brought together and there is a collaborative agreement for how the cost or the burden of infrastructure amenity space is fairly shared across the landowners, even when their own bit of land does not actually require the relevant portion of infrastructure.

In the context of the planning Bill or the urban development zone legislation, and going back to Mr. O'Connell's point around the cities or the agglomerations, is there an argument to say that where there are locations in specific areas of particularly long-term strategic importance for residential commercial and amenity, there is a similar mechanism whereby through our planning system landowners are brought together along with utilities to collectively forward plan and forward fund the infrastructure in the same way as an SDZ but without actually having the SDZ? Is there a nimble mechanism that could provide for that? I like the idea of those implementation groups that were talked about but for it to work it must have some kind of concrete purpose rather than just being a talking shop. Will the witnesses talk about the good and the bad practice that their own organisations see, if we wanted to focus on forward planning and implementation stage, including the funding of the infrastructure. I invite them to say more than just a city implementation group for a strategic development zone. From their experience, are there things they believe already work that could be expanded or elaborated on further? If they have the data on delayed connections, either here or to be shared with us at a later stage, that would be great.

Mr. Hubert Fitzpatrick

The SDZ process works very well when there are willing landowners who are all sharing the very same objective. Where one does not have willing landowners, it is very problematic and it gives rise to a lot of delays. I agree with the Deputy that perhaps there is some process to be worked out there, within the planning system, so if there is an willing landowners as part of an overall SDZ strategy one could find a process in planning with regard to the future development of that parcel of the lands. SDZs are great when there are all willing parties in place. There are huge benefits to that but, yes, we should have something within the planning process whereby if there is an unwilling participant within that then the planning process could address it.

Deputy Eoin Ó Broin

There is such a mechanism in the general scheme of the land value sharing and urban development zones Bill where there would be an option for the local authority to compulsorily purchase the land at a discount, which is minus the land value sharing component, where the land is not being developed. That is specifically in the context of UDZs and not dissimilar to the Irish Planning Institute response and the grounds mentioned by the witness who suggested this is something that could be applied beyond that to help activate those bits of land, but that is separate point.

Mr. Nicholas Tarrant

I would like to comment briefly on HISCo from our point of view. We are always engaging with HISCo, and particularly on the Drogheda project. For example, we have an agreement now with them for putting in ducting as part of that project to be able to future-proof the infrastructure for future cabling work that will go in. Hopefully, we will see that model expand as well from that point of view.

Mr. Niall Gleeson

I will ask Ms O'Dwyer to comment on this point.

Ms Maria O'Dwyer

We are also working with HISCo. There are challenges in some of these areas. It is good with HISCo because they are making the decision with the planning authority as to which area we should develop and incentivise. The challenge for us is that without this model how does one pick between all of the different developers and all of the different landowners? How do we actually demonstrate, as an agency of the State, that we are treating all as fairly, no more favourably and no less favourably, then each other? This is where we must come back and say that we need the planning authority to make the decisions here and to prioritise which developments we should invest in as the State, and then to follow through and deliver on it.

Deputy Eoin Ó Broin

I would just add to that and, without overlabouring it, I will use the SDZs an example. Sometimes that key infrastructure is not infrastructure that benefits one landowner or another, but is the main arterial infrastructure that goes through a very large strategic site, which then frees up others. Then it is a matter for those individual developers to take the action. The urban regeneration and development fund, URDF, is being invested in Clonburris. Senator Cummins will have similar experiences in his constituency. It is at that strategic level that there is a significant level of co-ordination. It was less about the SDZ bit and it was more within the SDZ and that land management group. I take Mr. Fitzpatrick's point but it is a very interesting mechanism and is a kind of function once the SDZ is agreed.

He is right that if there is a lot of fragmented land ownership, that will make it more complicated. I apologise, but I must go to the Chamber.

An Cathaoirleach

I thank Deputy Ó Broin. It is just me and Senator Cummins to go.

We are talking about a concept whereby the State or an entity like HISCo supplies the infrastructure to the site. If the argument is then that we should zone much more land, do those things not counter each other? Which land would we decide to prioritise? If professional planners, with input from all the agencies, determine this is enough land at the densities we require and that is where we concentrate the delivery of the services, does that not counter the suggestion we should zone more land?

Mr. Michael Kelleher

If we are forward planning, there is this concept of the tier 2 lands. We are hoping the tier 1 lands will come forward in the first tranche and tier 2 is looking out to maybe ten to 15 years. If there is a blockage in tier 1 lands, the local authorities and the utilities can look to the tier 2 lands to bring it forward, because we have issues whereby-----

An Cathaoirleach

I am sorry, but what blockage would that be? The contiguous growth model is what we should be looking at in our settlements. If Mr. Kelleher has tier 2 he can say it has now become contiguous because this zone was built on.

Mr. Michael Kelleher

I am aware activation measures are being looked at but what we have seen historically is a farmer who wants to stay farming for good reason, namely, it is his business. Therefore, that land, which is the next land to be developed, cannot be developed.

An Cathaoirleach

That then gets dezoned.

Mr. Michael Kelleher

Yes. We then need to move forward and have a pipeline. It also means we can look forward, from the point of view of the utilities, to plan into the future so they know where the growth is going to go, because it is all mapped out.

An Cathaoirleach

Again, I am of the view that if we have so much zoned land out there, it is hard to control where gets developed. It is hard for the infrastructure deliverers to see where development is going to happen. I appreciate the point about ten-year plans and the ability to indicate lands to be developed at the next stage, because that is the capacity utility providers need to know about as well.

Mr. Michael Kelleher

That is where the local authorities and prescribed bodies come in. They have got from the NPF what their growth for the period is. They are deciding where they believe the growth should go, because it is where they want growth to be. They have to call it. That is what has to happen. They must indicate where the growth should be and where the infrastructure should be put first.

Mr. Conor O'Connell

Just to tease that point out a bit more, there are tier 1 serviced lands and tier 2 lands that are capable of being serviced within the lifetime of the plan. There has to be a handbrake mechanism or release mechanism for tier 3 lands that are capable of being serviced if tier 1 and tier 2 lands do not come to fruition or it can be proven they cannot be developed, for whatever reason, within the lifetime of the development plan. Furthermore, our development plans are for six years. That is a tight timeframe in relation to the development process or the timelines for developing lands. If we were to extend the six years to ten years we would automatically have to zone more lands. The tier 3 situation would apply to lands that are capable of being serviced where tiers 1 and 2 are not coming forward for whatever reasons, including land ownership issues, title issues or a farmer who wants to stay farming, which means going through a process that will take some years.

Most Irish settlements, with the exception of Dublin because of the sea, have a radial development mechanism. In many instances we will develop a particular part of the town, but what is wrong with saying we will develop another over here instead? The lands are still capable of being serviced and at the same cost. Admittedly, in Dublin there is a different situation because of the Irish Sea, the port, the airport etc. There must be this release mechanism. There must be a safety valve.

An Cathaoirleach

I am going to skip on to something completely different now. The Uisce Éireann representatives spoke about their planning application process. A person must apply for something and then go for licensing. What is required in the licensing may need the applicant to go back and amend the planning process. What if Uisce Éireann had a design envelope for the planning process? It is something we are looking at for the offshore industry, where the technology may change or an applicant is not exactly sure but works within an design envelope. Is that something the body can do or is it something that would assist in that?

Mr. Niall Gleeson

Our planning is very prescribed, so it does not have that envelope flexibility.

An Cathaoirleach

Most planning is fairly prescribed like that, through the objectives set out in a plan. However, what if Uisce Éireann was able to apply for something and say what it was equivalent to, but that it might have to change some aspects of it depending on the licensing requirements. Would that help or would it make it more complex?

Ms Maria O'Dwyer

The planning process is there for a good reason. It is there to engage the public and all of us in society in the decisions we are making. We welcome full transparency, but we are asking for more of these processes to be done concurrently.

An Cathaoirleach

It is about getting the processes to run in tandem.

Ms Maria O'Dwyer

Absolutely. It would bring more certainty to the process, so that once you enter it you have some degree of certainty as to when you will get a decision out of the process.

An Cathaoirleach

Okay. I move to ESB Networks. The representatives gave figures for costs for connection fees. I think it was said the customer pays 50% and the ESB supplies the rest. I am estimating the cost of supply to one-off rural houses is slightly over €6,000 if we include the 50% and the scheme house is around €2,000. Is that right? It is about a 3:1 extra cost for a one-off rural house versus a scheme house.

Mr. Alan Rossiter

Yes, it is around that.

Mr. Nicholas Tarrant

There is more detail in our statement of charges, which is published. It varies. The example we gave of €1,038 was where we have got 20 homes in a development. There is a scale that is set out in our statement of charges around those costs.

An Cathaoirleach

That is fine. Following on from Senator Cummins's point about the connection costs on brownfield sites, with the supply of infrastructure we can get more out of it by higher density infill development and compact growth than with the continuous sprawl, because the ESB is not expanding the network out. Is that something it takes into consideration? Compact growth is one of the objectives of the national planning framework. Does the ESB feed that into the national planning framework as a submission stating we can get much more out of our assets and deliver more with higher compact growth. We can forget the climate aspect of it and look only at getting the best value out of the structure we have already paid for.

Mr. Alan Rossiter

We are engaged in an early-stage review of the impact of the housing density. That is at a very early stage, but we are feeding into that in terms of the design possibilities, opportunities, costings etc. We are working closely with that.

An Cathaoirleach

With compact growth, the ESB would be upgrading an existing network infrastructure rather than having to go further with new greenfield infrastructure.

Mr. Nicholas Tarrant

Again, in the context of growth for the electricity network, there are multiple factors involved. There is housing, growth for business and the area of electrification of transport, for example. We are looking at all those things together when working on our future plans. They are some of the main factors. I do not think it has specifically come up with individual local authorities, with Dublin being an example. We are seeing a growth in apartments, so the density is getting higher from that point of view, but we are not necessarily directing the local authorities to say there is more opportunity with more density. That is being led, maybe, through the planning process where we see the apartments or houses coming through and then coming to us for connections and we have to connect them.

An Cathaoirleach

I will come back to the infrastructure in a moment. We have seen energy efficiencies introduced in houses over the last five, ten, 15 years. There are A-rated appliances, LED lighting and so on. Added to that we are going have electric vehicle chargers and heat pumps. When it comes to how the ESB rates what needs to go to a house now, are we looking at a 20% increase in capacity to each house now? How is that balancing out or how does the ESB approximate that?

Mr. Nicholas Tarrant

We mentioned in our submission that in 2019, we changed the specification for new housing and increased it by 120% with a view to those new houses having new requirements in the very areas the Cathaoirleach mentions around electrification.

As new houses are being added to the network, we are bearing that in mind around the electrification of heat and transport, and that is part of our plans for growth for the future.

An Cathaoirleach

Okay, so that is the supply cables in, the fuse boards and all of that.

Mr. Nicholas Tarrant

It is particularly the size of transformers and substations feeding the housing developments.

An Cathaoirleach

That is about 20%.

Mr. Nicholas Tarrant

120%.

An Cathaoirleach

120%, okay. I thank Mr. Tarrant. I had a last question on feeding into the national planning framework on density and compact growth.

Mr. Niall Gleeson

Ms O'Dwyer will take that.

Ms Maria O'Dwyer

Again, we would probably follow the water services planning guidelines, which are supporting compact development where possible. In line with the CRU, through the development of our connection charging model, a key principle of that was to maximise the use of our existing assets. We would very much support that. Further in that model, where network extensions are being built or funded by developers, a key part of that model as well would be that we have the ability to upsize some of those assets. That is where we can actually fund that and put it on our capital investment plan. That goes back to supporting long-term planning, but the difference in that case is that a developer is leading the initiative to build, so there is certainty around it being a good place to build and put the investment.

On brownfield and greenfield, it depends. A brownfield site has that capacity being utilised somewhere else in the vicinity. Is it still available, or has it been utilised by one of the neighbouring properties, depending on what has happened there? If the site had been recently active and the capacity is still there, we are able to recognise the recent benefits of that in terms of processing the new site details.

An Cathaoirleach

Would we be able to look at, say, the infrastructure investment and commissioning of various parts of the infrastructure of both the electric and water networks as a good indicator to see if we are meeting the national planning framework balanced development targets? Are they indicators that could be used?

Ms Maria O'Dwyer

We would probably say that our investment plan is very much designed to support the regional spatial and economic strategies. We are very conscious of those spatial targets that are set. We have talked a lot about the network here today, but that is what is driving a lot of our investment in our treatment plants and pumping stations, and our upgrades to be able to facilitate that. The best metric I could probably give the committee is those capacity registers, where we are able to see where we have capacity and where we do not. Then, we are working to address gaps in that.

An Cathaoirleach

Sorry, I will let Senator Cummins in now. The national planning framework obviously sets out targets on how the country should grow, and how we should get the balance right, as well as compact growth, decarbonisation etc. Apart from housing numbers, could we use as indicators the investment that has gone into the network, and where capacity has reduced in areas? If one has the capacity and it has reduced, it is because there is more load or demand coming. The same goes for the ESB. Would its network load give us an indication of development in areas?

Ms Maria O'Dwyer

It would give us an indication. However, there are some other factors there. We have some large industries that are connected to some of those agglomerations. Some of them actually have the right to discharge at higher levels than they are currently doing. All things being equal, if they were to stay the same, I think the answer to the Chair's question would be "yes".

An Cathaoirleach

Is that similar for the ESB?

Mr. Nicholas Tarrant

Yes, I think so. There are other factors involved in our network development, including for example, the growth of renewables. One can look at our growth in the context of that integrated view of supporting the economy and jobs with industry and housing, the electrification journey that we have talked about, and the growth of renewables. We have the data available, so we are happy to engage if there is anything we can help around understanding that data and the load pattern across the country.

An Cathaoirleach

I thank Mr. Tarrant. Senator Cummins, I am sorry for that.

Senator John Cummins

No, you are fine, Chair. Not to labour the point from the last round, but contrary to what the witnesses have said about reduced capacity, if something is being re-established for the existing purpose - regardless of whether all of the used capacity has been used in the system - they do not require the payment of connection charges. They can restart. If one took the nursing home, for example, that capacity might have been taken up, but because it did not need to go for planning as it was not a change of use, they have no charges that would apply in that respect, notwithstanding capacity constraints.

Ms Maria O'Dwyer

I am not familiar with the specifics of the case.

Senator John Cummins

It does not matter about specifics, just in general. Let us take as an example a nursing home in the midlands that was not operating as a nursing home for five years, but tomorrow is going to be re-established as a nursing home. It has the existing infrastructure, but in the meantime, if all of the capacity in that area had been taken up, they could still open.

Ms Maria O'Dwyer

It is easier to consider here in the context of an industrial site, I suppose. If the capacity was gone, we would be probably breaching our environmental regulations. That is if we did not have capacity. I know if it is one nursing home and a small house, it is a different matter.

Senator John Cummins

Sure.

Ms Maria O'Dwyer

We would have to have the capacity. We would have to technically be able to deliver the service to offer the connection.

Senator John Cummins

Would they not be required to ask Uisce Éireann?

Ms Maria O'Dwyer

If it is the same property, and there is no change of use, they are not required to ask us.

Senator John Cummins

Yes, which kind of goes back to the point. It might be worth our while as a committee to engage with the CRU on the brownfield-greenfield question. I think it is important that when the levies are back in place - or maybe not - that if we are not incentivising brownfield development, we would not disincentivise it. That would be useful.

Mr. Niall Gleeson

Again, it is not our decision. We have to go. We understand the frustration though.

Senator John Cummins

Absolutely, and I prefaced what I said by saying that.

Regarding the existing levy waiver that is in place, my understanding of the circular is that the developer still has to pay a new refund. Am I reading that?

Ms Yvonne Harris

Senator Cummins is correct.

Senator John Cummins

Then Uisce Éireann recoups-----

Ms Yvonne Harris

We recoup from the Department. The reason we ask the developer to pay upfront goes back to our earlier discussion around pre-connection inquiries and connection applications. The connection application and the commercial commitment from the developer tells Uisce Éireann that the developer is going to start development on that site, and that we should reserve capacity for the development, because the developer has commercially committed to the start of the site. If we do not look for the payment upfront, we could have multiple developers coming to us and telling us they are going to start on a site, and we have no indicator as to which developer is going to move forward with it.

Senator John Cummins

They have to issue a commencement notice.

Ms Yvonne Harris

That is when they have actually started, but what we want to do is engage early. We want the developer to engage early with us. We want to hold the capacity. We as a team want to say that this developer is going to build 100 houses, and we now need to reserve capacity. That process typically starts way ahead of the actual commencement on site.

Senator John Cummins

I have engaged with some of the members of the CIF, and I know it is not a big issue for the bigger players in this, but is it not a cash flow issue for some of its smaller members? There is that piece. Uisce Éireann is being recouped by the Department for it. Could that be frontloaded? Is there an engagement at Department level? The way I see it, there is a cash flow issue for the smaller developer who is bringing forward a development. They might have had €150,000 or €200,000 that they could use as cash flow to bring forward another 20 or 30 units, but now they cannot because they are paying upfront, notwithstanding that they are going to get it back because they have to borrow for that.

Ms Yvonne Harris

Absolutely. What I would say to the Senator is that we are working on our process for refunding at the moment, and it will be as efficient as Uisce Éireann can make it. We would have a difficulty if the developer does not pay us upfront, because essentially, we have no committed customer. It comes back to the reservation of the capacity. We cannot reserve capacity, and if a developer comes along and says to us that they are about to commence on the site next week, we will not have reserved the capacity for that developer. A positive pre-connection inquiry that we gave the developer in the past may not become an actual connection offer.

If the developer leaves it so late that it comes to us when it starts commencement, we could not then stand over the fact that we have capacity. The process of payment upfront is about the developer requesting that we reserve capacity and Uisce Éireann reserving that capacity for that developer. It means that if somebody else then comes up with a commencement order and applies to Uisce Éireann for that same capacity, if there is not capacity because of developer B, we have said we have the commitment from developer A. Other than that we would be in a very difficult position. It comes back to the equity challenge and the timing-----

Senator John Cummins

That final offer has to happen prior to the developer pressing the commencement notice. Would the witnesses like to comment on that? It is an issue that has been brought to me. I am just trying to see if there is a way to overcome it whereby we can reserve the capacity in line with the commencement notice and Uisce Éireann can be paid by the Department rather than going from one and then going back and getting it from the other side.

Mr. Michael Kelleher

It is an issue for our members around the country. They still have to put a bond in place. There is a bond in place for the infrastructure. Obviously we have to engage with Irish Water field engineers as we are just about to commence on site. We are showing commitment. If we have paid the bond, which we would be doing, there must be some way around it. It is a cash flow issue and it is something that is coming up for our smaller members. If that could be looked at, it might be of benefit. I appreciate that it can be put through the process quickly but we must still bank that amount of money for a period of time and that can be difficult. If the bond is in place and if they are moving on site, there must be some mechanism of ensuring the development is actually proceeding.

Senator John Cummins

Is the bond not sufficient? The developer is showing the commitment to commence. It is not just a follow-on or hypothetical from the pre-connection agreement. They are showing a commitment that they will be starting within a four-week period. It is not something that could potentially happen in seven months' time. It is something that is happening.

Mr. Niall Gleeson

The whole idea of the refund system is so we do not have capacity hoarding, which would disadvantage other developers. If we did not have money down, we would be concerned that somebody could come in and say they want that capacity but may not use it. The fact that there is money down means we know the developer's intent and we know it is committed to that process. The best thing might be to take it away and talk to the CIF to see if there is any better mechanism. This is the way it has been stipulated by the Department and the Government so I am not sure how much wriggle room we have there.

Senator John Cummins

I appreciate that but there is merit in investigating the streamlining of it. Account should also be taken of the fact that this is a time-limited waiver. I take the point that people would essentially be banking capacity. That is not something anyone could stand over. I think there is capacity in terms of engagement between the Department, Uisce Éireann and CIF. Perhaps that can be taken away offline. Reference was made to headroom, capacity and zoning. It has been reported that homes were refused in the Cathaoirleach's constituency, in Greystones, because, essentially, it was said that there can be no planning on a greenfield site until after the next development plan. That is what it would seem based on that decision. I ask the witnesses to comment on what they see as the way forward out of that scenario.

Mr. Conor O'Connell

I will not talk about any specific site, town or area but to give an example, we conducted our own analysis on some of the aspects and implications of the national planning framework and the tight zoning regulatory process. We published a report with KPMG Future Analytics with a review of the population and housing needs for counties Wicklow and Kildare. I will use the example of Kildare. With regard to the average household size, there is divergence between the national planning framework figures and the actual population growth that is taking place. In 2021, there could be between 290,843 persons and 263,677 persons. That is the level of divergence between the national planning framework and the actual population growth that is taking place in Kildare. Obviously that has implications for the housing need and demand. The draft Kildare county development plan 2023-28 sets a housing supply target of 9,144 homes. It is a significant divergence from what is actually happening-----

Senator John Cummins

What has happened.

Mr. Conor O'Connell

Yes, what has happened. If that is built in to the local area plans, which may have settlement caps for particular areas, it is a very significant issue.

Senator John Cummins

What is the way out of it?

Mr. Conor O'Connell

The way out of it is through the headroom process and through a review of the national planning framework that recognises where growth is taking place, which would obviously help Uisce Éireann and the ESB. We need a review of the national planning framework and a review of these development plans to take account of the actual population growth that is taking place.

An Cathaoirleach

It would also have to take into account travel patterns associated with previous growth patterns, and how they impact on emissions and our climate action plan. Just because growth is happening does not necessarily mean it is in the right place. That would be my planning perspective.

Mr. Conor O'Connell

I know. We are living in a post-Covid environment as well where some of the commuting patterns have changed and will be permanently changed. Thankfully the Department of Housing, Local Government and Heritage is going to put out the compact growth guidelines to allow, we hope, for more own-door high-density developments rather than just apartment developments, which are more difficult to finance. That will help as well but fundamentally, the level of divergence between what we are planning for and what is actually happening is so severe that it is causing this constriction in housing supply and our planning for housing supply.

An Cathaoirleach

I have one last question for the ESB. The replacement of cables within the greater Dublin area will be done by the ESB and not EirGrid. Is that right?

Mr. Nicholas Tarrant

It is the same difference.

An Cathaoirleach

That is quite a large infrastructure project. Is there opportunity for other infrastructure providers to be part of it? It is quite significant to replace those cables. Is it just something the ESB would be doing purely concentrating on cables?

Mr. Nicholas Tarrant

I will explain briefly the two roles between ourselves and EirGrid. For the transmission projects, EirGrid brings forwards the projects and once they are consented they are passed to us for detailed design, procurement and construction. Ultimately, we own them over their life for onshore assets. In the case of distribution, we look after the whole lot. The cable replacement programme in Dublin is a key enabler for bringing offshore wind onshore for example. There is going to be increased capacity in those projects based on this. We are using opportunities to engage with key stakeholders. For example, there is a working group with TII on high voltage, HV, cables and how we use roadways. That goes beyond the Dublin region but in general, it is about how we can use existing infrastructure for network development. We have a programme that is going to go over multiple price reviews. What we have seen with the engagement is where we have taken opportunities of working with the local authorities on various programmes. One example is the Dodder greenway or different things where there are other infrastructure projects happening that can be piggybacked on. In Dublin, there is something in the region of 140 km of those cables to be replaced over a 15-year period.

Mr. Conor O'Connell

I would just like to make a closing point on the move away from a demand-led model, which in our opinion is there at the moment, to a predictive model.

We are looking at a situation where hopefully, the war in Ukraine ends sooner rather than later but that is probably going to require one of the most significant reconstruction projects in Europe. There is going to be a need for everyone involved in infrastructure to forward-plan for the eventuality of severe issues, as predicted by some, around the supply of certain materials, including transformers, mini pillar boxes, steel etc. We all need to look at future supply chains and how to secure those.

An Cathaoirleach

I thank Uisce Éireann, CIF and ESB Networks for their time today. It is very helpful for us. I have taken quite a few notes, as other members have too. There are a couple of issues we can engage with various Departments or organisations on to try to move them along.

The joint committee adjourned at 5.51 p.m. until 9.30 a.m. on Thursday, 15 June 2023.