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Joint Committee on Housing, Planning and Local Government debate -
Wednesday, 25 Apr 2018

Water Supply Project: Discussion

No. 6 on the agenda is consideration of the water supply project, eastern and midland region. I would like to welcome to our second session today Ms Emma Kennedy of Kennedy Analysis; from Irish Water Mr. Jerry Grant, Ms Angela Ryan and Ms Claire Coleman; and from Ervia Mr. Mike Quinn.

Before we begin I wish to draw the attention of members and witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009 witnesses are protected by absolute privilege in respect of the evidence they give to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him or her identifiable.

Members are reminded that under the long-standing parliamentary practice 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.

Senator Gabrielle McFadden is substituting for Senator Martin Conway and Deputy Mick Barry is substituting for Deputy Ruth Coppinger for this session.

I call on Ms Kennedy to make her opening statement.

Ms Emma Kennedy

Dublin’s residents and businesses are facing huge problems with their water supply and those problems need addressing now. The problem is not a lack of water; only around 43% of the water put into Dublin’s water supply system each day is actually used. Dublin’s problems are: excessive leakage; water outages, Dublin’s pipes being so old and fragile that when they come under an extra stress such as during a cold snap, they give way, leaving Dubliners without water; unreliable water quality, where in low-pressure situations contaminated groundwater can leak back into the pipes carrying clean water to Dubliners’ taps, which Irish Water calls a public health risk and which it has to offset through extra chlorination; and lack of diversification, Dublin currently getting 99% of its water from rivers, leaving Dublin vulnerable.

There is a perception that pumping water from the Shannon to Dublin would fix Dublin’s problems. That perception is wrong. The Shannon would offer no diversification away from river water, and the only thing that can stop Dublin having water outages and suffering from water ingress is replacing its pipes.

Irish Water’s mains replacement target is just 1% per annum, meaning some of Dublin’s pipes - which are up to 140 years old - will not be touched for another 100 years. One per cent per annum might be viable for the maintenance of an efficient water supply system, such as those in Paris and Frankfurt, where leakage is around 7%, but it is not viable for Dublin. Dublin’s water mains do not need maintenance; they need a major overhaul, and this will soon become unavoidable, regardless of whether or not the Shannon project proceeds.

Over the past two years Kennedy Analysis has produced two separate but related sets of reports. The first set focuses on Dublin’s water pipes. For years, a key weakness of Dublin’s water supply system was its water treatment plants. Many here present will be familiar with hearing that the treatment plant at Vartry has not been able to cope with an algal bloom. It is important to be clear that Dublin’s various water crises were not caused by shortages of raw water, but rather by infrastructure issues that impaired its ability to treat and deliver that water. Happily, every major treatment plant serving Dublin has either been upgraded in the last five years or, in the case of Vartry, is about to be upgraded. Dublin’s water pipes on the other hand remain in a third world state of decay, and this is now the key issue undermining Dublin’s water supply.

The other set of analysis focuses specifically on the Shannon project. We have reviewed thousands of pages of reports going back through the 22-year life of this project. Four of those reports made projections of the growth in Dublin’s water demand. The earlier reports are now known to have contained errors and to have overestimated the growth in Dublin's demand. One report overestimated the growth in Dublin’s water demand by over 470%. The latest set of analysis is no different. It contained three key errors which, once corrected, established that there is no need for a project of the scale of the Shannon pipeline. Full details of each of these are provided in the bundle that I believe members have in front of them, but the following is a brief explanation of these.

The first error related to the data that were used for industrial demand or non-domestic demand. The intensity of industrial water demand in Ireland has been on a downward trend since 1995, the year before this project began. It has been stated repeatedly that the data used in the analysis for the Shannon project took account of that decline. However, the data that were actually used took no account of that decline and were produced using an outdated method that is not considered international best practice and of which Irish Water’s own independent economic adviser has been highly critical. This has a significant impact on the bottom line.

The second error related to the data that were used for what is known as "customer-side leakage", which relates to leaks from inside people’s homes and under their gardens. The analysis for the Shannon project stated that, in 2011, total customer-side leakage was 41 million l per day. However, the recent first-fix scheme has proven that this cannot have been right. The scheme has so far identified 35,000 major customer-side leaks in the water supply area. To date, only 40% of those have been fixed but over 38 million l per day of water has already been recovered. Given that 38 million l per day was being lost through just 40% of those leaks, it is clearly impossible that the total volume of leakage was only 41 million l per day in the first place. To state that again: 38 units is what they have saved and 41 units is what they assumed was being lost in the first place. Our analysis extrapolates that once the hundreds of thousands of smaller leaks are also accounted for - along with leaks in homes without functioning water meters - the correct figure must almost certainly have been at least 100 million l per day. This has a major impact on the bottom line because, even assuming nothing more than Irish Water’s current leakage targets, an additional 59 million l per day of water will become available at Dubliners’ taps by 2050 instead of being poured into the ground.

The third error related to double-counting. The analysis for the Shannon project is a supply-demand equation. It calculates the amount of water that will be available for supply each day on the one hand and the anticipated daily water demand on the other to determine whether there will be a surplus or a deficit in 2050. However, in its treatment of outages in particular, the calculations for the Shannon project added in provisions to the demand side while simultaneously deducting provisions for exactly the same thing from the supply side. This is double-counting and mathematically invalid.

Once the errors in Irish Water’s analysis have been corrected, it is clear that the Shannon project is mathematically unnecessary. A smaller and less expensive non-river water solution would secure Dublin’s water supply and provide it with much-needed diversification away from river water. This assumes nothing more than Irish Water’s current leakage targets. It uses Irish Water’s data for all other inputs - for example, population growth - and assumes that no more water will be extracted from Dublin’s existing water sources than is assumed in Irish Water’s own analysis. If, instead of its existing targets, Irish Water was to adopt ambitious mains replacement targets, which are long overdue for Dublin in any event, then the case for the Shannon project would be undermined yet further.

It is vital that major projects such as the Shannon pipeline are subjected to rigorous analysis. Spending €1.3 billion on a project that is not needed means that €1.3 billion is not available for projects that are needed, such as replacing pipes in Dublin. The numbers for the Shannon pipeline do not add up - there is no investment case - so it is vital from the taxpayer’s point of view that it does not proceed. At the same time, the risks to which Dublin’s residents and businesses are currently exposed because of its ancient water pipes and almost total reliance on river water must be addressed. Irish Water’s 1% mains replacement target must be challenged and there should be a fresh review of non-river water supply options in the context of correct demand figures.

One final point to note is that Kennedy Analysis found that the consideration that was given to groundwater, or wells, as an alternative water supply option for Dublin was seriously flawed. We provided the committee with a summary of that in advance of today’s meeting. I am very happy to take questions about that or, indeed, about anything else.

I thank Ms Kennedy and call on Mr. Grant to make his opening statement.

Mr. Jerry Grant

Mr. Quinn of Ervia will give a high-level overview on the economic and planning context and the policy context, and we will then go into some of the detail around demand and so on.

Mr. Mike Quinn

Good morning. My name is Mike Quinn and I am the group chief executive of Ervia, which is the parent company of the two regulated companies, Irish Water and Gas Networks Ireland. I am joined by Mr. Grant, managing director, Ms Claire Coleman and Ms Angela Ryan from Irish Water to discuss the water supply project for the east and midlands regions. I would like to thank the Chairman and the joint committee for the opportunity to present the details and status of the water supply project.

The recent Storm Emma event underlined that water supply to the greater Dublin area is critical, with 400,000 people losing supply for periods over two weeks because of increased demand. The situation is unacceptable and is due to the lack of margin of supply over demand in the region. Irish Water's central message is that unless we resolve that situation, these failures will occur more frequently and with greater severity. The impact of such failures will undermine confidence in the service, cause extensive social and economic loss and, ultimately, affect jobs now and in the future. Basically, the water system would become a constraint on economic growth.

After the latest - the fourth - round of public consultation, Irish Water has reviewed the water supply project in detail and considered all of the feedback. Irish Water is now confirming that the planned new water supply from the River Shannon at Parteen is the best way to meet the critical deficit in the east and midlands regions of Ireland from 2025.

Turning to the slides we have provided, the second slide details the policy framework. We are guided by national policy, which is brought up to date in the national planning framework and the new river basin management plan. Irish Water supports national policy through its water services strategic plan 2015 and the national water resources plan to be published in 2018. Irish Water has a statutory responsibility to develop its plans and programmes to ensure that present and future needs can be provided for in a secure manner.

The third slide shows the population growth to 2050. Working from the 2016 census data, it is estimated there will be an extra 600,000 of population in the greater Dublin area and a further increase of 120,000 of population in the midlands region.

The fourth slide shows today's water availability in the greater Dublin area. We can produce 598 million l per day of water safely against an average daily demand of 579 million l per day. This is a wholly inadequate margin which cannot deal with the risks to supply of demand. In any other water company, this would be considered an emergency situation. Indeed, Irish Water monitors the greater Dublin area demand balance, including the region's reservoirs, as a first priority every day for this reason. It is our single biggest risk.

The fifth slide shows the immediate projects we are trying to implement in order to maximise existing sources. We are improving our network capacity and upgrading our plants at Vartry and Srowland to be able to produce about 10% more water. This will give a maximum of 656 million l per day, which is the limit that will be available until the water services project can be built and put into service. This, plus leakage savings, will barely meet the growth over the next seven to eight years, so the contingency will remain highly marginal.

The sixth slide shows the dependence on the River Liffey. We depend on the Liffey for 85% of our daily needs and this is based on 41% of the average Liffey flow, which is extraordinarily high. This is absolutely the limit of what is available, both technically and legally.

The seventh slide shows that demand is growing and has outstripped supply. The graphic shows the steady rise in the average daily demand in the greater Dublin area. Normal demand reached 577 Ml per day in quarter 1 of 2018, up from 540 Ml per day in 2014. However, as members can see, the effect of Storm Emma took the demand to 636 Ml per day, which is more than we can produce. As a result, we had to restrict supply, causing loss of water to almost 400,000 people at peak. This failure is unacceptable and causes major hardship and loss to communities and businesses. Without the water services project, this will happen with greater frequency and severity if nothing is done to provide a new source.

Mr. Grant will outline the challenge of leakage and the basis for our future demand estimates.

Mr. Jerry Grant

In terms of the detailed planning that underpins the figures, in the past there have been four major public consultations and many different reports have been issued. We have endeavoured to clarify and, indeed, refine from time to time the basis of demand and the basis of our plans, with a view to providing maximum clarity as we prepare to submit this project for planning permission. This also takes advantage of additional data that were available from the feedback and, of course, the planning policy - for example, the national planning framework - as well as census 2016, which underpins the population data in the catchment.

When we compute the domestic demand and the non-domestic demand to the most accurate figures available, we estimate that the network system across the greater Dublin area suffers a typical daily leakage of 207 million l, which is 36% of the water provided. That compares with about 45% or 46% nationally. We have much higher percentage leakages in places like Cork city, parts of County Cork, Roscommon and so on. In the past several years we have been doing a lot of work to get our 750 district meter areas, DMAs, up to scratch. That includes getting them recommissioned, because many of them had fallen in to disrepair, as well as renewing the meters, tying them into the national telemetry system and so on. As members will know, we have installed about 58% of domestic meters nationally, although in the greater Dublin area that figure is a little lower, at about 45%, taking account of apartments and other constraints. We have installed a good deal of pressure management, probably nearly to the maximum limit. Clearly there is a point where pressure control begins to impact on basic customer service, especially in a city with apartment buildings and tall three-storey buildings. Pressure management has given us some dividend. Our local authorities have been endeavouring to carry out find-and-fix repairs across the system as much as they possibly can.

We are now about to launch a programme of work which we call our active leakage control programme. It will run for the next five years up to 2021 and will then be renewed in each successive period thereafter. This mirrors the best-practice approach that has been used right across the United Kingdom, including England, Wales, Scotland and indeed Northern Ireland, to produce leakage figures that are somewhat lower, but which also reflect the difficulty and the period over which those systems have evolved. Those systems are largely comparable to ours. They are a mixture of cast iron from the Victorian era, polyvinyl chloride, PVC, asbestos and more recently medium-density polyethylene, MDPE. The age characteristics and the water characteristics, which give rise to the corrosiveness of metal pipes, are somewhat similar.

The map on the ninth slide shows the typical layout of pipes in unplanned city streets with a multiplicity of services. That is the reality of what we are dealing with. The replacement of pipes across 9,000 km of network has to be very carefully targeted and planned. Replacement of many of these pipes would be subject to constraints arising from working hours, during which access to business and delivery of goods would have to be managed. Moreover, work could not take place for the whole of December because of shopping in the lead-up to Christmas, and so on. There are many constraints, not to mention traffic and the impact on communities. Underlying that is the impact on water users, who would be out of service for long periods. We have 650,000 individual connections that we are aware of, and we know from the work we are doing in Galway, Dublin and elsewhere that we will only find out about at least 10% of the connections when we go about the work. It is an immensely complicated job of work. There are leakages in the bulk system, the transmission and the reservoirs. There are also leaks and bursts within the pipe network. A significant amount of leakage is what I call background seepage, that is, seepage at joints, much of which will never be found, economically or technically.

The tenth slide shows a typical excavation in the city streets. This is largely what we have to deal with. A multiplicity of services overlay one another in an unplanned way. We cannot replace pipes without interfering with the communications infrastructure, the gas infrastructure and indeed with the sewer connections, all of which crisscross one another, as we saw during the Luas project. It is important to understand that for us, as in Britain, recovery of leakage through pipe replacement is at least ten times as costly as recovery of leakage through find-and-fix. The technical and economic cases for pipe replacement are based on regular failure and customer service. The case for leakage control is based on finding and fixing the leaks while trying to stay ahead of the rate at which new leaks are forming. We have looked at London, which has been referenced. It took 14 years of sustained investment to get London's leakage rate down from 946 million l to 760 million l. The city's leakage programme replaced 260 km out of 19,000 km. The highest replacement rate they ever achieved in one year was 1.3%. Thames Water has pulled back from that approach, because the firm discovered that it was getting very poor value for mains replacement. It hit 80% of the leakage target that it expected to meet through the mains replacement programme, at enormous cost. London is now reverting to a strategy based on rolling out more domestic metering, beefing up district meters and going back to the hard grind of find-and-fix, with pipe replacement following, as I have said, for those pipes that are in difficulty.

The graph on the twelfth slide shows the effect of winter year in, year out. This shows that there is a continuing battle to deal with new leaks. For example, Storm Emma has put at least 15 million l a day of additional leakage into our system, which we now have to recover. That sort of thing will happen every year. Something will happen every year that causes additional leakages, not to mention the day-to-day increase in leakage in the system. All of that has to be dealt with before leakage can be driven down. There is absolutely no point in addressing this with a short burst of activity and expecting that to do some good, because it will not. Any gains will be lost in no time.

The next slide shows the component parts to our leakage management system. I will not go into huge detail, but obviously information is the first requirement. For planning purposes, we use good data on the network that comes from the system and a leakage management system that will predict leakage in every DMA across the country on a daily and weekly basis when we commission it in the next couple of months. It is critically important that the district meter areas are working. They are used for step-testing, district testing and water balancing on a local level. As well as the domestic meters, the renewal of the non-domestic meters which we are currently rolling out will greatly improve the accuracy of our measurement of non-domestic usage. Then there is the find-and-fix programme. As I said, in the greater Dublin area that would require something like 6,000, 7,000 or even 8,000 individual holes to be dug in a year. On top of that, we are replacing 20 to 30 km of pipe at the moment. That will increase as we identify the pipe that should be relaced as a matter of priority. We can be absolutely certain that a replacement rate of 1% would be the maximum we could achieve without bringing the city to a standstill.

The graph on the fourteenth slide shows the journey to bring leakage down over the next number of years from the current daily figure of about 207 million l to a figure of 140 million l as a target for 2051. That will involve fixing a volume of leakage three or four times the amount of the ultimate reduction, because of the continually rising leakage pressure in the network. Taking these considerations together, the fifteenth shows a profile of the situation that is facing the greater Dublin area between now and 2025. If growth in water demand is contained to 2%, we will survive until 2025 without the water supply project, WSP, but without any contingency for emergencies of the kind we have had. That means we will still have the same problem with weather events, whether it is a drought or a freeze. If our growth in water demand exceeds 2% in period, we will run out of water sooner. That is the bottom line. Over the past four years, underlying growth in water demand in the greater Dublin area was 1.9%. That is how tight the situation is at present.

The sixteenth slide shows the benefitting corridor within the eastern and midlands region. This area has compelling demand shortages at the moment. That includes the Mullingar regional scheme, which covers a huge area of county Westmeath apart from Mullingar town. We face major problems in extending the greater Dublin area supply to Ashbourne and Ratoath. There are also problems in extending it to the Baltinglass area of Wicklow, where we have not been able to find an alternative meaningful source, and to Rathdrum and Aughrim, where very poor supplies are hanging on by a thread. Those areas should really be supplied from the Vartry system, and will be with the plans we have in place.

The charts show the picture from now until 2025. The seventeenth slide shows the increase in domestic and non-domestic demand that we anticipate. This is all in the context of significant social and economic progress in the region, reflected in housing growth and jobs growth. This will require a very significant and sustainable reduction in leakage, which will have to be ongoing nearly 365 days a year, not just for ten or 100 days of the year. We are factoring in the fundamental measures that every water utility worth its salt incorporates in its system, namely, a peaking factor that deals with seasonal variations and resilience against events that happen in every water system, like a pollution event or a drought. Events of that kind will ensure that we have less water in Poulaphouca than we need. We know from statistics that the current rate of demand from the Liffey would mean four failures in the past 62 years. At the current rate of extraction, without additional water, we would have had restrictions in Dublin in 1975, 1976, and 1995. We have a very serious problem that has to be addressed.

Obviously, a project like this is a multi-generational project. This project will not be built for ten or 20 years. It will be built for the long term, just like Vartry in the 1860s and Poulaphouca in the 1930s and 1940s. This is a project that will sustain the region for a very long time. We have taken 2050 as a reasonable planning horizon. Over that period, we are projecting domestic demand growth of just under 1% per annum. Housing will be growing by 1.3% per annum based on the projections. Non-domestic demand shows compound growth of 1.25% per annum. That is about half the projected economic rate of growth, reflecting our expectation that water use will be more efficient than a straightforward reflection of the rate of overall economic growth.

That is about half the projected rate of economic growth, which reflects the fact that we expect water use to be more efficient than overall economic growth would suggest. I have discussed the leakage targets. We are talking about hitting 20%. A target of 20% is not achieved in any water utility in any part of Britain or Ireland, with the possible exception of Anglian Water. which runs at just under 20%. We have put in a very modest strategic provision which has been scaled back to 30 million l a day. As a country with significant water resources in a world which is increasingly water stressed, there is huge opportunity for Ireland to pitch for businesses that have a significant demand for water such as microelectronics, pharmaceuticals, agrifood and so on. Ireland, along with a limited number of other countries, is in a unique position to avail of that opportunity, particularly in a world in which water scarcity is very much becoming the reality.

To look briefly at how we went about this and at where we are with the current appraisal of options, as I said, we initially had seven variations on the Shannon option which were identified as far back as 1996. I will come back to those in a minute. We looked at the Barrow and at how it could be combined with the Liffey but the reality is that Poulaphouca is fully filled by the Liffey system. There is nothing extra we can do in wintertime to get Poulaphouca more secure than it is. Therefore there is no possibility of running river abstraction beyond what we are taking at Athy without impacting many other abstractions and other uses.

In terms of groundwater, there are decades of models, testing and assessments which have been carried out on the groundwaters around the greater Dublin area. In the 1970s and 1980s, prior to current environmental legislation, there might have been some chance of getting water, for example, in the Curragh. It was tested at various times, although never successfully and with huge opposition from those using the land, such as the equestrian industry, because of the potential impact on the groundwater. The best example of groundwater exploitation in the region was intended to be the Bog of the Ring. It was the holy grail. It was going to produce 20 million l to 30 million l a day. It got to 3 million l and has now been scaled back to 2.5 million l because the water simply is not there. At the moment the environmental designations which exist in this area, the horticulture industry in north Dublin and all the various land use activities would mean that, if one had to, at the very best one could get 0.5 Ml from a borehole here and there which could be combined in a very expensive and very complex network in order to get modest amounts of water, but that is as far as one would get.

There is no major water supply for the greater Dublin area available from groundwater, but it will always be important for local land use. It is also critically important for the environment of the Pollardstown fens; the Curragh system, as I have said; and so on. There is a huge number of constraints. By the way, this groundwater underpins the base flows of the Liffey and the Boyne. That is the critical point. Both of those rivers would be depleted by large scale abstraction of groundwater, therefore one would be robbing from Peter to pay Paul.

The situation is similar in respect of desalination. Desalination is a technically feasible option in countries which have no choice. It is extremely expensive, extremely complex and difficult to operate. I recently spoke to both Thames Water and Melbourne Water about their experiences of desalination. They said that it was horrendously expensive and very difficult to run. They also said that it is very difficult to get the water quality right for consumption. We would have to try to blend it with the surface waters. Running river water provides perfectly good, safe, clean water right across this country. Whether we are talking about Cork, Waterford, Galway or Sligo, every one of those major schemes works off river water. Groundwater is the main means of supply in south Wexford and a few other areas of the country, including parts of the midlands, but the rest is served by the run of the river. There is no suggestion from any scientific person that there is a health issue or a trihalomethane issue with properly treated surface water. Where we have those problems it is because no proper treatment plants were provided back over the decades. We are now retrofitting those. Surface waters are absolutely reliable and safe and we are very lucky to have very good quality surface waters for treatment for use as drinking water.

The bottom line is that all of those options have been looked at exhaustively. We have a massive problem to deal with. We have a scheme which has now been identified and which has now been designed in enough detail to be very confident of the cost. The costing which we now have, €1.2 billion, includes all of the overheads and costs above and beyond construction costs. Construction costs are still €850 million to €900 million, but all of the other costs relating to overheads, management, delivery, procurement and all of that will bring the cost to about €1.3 billion eventually. It represents 2% of the Shannon's waters at Parteen, which would be taken directly from the water which would be otherwise used in power generation. That compares with 41% of the Liffey's waters. I doubt there is a river in Europe which is used to that extent sustainably.

On the public consultation, we had a very significant engagement, which is detailed in the report. We have had more than 200 written submissions. We are treating every one of those as bona fide. We have considered them very carefully. In the detailed written response to those submissions which we have provided we have tried to give factual clear answers to the best of our ability. There is no question we will not answer on this scheme. There is no detail we will not stand over. We are absolutely determined to build trust and confidence in this project because it is absolutely critical to the future social and economic development of the midlands and eastern region.

I thank Mr. Grant. I will take three Deputies at a time. I call on Deputy Eoin Ó Broin. He might indicate to whom he is addressing his question.

This is possibly the biggest infrastructure project in the history of the State. It is right that the committee should try to scrutinise it to the greatest possible extent. We all want to do the right thing in our engagements here and with the various parties involved and we are approaching it on that basis. I acknowledge the extent to which Mr. Grant, Mr. Quinn and their staff have made themselves available to us, both during the consultation and outside of it. I also acknowledge the amount of work which Ms Kennedy has put into this. While there has been extensive consultation, the volume of which I do not criticise, there is always the difficulty that, because both Deputies and members of the public do not have the level of expertise which the professionals do, we are always at a disadvantage regardless of the volume of consultation. Therefore having somebody who is able to bring at least some technical expertise to the debate is helpful. Whatever Ms Kennedy's view of this project is, it should be welcomed.

I absolutely agree with the need to diversify the water supplies into Dublin and the Dublin region and I am convinced that we need to increase the supply. I just want to say that at the start. However, I continue to have significant questions about the project which I do not think have been fully answered. I will run through those questions now so that folks can answer them.

If I can direct some questions relating to Irish Water to Mr. Grant, the first thing is that our understanding when making our submissions last year was that Irish Water would announce its final preferred option around this time last year and that it would move to planning sometime around September, so there has been about a year of a delay. We understand that part of that is the delay in the legislation around water extraction licensing, but we have also heard many rumours about disagreements between the Department and Irish Water over aspects of the project. First of all I would like Mr. Grant to explain the nature of the delay. Also, given the fact that we do not even have heads of a Bill in respect of that extraction legislation, even if Irish Water goes ahead with planning, how does Mr. Grant see the timeline of the project being affected by legislation on which it is dependent, which will be very controversial in itself?

I have a difficulty with the use of the word "demand". I know it is one of these smaller issues but "demand" suggests the volume of water that people need and use, but we know the demand also includes the 200 Ml or so lost to leaks. It is important to say that at the start. I am interested in whether Irish Water has costs for that leakage, whether annual costs or otherwise. How much is it costing Irish Water to lose that volume of water annually, because it is important for us to factor in those costs when looking at the overall cost effectiveness of the project?

I am also very concerned at the volume of water. If the project goes ahead and if water starts being pumped from Parteen Weir up to the Dublin and midlands region, how much of that water will be lost both from 2021, when it would begin, and up to 2051? My estimates are that at least half of it will be lost at the outset and that by the end approximately 44% of it will be lost. I hear everything Mr. Grant is saying about leaks but again, for the ordinary person in the street, the idea that €1.3 billion would be spent but that at the end of the project 44% of the water pumped from one part of the country to another would be lost into the system is hard for people to understand. First of all are my figures correct? If not, can Mr. Grant correct them? Will he respond to that issue?

In terms of pipe replacement, nobody has ever come here and said that we need a short quick burst. Everybody understands that replacing the pipe system, particularly in the city of Dublin but even in the surrounding counties, will take time. This project however, will take us through to 2021 and 2051. It is again difficult for us to accept that programme cannot be accelerated. I know Irish Water is constrained by the capital investment which the Government has given it.

I have asked this question before but I will ask it again. If the Government was to say that it was going to provide an extra €100 million, €150 million or €200 million per year to accelerate leakage detection and pipe replacement, could it be used? The witness has told me previously that it could not be used. Perhaps he could explain to the committee why that is the case.

A picture of a street was presented among the slides. The word "disingenuous" is unfair but it is certain that the picture presents a worst-case scenario. Most likely, it depicts a street right in the centre of Dublin city near Temple Bar. I accept that there are greater complexities in those areas. However, we are also talking about many residential areas which, I presume, would not involve the same levels of complexity. I do not want the witness to think that anyone on this committee believes that pipes can be fixed overnight. If the Government had the political will to provide the funding, surely that could be accelerated.

I am concerned that, rather than accelerating leakage detection and pipe replacement, we might see a slowing down of the process in the context of the comments Irish Water made when we were considering the revised drinking water directive. During that discussion, the company's representatives said that if additional requirements on capital investment were necessary to meet the requirements of that directive it might mean leak detection and water saving initiatives are reduced.

Can the witnesses discuss aquifers in more detail? In my submission, I made clear that my main concern is that the report on which Irish Water based comments dates back to 2008. I am not in any way qualified to comment on whether what has just been said is correct but it seems that a 2008 report could be updated. Has any consideration been given, as I suggested a year ago, to updating the report?

I am not a mathematician or an expert. However, I have listened to two very intelligent people who have put a lot of work into their facts and figures and who are telling me two completely contrasting things. I simply do not have the ability to adjudicate. It seems that the suggestion that there be an independent assessment of those claims is very sensible. If the witnesses are as confident as they say they are that their mathematics are correct and that Ms Kennedy's report is wrong, then surely an independent assessment, given the scale of this project and the money involved, would be a sensible course of action.

In terms of broader escalating costs, this State has a history of beginning projects with projected costs and finishing them with significantly different costs. I refer, for example, to the national children's hospital and the Dublin Port tunnel. How confident are the witnesses that €1.3 billion is the maximum amount required? What can they say to reassure us that we are not going to have a repeat of previous episodes?

Ms Kennedy has made very big claims. I have spoken to many water engineers who are not Irish Water staff, some of whom are quite critical of that body. Those people accept the need not just for diversification but for increased supply. Why does Ms Kennedy believe that the committee should accept her arguments and not those of Irish Water, which has skin in the game, and water engineers who are working - day in and day out - on the water crisis in Dublin? Why should we believe Ms Kennedy as opposed to those people? Can Ms Kennedy give us her response to Irish Water's comments in terms of the repair timeline and the example of London? I know she has a different view on that. Can she respond to Mr. Grant's comments on the groundwater issue and whether aquifers could provide at least some of the additional supply?

I thank the Chair for allowing me to substitute for Senator Conway. I support Irish Water in what it is endeavouring to do. The Government recently launched Project Ireland 2040, which is planning for the future. For too long, successive Governments batted problems away. We built houses and transport systems where we needed them when we had population explosions, etc. I welcome that we are now actually planning for the future.

This project is part of the process of planning for the future. It is a very good project and I have no issues with it. I would appreciate it if the witnesses could talk me through the route. Irish Water's engagement with landowners has been very good and I would like to hear more about it from them. I would also like to hear more about the funding of the project in its entirety. It is important that it would not start and stop after a particular point.

On the point raised by Deputy Ó Broin, An Bord Pleanála is an independent entity and it carries out independent assessments. Its assessment will reveal any problems that exist. I do not expect it to find any.

I thank Ms Kennedy for appearing before the committee. I am not a member of this committee and so I am unaware of the ins and out of how we got to today. Why did Kennedy Analysis carry out an analysis on this project? What was its motivation for that? All written reports require data. I would like to know from where the data used by Kennedy Analysis came because I do not see references to it. The report it has produced criticises Irish Water for the data it has used but I do not know from where Kennedy Analysis obtained its data. I would love to know that.

I will make a parochial comment. All of Ms Kennedy's opening statement related to Dublin. There is more to the country than Dublin. The representatives from Irish Water discussed the midlands. I am parochial because Mullingar and other areas in County Westmeath are included in that. I would love to know why Ms Kennedy only speaks about Dublin and does not refer to the rest of the country.

Ar an gcéad dul síos, ba mhaith liom fáilte a chur roimh na daoine anseo inniu. I thank all of the witnesses for attending. I welcomed Irish Water earlier and I want to welcome Ms Kennedy now, along with the guests from businesses in the Shannon region. I want to ask Mr. Grant and his team about the non-domestic demand analysis. Indecon made it clear that, in its view, given the population growth, the method for calculating non-domestic demand is not appropriate for Dublin. What set of data will Irish Water be using in its updated analysis? Will it be the Indecon sector-by-sector data or the Jacobs-Tobin population growth data?

On leakage, the first-fix scheme for recovering customer side leakage recovered 38 Ml daily in 18 months of operation, despite the fact that only 40% of the leaks identified by the scheme have so far been repaired. The analysis for the Shannon project assumes that the total amount of water being lost to all customer side leakage before the first-fix scheme began was just 40.8 Ml. It would appear that this data point in the analysis for the Shannon project may have been incorrect. In its next analysis, what base year will Irish Water be using in the context of assessing the level of customer side leakage?

Kennedy Analysis states that the analysis for the Shannon project used data for the costs of leakage recovery from before the installation of meters, when the recovery of water through fixing leaks was much more expensive. Kennedy Analysis states that the cost as per the results of the first fix free scheme are less than a third of the costs used in the analysis of the Shannon project. Can Ms Kennedy explain this?

Irish Water may state that the cost of recovering water through fixing leaks is cheaper to start with but that it becomes more expensive as time goes on. In this regard, it is worth noting that the first fix scheme has already recovered three times as much water as the analysis for the Shannon project thought would ever be recovered, factoring in costs. In addition, the costs of recovery per unit of water under the first fix scheme have actually gone down every quarter.

Mr. Grant was very dismissive about the sources of groundwater in Dublin, which I do not accept at all. Kennedy Analysis states that none of the errors identified in terms of the groundwater analysis that was undertaken for the project have been addressed. Can Mr. Grant explain this? I come from County Tipperary, where there are many different sources of water. We discussed a river source earlier in terms of contamination. Groundwater sources are very prevalent all over Ireland. I am sure it is no different in County Dublin. Bore wells are sunk on a regular basis. In my area of Clonmel, people are getting huge supplies in this way. Mr. Grant was very dismissive of those sources. Half of the population of the countryside, including private homeowners and farmers, are depending on them.

It was stated that the Shannon project is all or nothing and that not a drop of water can be delivered until the entire project is completed. This project will cost the best part of €1.3 billion. Regardless of how much water must be supplied eventually, it seems to me to be a strange analysis.

It is notable that the analysis produced by Irish Water's two separate advisers reached very different conclusions on the total water needed in 2050. Indecon concluded that the answer was 207.5 million l and Jacobs Tobin concluded 330 million l. My understanding is that the analysis for the project required that individual water sources demonstrate the ability to supply 350 million l of water daily on their own in order even to be considered as a potential water supply option for Dublin. Would it not be sensible to consider several smaller alternatives in combination that could be brought online incrementally? Could this not also offer Dublin the benefit of diversification away from river water sources and protection in the event of, for example, contamination? I addressed Mr. Grant earlier about a smaller scheme in my local town where a new plant was totally contaminated by kerosene. Will Ms Kennedy explain the three errors to which she referred in her presentation and explain the difference between the leakage figure of 57% and the Irish Water figure of 38%? I note Mr. Grant never mentioned leaks past the meters, in homes, gardens and so on. There is a big discrepancy in the two figures presented.

Lest I be called out as being anti-Dublin, I am glad Senator McFadden referred to areas outside of Dublin. We see this every day on all issues. I am not anti-Dublin one way or another. I am here to represent the taxpayers and the public. This is an enormous investment and I simply want proper analysis and proper independent studies to be published before we embark on this project. As we know, in almost every project of this size, there are huge overruns and huge underestimation of costs. I honestly believe we must have a further in-depth analysis before the Government allows Irish Water to spend that amount of money to pump that volume of water. We talked about the leaks but there is also leakage into pipes, to which the witnesses never referred, especially when there are outages. There is leakage of contaminants into the water system during repairs. Contaminants can also get in when there is low pressure and huge amounts of chlorine and so on are then used to try to clean that water. That was not addressed at all. I understand the use of gravity from Birdhill, but if Irish Water is going to pump this volume of water, the pressure it will put on the system here will cause many of the pipes to disintegrate. As was said, they are old and antiquated. Will there be connectivity on this line through the passage of the pipeline through Dublin? I have heard there will be and I have heard there will not be. Many of us could run up and down inside a pipe of such a big size. I believe it would be very hard to make incisions in it to take off connections and control the volume and the pressure. That has not been mentioned at all. It has been said on radio by some of Irish Water's spokespersons that it would serve other towns and areas on the pipelines. Perhaps the witnesses could answer some of those questions.

Would Ms Kennedy like to respond first?

Ms Emma Kennedy

Sure. I will respond first to Deputy Ó Broin. He raised a question about how engineers are telling him that as things stand on the ground - they are dealing with a very difficult situation - they need increased supply. It is not surprising they are saying that. Of all the water going into Dublin's water supply system today, most of it is being lost through leaks. This does not make the engineers' lives any easier. They must put a certain volume of water into the supply system regardless of the fact that only 43% of it is actually being used. The other 57% - and we will come to that number - is disappearing into the ground. If leakage were much reduced, which it should be, they would essentially have an entire new source of water in reserve that they could put into the water supply system. Naturally, they are dealing with the real situation on the ground. Leakage is a key issue and a key part of this. Another key part of it is the infrastructure. Historically, as I said, that has been the water treatment plants. All the major ones have now been upgraded, apart from Vartry, which is about to be upgraded. The other key part of this is deployment, that is, the ability to move freely all the water that is put into the water supply system around the entire system. Historically, this has been a big problem. I saw the figures Irish Water cited in its slides today as water that is available for distribution input. That is not actually the total water available for supply; that is clearly being deducted for these deployment issues. Therefore, the numbers the members see in Irish Water's table are not the total numbers. The numbers from its own report are for 2015, when its production capacity was 623 million l. I cannot find the correct slide but it cites a much smaller number. I think I wrote it down; it is 598 million l. The number that is being cited is smaller than the total volume of water that is actually available for supply, according to Irish Water's data. I believe this is because Irish Water is reducing that for deployment issues. Irish Water stated in its final options appraisal report that four major ongoing projects will address these deployment issues and, in its words, make all this water freely deployable throughout the entire water supply system. These are Irish Water's words, not mine. Once those four deployment projects that Irish Water has identified have been completed, the job of the engineers on the ground will be significantly easier because they will be able to move that amount of water freely throughout the system. I think that answers the question about the problems right now. This possibly relates to other questions as well. As I said, the Kennedy Analysis position is not that Dublin does not need a supplementary water source - we believe it does - but that, mathematically, in terms of what is needed to be put in, once the infrastructure issues are addressed there will be plenty of water for Dublin.

The Deputy then made the point about London, and Mr. Grant has talked quite a lot about London and its leakage levels. There is a lot to be said on this, and I will try to keep my comments brief. London is often used by Irish Water as a comparator with Dublin because the supply systems are of a similar age and nature. London has made great strides in the past 20 years in improving its supply system. Mr. Grant said that the highest rate at which they have been replacing pipes in London is 1.3%. I would love to see Irish Water's data for that. Our understanding, based on data in our analysis, is that the figure is closer to 3%, even in recent years. London's Thames Water missed its leakage target last year for the first time in 11 years. As a reaction to this, and as a response to its customers' feedback, it is ramping up its leakage reduction efforts. In the upcoming window from 2020 to 2025, London, despite the fact that it is now operating at a leakage level around half that of Dublin, will reduce its leakage in absolute terms by 15%. During essentially the same window - a year later, from 2021 to 2026 - the plan for Dublin is to reduce leakage by 7.7%, that is, half the leakage reduction for a system that has twice the leakage. To go into London a little more, again, in its efforts to ramp up its leakage reduction, Thames Water has said it is looking to employ more people, to have more feet on the ground and to invest in new technology to allow it to meet its newly upgraded target. It has published its draft water resources management plan for next year, which anyone here can view. There is a lot of information in it about its plans on leakage. It had been planning for that upcoming window to reduce leakage by just 9%. The answer it received from customer feedback - and it spoke to thousands of its customers - was that leakage is their top priority. Thames Water therefore increased that 9% target to 15%. We are therefore talking about far more ambitious targets in London than those we see in Ireland. Does that answer the Deputy's questions on London?

On groundwater, we have raised many issues about the analysis that was done for this report into groundwater. The only report that was done into groundwater for this project was produced in 2008. Irish Water's own adviser described that as "a high, desktop-study level, on limited data". The report itself stated it had to rely on studies and data "that have been collected by many individuals ... for a variety of purposes and therefore will be variable in depth and strict relevance to the main focus of this report". The report continues, "Nevertheless, this is considered to be acceptable for the type and general nature of this report."

That report was produced in 2008. It repeatedly described itself as conservative. It has also been described as too conservative by many commentators.

The report was constrained in various bizarre ways. Instead of considering water resources within, for example, such as Dublin's existing water treatment plants or within 80 km of the periphery of the supply area, the report considered a zone centred on downtown Dublin. That seems strange because everybody knows one is not going to drill a bore hole in downtown Dublin. The report also set out various tests that were incorrectly applied. For example, the report identified aquifers. If one is considering pumping that water to the supply system then for it to be valid option one needs a certain volume of water. If one considers aquifers that are further away then, legitimately, they need to be bigger.

The report set out what it described as a resource and distance threshold that it then applied. However, the resource and distance threshold test itself stated that the distance had to be the distance between the aquifer and the point of distribution or use, in other words, the closest point to which one can get into the water supply system, be that the water treatment plant or the nearest part of the pipes. The test was applied incorrectly. Instead of measuring that distance it measured the distance from the aquifers to downtown Dublin. When Irish Water took the project on in 2014 it undertook a desktop or desk-based review of that earlier desk-based study. Irish Water failed in its review to take account of the fact that by then the nature of the supply area had expanded significantly and also several other matters that I shall describe in a moment. Let us not forget that the original application found that six out of 19 aquifers that had been identified had potential but the original report said that only six of them were close enough. If the test had been reviewed correctly at the time of the review by Irish Water then it would have found, by that point, that 11 out of the 19 aquifers were now valid. The review discarded what was known as a regionally important aquifer. Notwithstanding that the aquifer then fell within the new expanded supply zone, it was disregarded because it was too far from downtown Dublin.

Members will have received some background information on groundwater before today. We raised a whole raft of questions about groundwater, including these errors and several more, with Irish Water. Not a single one of these errors has been addressed. Our issue with groundwater is not that things change and there is suddenly more water under the ground today than there was in 2008 or, indeed, in the reports that the 2008 review relied upon. Our point is that there were errors in the original report and, more significantly, there were errors in the review conducted by Irish Water. We have flagged these in significant detail and not a single one of our questions has ever been addressed.

In terms of groundwater as a resource, between 25% to 35% of the Irish water supply comes from the ground and in London it is around 30%. One of the greatest claims for Paris is its diversification and security of supply. All academics concur that to have security of supply one needs a variety of types of water sources. Paris gets 50% of its water source from the ground. There is a significant amount of groundwater located close to Dublin and this very conservative report reached the same conclusion. It is important that groundwater is reassessed on the correct basis because it would offer diversification and a sufficient supply of water to Dublin once the correct demand figures have been accounted for. Have I covered all of the questions on groundwater?

The committee usually finishes its meetings at noon but we are discussing a very detailed topic today. Do members and witnesses agree that we extend the meeting until 12.30 p.m.? Agreed.

Ms Emma Kennedy

I thank Senator McFadden for her questions. The first question she asked was what motivates me.

Ms Emma Kennedy

I have been very open about the fact that I first heard about this project because of a family connection. My husband originally came from Nenagh, County Tipperary and his family have a farm in the area. I originally heard about the project because the proposed pipeline would cross his family's farm. When I first heard about the project I heard about it in the same breath of being told. My first response was they are looking at pumping water to Dublin but how can Dublin possibly need water in response to which I was told that Dublin has a leakage rate of 57% and a proposal to pipe water is being considered. All of that piqued my interest. I am very technically minded. I was a lawyer and my background is in technical forensic analysis. Instinctively, I downloaded the reports and read them. As I read each page red flags flew up everywhere. For example, a summary of a report would fail to accurately reflect the contents and I became interested. From a very early stage I became engaged with different groups who were also fighting the proposal for their own valid reasons, including the River Shannon Protection Alliance, Fight The Pipe Ireland, etc. There are many organisations fighting the proposal for their own reasons. That is how I first heard about the matter and I have been completely upfront about it. I hope that there is no implication that my potential conflict, if one wishes to call it that, detracts from the value of the work that we have produced.

Ms Emma Kennedy

The Senator asked where we got the data. Again, I do not know if she has received the information that we sent in advance. If so, she will be able to see the evidence for the three errors that we talked about and, indeed, all of our analysis. Our data is Irish Water's raw data, perhaps as much as 95%. Irish Water produced umbrella reports that are informed by underlying reports from various experts. The principal report is the Project Need 2015-2050 report. It was an umbrella report that was informed by two separate reports. One report was compiled by a company called Indecon, which was an independent economic adviser to Irish Water, and the second report was compiled by Jacobs-Tobin, which was the engineering adviser. The reports contained more technical data, and tables of numbers, etc. That is where almost all of our data comes from and, to the extent that it is not, it is from other publicly available sources. None of it is data that we have generated ourselves. It is all data that is either out there or that Irish Water has put out there.

Senator McFadden made the point that there is more to the country than Dublin. Of course there is. Our focus is very much just this project. The key focus of this project is the greater Dublin water supply area. I think the Senator referred to the benefit corridor concept. This project has lasted for 22 years. In 2015, the time that the Project Need report was produced, the concept of a benefit corridor was introduced. The details provided at the time of the report on the benefit corridor were extremely scant and incomplete. At the time there were tabular statements provided that literally showed question marks or had the words "not yet available" written into the columns in the tabular statements. The details were inadequate. In our view, there were errors in the analysis that was undertaken for the benefit corridor. For example, a huge amount of work was undertaken to calculate the water deficit for the greater Dublin water supply area. They asked themselves how much water people in the area need, how much water is available for supply and what will be the deficit. On the other hand, the amount of analysis done on the benefit corridor was incredibly scant and literally amounted to a couple of pages. Instead of looking at a deficit the question asked was what will the total water demand be for the entire area. A number was produced, adding the demand number to the deficit number, which is like trying to add apples and pears. It is mathematically invalid to conclude that 330 million l of water per day is needed.

Interestingly, I wish to again refer to the two advisers, Indecon and Jacobs-Tobin. How to handle the benefit corridor at that time was one of the issues on which they disagreed. Indecon believed that one needed to take account of water in the area. That, combined with their approach to non-domestic demand, resulted in two very different conclusions. Indecon concluded that the need for the greater Dublin water supply area, combined with the benefit corridor, on their base case scenario, was 207.5 million l per day. Jacobs-Tobin, for exactly the same area, concluded that it would be 330 million l per day. Let us compare the Indecon figure of 207.5 million l per day, having used the same data but looking at it differently, with the Jacobs-Tobin figure of 330 million l per day. A key driver was how can one analyse things connected with the benefit corridor.

I am certainly not Dublin-centric by any means. I am just looking at what this project is about and that has been my focus. Does that answer all of the Senator's questions?

Could I ask for a copy of the report? All I have is the witnesses' opening statement as I am not a member of the committee but am only a visitor.

Ms Emma Kennedy

With pleasure. I am happy to send that for the Senator.

Most of Deputy Mattie McGrath's questions were directed at Irish Water. I was very lenient with Ms Kennedy as she had additional time in her opening statement. I am trying to balance it out. I am hoping Mr. Grant can answer the questions that were put to him within ten minutes.

Mr. Jerry Grant

I will do my best but a lot of statements have been made about numbers that are, I think, misrepresenting matters in a large way. I do not question the members' bona fides at all but the statements are not reflective of the underlying data and analysis that was carried out over many years by experts and specialists in this field.

To Deputy Ó Broin, at a broad level I would say that the project is a scheme for the generations. This is a multigenerational project and diversification from the Liffey is absolutely critical. Over the next ten or 20 years we are going to see the bite of climate change on the Liffey, which I think will force us down. We have reflected that to a minor degree in our longer-term projections of available water in Dublin. It could be a lot more severe than those projections suggest. The whole management and oversight of Poulaphouca reservoir between ourselves and the ESB is something we are discussing with them very carefully at the moment. Every drop of water there is critical to the figures we are banking on. We welcome all the feedback we have got and view it as critical testing of our approach ahead of the ultimate independent assessment of this project, which is An Bord Pleanála, where every element of the technical evaluation of the project will be tested and I believe will be found to be very strong indeed. It will be all the better for the fact that so many issues have been raised and worked through by my team and the various experts who have worked on it.

On the issue of delay and extended time, we consider this to be a massively urgent project but we also recognise that the environmental impact statement, EIS, documentation, the Natura impact statement and all of the planning support documents are immensely complex. There is a huge amount of survey work carried out on Lough Derg, for example, and a huge amount of environmental modelling. We have had massive engagement with landowners along the route. A lot of that engagement around the routing of the pipe, for example, has included in the final analysis tweaking of the pipes around matters which it was very important were identified, constraints we would not have seen at the macro level. When we get down and talk to people on the ground, they point out features we should try to avoid. We have worked through that to the betterment of the project. I am extremely grateful to all of the stakeholders and the great co-operation we have had over the past year or two. We have carried out a huge amount of survey work, site investigation and so on.

Ultimately, the submission of this to An Bord Pleanála in the middle of 2019 is dependent on the abstraction legislation. There is absolutely no disagreement whatsoever between us and Government on this project. The funding of it is included in the national development plan and it is recognised as an immensely critical project. We did have discussions around the legislative framework within which we would apply for the abstraction licence. We had a number of options to consider. The 1964 Act involves abstractions from reservoirs and there is also the 1946 Act. However, the passage of time and the burden - and benefit - of environmental legislation is such that we need our abstraction legislation updated. In order for us to take a project of this scale, complexity and importance to An Bord Pleanála, there should be certainty around the legislation. The commitment from Government is to endeavour to have that legislation in place. It is not just related to this project but also to compliance with the water framework directive. It relates also to many other abstractions that we urgently need to progress around the country. We have many regional schemes that we want to progress.

Has the Government given a timeline for the legislation?

Mr. Jerry Grant

The target is the end of the year. Clearly, that is not in our hands. There is talk in terms of demand expressed in respect of including litres. The bottom line is that when the water leaves the reservoir, it goes into the system to be used by consumers. Losses occur in every water system in the world and ultimately the only guarantee we have that people will have a standard of service is having enough water to meet their needs, whether they leak or waste it or not. At the end of the day, one neighbour has not got control over another and we certainly do not have control over the water once it passes through the stopcock and enters the property. We have made incentives available to householders and they have been successful to a degree. The bottom line is that the interaction with us of householders and businesses to save water and fix leaks is an ongoing challenge. We do it all the time and work on it every day. The water that is used by consumers is the demand we have to satisfy if we are to meet the level of service to which we have committed.

In terms of losses, we have a very clear view now, based on the best information we have on non-domestic and domestic demand, that 36% of the water is lost in the system. We intend to bring that down to 30% over the next four to five years, which is a 20% reduction in leakage. It is 6% of water into supply but a 20% reduction in leakage. Many of the figures that are being quoted here for leakage reductions are based on reducing leakage by some percentage. That is 20%, not 6% of leakage reduction if we look at metrics that are quoted for other water utilities. Our interest is how much extra water we save that is available at the plant. That is what we have been talking about. To get to 25% over the longer term will be a massive challenge. To this day, London is between 23% and 29% depending on the time of year, according to last year's figures. It has gone back to a point of intensified leak repair as its fundamental challenge at a much greater level. London is only one of many cities that are comparable in Britain. Glasgow, for example, has very similar water to Dublin. Loch Katrine and the Vartry system would have the same quality of water and the same corrosivity issues and they are over 30%. This is a massive challenge for our types of network, old cities with old and varied pipework. By the way, much of our problem also relates to new pipework laid by developers over the last three or four decades that was not laid particularly well.

The reality of pipe replacement is that it is very difficult and complex work. Deputy Ó Broin is absolutely right that in the centres of Dún Laoghaire, Blackrock and Dublin it is immensely difficult. That is where the cast iron is and it where the larger pipes and the larger leaks are. Back in the 1990s when a lot of work was done in Dublin, almost nothing was done in those areas because it was simply too difficult to face up to. That has to be addressed now by ourselves and we will deal with it. We will replace the pipes at a rate that makes sense to sustain the leakage savings we make through the leakage work that we do, just as they are doing in Scottish Water, across Britain and everywhere in the world. As I said, it makes no sense-----

Would Irish Water do it more speedily if resources were made available from central Government?

Mr. Jerry Grant

Capital is not a constraint on this. It is absolutely not a constraint. I cannot predict the future but today, capital is not a constraint. It is about getting out there with the crews on the ground, finding and fixing the leaks, deploying the technology and building up the capital replacement programme behind it. We plan to do that steadily but will accelerate it if we need to. It has to be justified and has to deliver a return. This is the fundamental point. We could replace the old Vartry mains into Stillorgan for €65 million but what would we get for it? Three or four megalitres of savings. It would make absolutely no sense. We have lots of very good cast iron pipes in this city that are 100 years old and that should not be replaced and could not be replaced on a value basis because it is not the priority and would not save the water. Issues like future drinking water do not impinge at the moment on our capital planning. They have no bearing on it.

We could talk about aquifers all day but, as I said to the Deputy, the groundwater bodies around the greater Dublin area have not changed in the last 100 years. All of the data that was ever produced in terms of modelling and boreholes and so on is collated by Geological Survey Ireland, GSI. That is its job, it is the specialist. All the experienced hydrogeologists who have worked on it are basing their work on that data. For that family of hydrogeologists in Ireland who understand the groundwater issues, the primary issues are related to the yield we can get over the distribution. The idea that we could identify a borehole, for example, and just pump it into the nearest part of the pipe system is nonsense. We simply cannot do that. We must bring the water to a reservoir where it can be blended with the other water and put into supply in a managed way. Going into Portlaoise we have 12 Ml of water, which is procured over an area of 14 sq. km and then pumped 17 km to the town. That is the scheme there. If we try to replicate that for 100, 200 or 300 Ml we are talking about a system that we could never technically develop or manage and for which we would certainly never get approval.

In terms of scale, Deputy Mattie McGrath mentioned the fact that this is a once-and-for-all scheme. A new water supply scheme takes 20 years from start to finish. We have schemes all over the country. I can think of Clonmel, for example, where a new regional scheme based on the Suir is very urgently required, because there is a very poor quality supply. We are working on that.

However, it is taking significant time to do the same work that we are doing on this scheme to get it to An Bord Pleanála, hopefully, in the next six to nine months and built over the next six or seven years. That is the timescale involved. The scheme is presented as something on a vast scale. While it is a big project costing €1.2 billion or €1.3 billion, the Vartry reservoir was built in 1865 with picks and shovels and it served the city for 70 years. In its day, it was a bigger challenge politically, economically and technically. When the Poulaphouca scheme was developed in the late 1930s, huge areas were flooded and a massive dam was constructed while there has been significant work since to get the water into Dublin. The scheme has also broadly served the city region for 70 years. However, those systems are now exhausted and the deployment work referred to comprises projects we are doing to shift water between the various schemes and make sure the last drop of water we can produce can be delivered, which is the challenge.

On the question of per capita demand, nobody knows what domestic side leakage is. Householders fixed leaks and we fixed leaks together in the first fix free scheme throughout the country that saved water, which on the customer meter amounted to 100 million l of which 25 million l were in Dublin. Less than one third of that was reflected back at the source because when a customer's leak is fixed, the neighbours' water pressure improves and they get a better service. Other leaks then develop. It is just like leakage on the system where a dividend of 20% or 30% is generated but then new leaks happen. Plumbing systems continually develop leaks on washers, WCs and so on. That goes on all the time. Every frost causes bursts on service pipes that are too shallow. That will continue because we will never get to the point where we can replace all of them. We will have customer side leakage. It is included in the per capita figure in these numbers.

This is where we have clarity compared with Britain, for example. We have predicted the future demand of the domestic population of Dublin and the midlands region at 135 l per head. If this was done in Britain, they would quote 150 l per head because they use 130 l for metered properties and they assume 160 l for unmetered properties. We have assumed, rightly or wrongly, that demand will be 135 l per head, inclusive of leakage. That figure is derived from the customer data we have. It is a conservative assumption to make and we could not resile from that. That is the minimum figure used for planning throughout Europe. A small number of countries can point to lower per capita consumption because they have user charges at high rates, for example, Denmark and Germany. Other than those, 135 l per head, inclusive of leakage is considered a low number to the planning for. Nobody knows how much leakage there will be in that. If 20% of that is leakage, that represents 7% or 8% of total water production. If we could, in turn, find 20% of that, it would represent 2% or 3% of total water production. That is the reality in respect of 800,000 domestic dwellings in the midlands and eastern region. Any fast thinking, logistical study of what one might reasonably get back from these, working with each of them as private citizens in control of their own plumbing systems and their own behaviours, would say one would be doing a brilliant job if one could save 1% of that water. To suggest there is a Holy Grail in domestic leakage is unbelievable.

I will take the final three members as their questions might overlap with some of those previously asked. I will bring Mr. Grant back in afterwards.

We can all get lost in figures relating to leakage and so on. I acknowledge the work Ms Kennedy has done on this project, which is a personal crusade she has taken on, and the volume of information she has presented to us. Anything I say will not be critical of what she has presented. Water quality, supply and leakage have been referred to in detail but, at the end of the day, if we fix 100% of the leaks, which is probably not possible or never will be possible, and fix the Vartry water supply - I live beside it and I have dealt with the algae bloom year in, year out - with the work commencing to fix that now, additional water will still be needed in 15 or 20 years, regardless of what anybody says. Sir John Hawkshaw and Sir John Gray sat somewhere in Dublin 150 years ago and decided to build the Vartry reservoir, which we are still using today. They tried to secure a deal with the canal owners at the time because there was no security of supply from the canals and they built the reservoir. In 2018, we need to have the vision those men had to secure a water supply not only for Dublin but for the surrounding areas as well. Nobody at this meeting knows what the population will be or the volume of commercial water that will be needed but in my heart and soul, regardless of how many leaks are fixed and how much our current supply improves, we still will not have sufficient water to deal with increasing need into the future. We are being asked to make similar decisions to those made by those two men 150 years ago. I could get lost in figures and go backwards and forwards to argue about waste, supply, population and demand but, at the end of the day, we need a secure supply of water for the country. I thank Ms Kennedy for the effort she has put in. I will not debate the figures because we need to secure the supply of water now and into the future.

I thank the witnesses for their presentations. We need security of supply but we need to be sure supply is available through diversification. I support Ms Kennedy's work very much because she has given us the opportunity not only to go with the flow but to do our job as legislators and take a hard look at what is being proposed.

I have a number of questions for Mr. Grant. The new project proposes to bring water from the River Shannon to Dublin. Will Irish Water continue to take water from the River Liffey? Will the company use groundwater sources for supply? I am concerned about quality. If the water is brought from the River Shannon, pumped into the greater Dublin area and becomes contaminated, what diversification options will be in place to ensure security of supply? On the issue of leakages, seepages and so on, has analysis been conducted on water saving appliances? Technology is developing in this area with regard to conservation. What savings could be made in water supply to ensure we do not have to look to another project similar to the River Shannon scheme?

The Green Party in Limerick met the River Shannon Protection Alliance last weekend. Questions remain about the environmental impact of the scheme, even if only a small volume of water is taken from the river.

There will be some impact one way or another. If it were to happen, would there be any chance of a greenway being laid alongside it to bring tourists, not just only water, back and forth across the Shannon region?

I agree with other speakers. Irish Water is getting great headlines again today with the proposed Shannon project. It is ironic that, for such a small country surrounded by water, we have a massive problem with water supply. I was in Tempe, Arizona, several years ago, which is surrounded by desert but has an excellent water supply. Looking at the Shannon as a source of water supply is the way forward. Taking water from the sea would cost too much with desalination and so forth. There are also issues with taking supply from groundwater such as lime content and other environmental concerns.

It is unfortunate that there is 57% leakage in Dublin. We need to look at this as it is our capital city. Mr. Grant said capital is not a restraint. When I worked with my local authority, funding was always an issue when trying to get a pipe on the network fixed, for example. Leaking old pipes, particularly in Carlow, are a significant issue. I know there is work going on to replace them, like the replacement of pipes in Borris recently. When these works are undertaken, the main streets and the shops are affected. I met recently with residents in Bagenalstown where there is work going on to replace water pipes. Several residents asked if those works could have provided an opportunity to lay down a gas connection for the town. Irish Water’s policy is to manage the water infrastructure and services and work with others. Is there joined-up thinking when such large works are taken on by Irish Water to work with other agencies? Has it a plan so that when it is pulling up a street or a road to work with other agencies such as Bord Gáis to lay other pipe networks or connections? There is nothing more annoying for people when a main street pulled up a year ago for water works is pulled up again for another agency. There is also a cost factor involved.

Budgets for projects often double and treble over time. By 2050, Irish Water hopes to have a significant reduction in leakage. Will there be enough long-term funding to ensure it meets this target?

Will Irish Water send us written replies on the questions of connecting and gas? I know it will be attending the committee later in the year on its planned programme of works.

I thank Ms Emma Kennedy for the time she has put into this report.

I am in favour of the Shannon project. I welcome the fact that over 800 km of pipes have been replaced over the past several years and over 1,000 km will be completed over the next four years. Even if we had a 100% replacement of pipes, as Deputy Casey said, it still would not solve the problem, however. As Senator Murnane O'Connor noted, we have to deal with the practicalities around it and we must have additional water supplies. With the adverse weather conditions we saw this year, I am concerned about the headroom space we have with our water supply. I know in the UK emergency headroom capacity is 10%. What is our headroom here?

I recognise there has been significant investment in infrastructure by Irish Water. There was a deficit in this area for several decades and it is now being addressed. We know water is underpinned in the national development plan and projected growth figures, both residential and commercial. If the population is to grow, we need a proper water infrastructure which is of an acceptable standard and will entice commercial enterprises to expand or locate here.

If there are questions the witnesses cannot answer, will they send them in a written reply to the clerk, who will relay them to the committee?

Mr. Jerry Grant

Funding is crucial in delivering a project like this. There are different opinions and projections on non-domestic use. We have reconciled these in the sense that we scaled back the strategic provision. We originally thought it would involve about 100 million l but we scaled it back to 30 million l. One wonders whether that is wise, given the opportunities. This is coupled with 1.25% growth of non-domestic usage.

Non-domestic use is well established through metering, although we are now renewing all the non-domestic meters because, as they age, they underestimate. We suspect that as we get new meters in, this might well have to be increased.

The question of water quality was raised and the idea that water can seep into the pipes. That can only happen if the pipes run out of water. This is the key point. If we eliminate outages, then the pressure in the pipes means one never gets back pressures and seepage into the pipes. There is a risk that if one has repeated outages, because there is not enough water, then there is a possibility that groundwater will get in. That is why we have chlorine residuals in the water and that is why we monitor water quality after outages carefully. The risk is that one does not have enough water to keep the system full.

There is no question that we will continue to use the Liffey, the Vartry and the groundwater sources in Monasterevin and Bog of the Ring, to the extent they are available. If there is an opportunity for local deployment of groundwater, we will absolutely continue to do that too.

On the broader question of environmental impacts, this water will be taken at the bottom of the Shannon system before it goes to the generator. It is a direct arbitrage with the ESB, just as there is at the Inniscarra and Poulaphouca plants. We believe there will be no additional environmental impact. We will have to demonstrate that to An Bord Pleanála. A significant amount of work has been done on this.

Leakage is not 57%. Leakage is 36% in the network. We talked about what it might be on the non-domestic side. It is probably 5% or 6% of total water supplied. We do everything in our power to incentivise savings around this water with householders and so forth.

Mr. Mike Quinn

On escalating costs around the project, when I joined the company back in November, one of the first actions I took was a deep dive into the five major projects under way. We have put in place a qualitative risk assessment, QRA, around each of the projects. If one looks at the breakdown of the costs around the project, the actual construction costs, as Mr. Grant mentioned earlier, are at around €850 million. We have contingency in there at 22% under the QRA, which is almost €299 million. We will endeavour to do much better than that. It is built into the €1.3 billion cost. It is a P60 contingency.

In terms of the money to get projects to being shovel-ready, there is a cost of €168 million on that. That is already in place.

We hope it will allow us to put the first shovel in the ground in 2021. I hope that I have answered Deputy Ó Broin's question on cost controls.

Regarding governance, this project reports directly to me. I have instigated a change control board and any scope variation in the project has to go through me. It then goes to the investment and infrastructure committee, which is a sub-committee of the board, and finally to the main board for approval.

If there is a screw-up, Mr. Quinn is the person who has to explain to us why it happened.

Mr. Mike Quinn

That is it.

Senators McFadden and Murnane O'Connor raised a point about funding. As Mr. Grant touched on in the earlier session, we have two significant projects planned, those being, the WSP and the greater Dublin drainage scheme. Their cost is just under €2 billion. In our capital investment programme, we spent €526 million last year. That grows to €680 million this year, €800 million for each of the following two years and then €900 million. That increase is built into our business plan. We are in discussions with the National Treasury Management Agency, NTMA, the Department of Public Expenditure and Reform and our line Department about how we might fund these two major projects, but I assure the committee that we will not start the WSP unless we have funding certainty. One cannot start a project of this scale unless the full-----

Unless funding is found.

Mr. Mike Quinn

-----€1.3 billion is in place.

When Mr. Grant appeared before us earlier, the impression we got was that the preference was for a fully State-funded scheme. When Mr. Quinn and the committee last met, he said that there might be other options, for example, a public-private partnership. Where does that discussion with the Government stand?

Mr. Mike Quinn

The first discussion took place last Friday, 20 April, with the NTMA, the Department of Public Expenditure and Reform and our line Department. It is the right thing for us to do to put all options on the table so as to ensure that the project has the best value. As the Deputy and I discussed at the time, there is a great deal of infrastructure capital available on the open market. Various funding structures can be used. For example, some of this could be done off the balance sheet or we could get an engineering, procurement and construction, EPC, contract plus finance. Our job is to put those proposals on the table, from which we will select the most appropriate funding scheme.

Ms Emma Kennedy

I will address a few of the outstanding points, including the one on 57% versus 37%. On radio yesterday, Mr. Grant conceded that the 37% figure did not include a single drop of customer-side leakage. Customer-side leakage cannot possibly be 5%. The results of the first fix scheme show us that. Members can read the results for themselves. Customer-side leakage is one of three areas and it is impossible that it only accounts for 5%. It is almost certainly at least 19%. That is where the 57% figure originates. According to Irish Water's data, leakage in the UK is 20% on average, so comparing that with our 57% is like comparing apples and pears. UK leakage is reported on a total basis and includes losses from customers' supply pipes. To compare total losses in the UK to partial losses in Dublin is inappropriate and misleading.

A question was asked about headroom. At the time of the 2015 Project Need report on Irish Water's data, headroom was placed at above 15%. Anyone can read that data, which I can break down for people. The analysis of the Shannon project points to a future peak of 12%. On the radio yesterday and as reported today, the figures were given as 12% and 13% for peaking and headroom, respectively. Those numbers are wrong. In the analysis, they are 15% and 20%. I quickly checked on my calculator, as the other figures were clearly wrong. The 12% and 13% are a calculation of total distribution input, but that is not how Irish Water calculates headroom and peaking or how it is done internationally. Net worth leakage has to be deducted. As such, the figures are actually 15% and 20% of accounted for water. Irish Water's analysis factors in the fact that 35% must be made available every single day of the year over and above average demand. That is the headroom. Our analysis adopts the same requirement.

An Bord Pleanála is constantly referred to as an option for an independent review. It is our understanding that our case cannot be considered by An Bord Pleanála. The board has a limited remit over what matters it can consider - planning and environmental issues and regional development. No part of our case relates to any of those responsibilities. For it to get a fair hearing, An Bord Pleanála would not be valid.

Regarding water ingress, the implication is that there are only outages when there is insufficient water. We know that that is not the case. As shown during Storm Emma, outages are caused by pipes breaking. Water ingress is not limited to a situation in which there is not enough water to enter a property. Outages happen because cast iron pipes burst and they are 140 years old when their life expectancy is 80 to 100 years. Perhaps there are exceptions in some parts of Ireland, but this is the main cause of Dublin's outages and the water ingress.

I thank Ms Kennedy.

Is there something in the policy document on joined-up thinking between agencies, for example, gas?

It was mentioned that the witnesses would revert to the Senator in writing, as that matter was not part of today's discussion.

It is important that the issue be considered. I would be happy as long as they reverted to me.

Is Senator McFadden seeking clarification?

Will the witnesses also revert to me with information on landowners, possible routes and engagement in that regard? It is an important issue. One cannot split a farm or field because it would not be right to do so. I would appreciate some information on that matter.

I thank Ms Kennedy and the witnesses from Irish Water and Ervia for attending. It has been a long session for them. I presume that there will be ongoing engagement on this issue. The level of detail that each of the parties provided was exceptional. We appreciate that, as it helps the committee to make informed decisions.

The subject of our next meeting will be the Hinkley Point C nuclear power plant.

The joint committee adjourned at 12.40 p.m. until 12 noon on Tuesday, 1 May 2018.
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