JOINT COMMITTEE ON THE ENVIRONMENT, TRANSPORT, CULTURE AND THE GAELTACHT debate -
Tuesday, 6 Dec 2011

Supply, Storage and Disposal of Water: Discussion (Resumed)

Chairman

I welcome Professor Frank J. Convery, environmental institute, UCD and Ms Ann Fitzgerald, chief executive, Ms Maria Hurley, director, research and policy and Mr. Fergal O'Leary, assistant director, research and policy, National Consumer Agency.

I draw attention 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 this committee. If they are directed by the committee to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to 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 are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or persons or an entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

The committee is examining the various issues involved in the provision of water services. Today's meeting is specifically concentrating on the effect charges and metering will have on customers. I hope the committee will be able to examine all options in detail and identify what is necessary for the implementation of a fair and equitable system. We need to balance the needs of customers with the need for an efficient water system while reducing waste, protecting the environment and delivering service at an economic and sustainable cost.

As today is budget day, this meeting must end at 3.45 p.m. I am insisting on conciseness and brevity in questions and replies from members and witnesses.

Will Professor Convery make his opening statement?

Professor Frank J. Convery

I am representing two entities, the Earth Institute, UCD, which has been established with programme for research in third-level institutions, PRTLI 5, for which we are very grateful and a new entity being established by Atlantic Philanthropies, the Irish Fiscal Policy Research Centre. In both those entities, we are determined to give as much support and evidence to the Legislature and Members as is possible about the policy choices in environmental areas. I am making this formal offer to the committee and its members.

The proposed national water management agency, Irish Water, should be given lead responsibility for implementing the river basin approach. Currently, there are a bunch of river basin plans and no action. There is a legislative obligation to implement such an approach but it is also the right way to manage water.

Group water schemes and their managers should be given legislative status, recognition and lead roles in their areas of responsibility under this new agency umbrella. The record of these groups is fantastic in how they manage their affairs, their cost-effectiveness, the evidence they bring to bear and, most importantly, how they get community support. It would be a tragedy if, under the new arrangements, they were washed out of the system.

We strongly support metering. In our submission paper, we have put much time and effort into giving evidence from other jurisdictions of their metering regimes, rates and tariffs. It gives much more substantive and analytical evidence than what I have seen to date in the committee's examination of the issue.

In parallel to this, the legislation establishing the agency needs to address the fairness issue directly. In my submission, I have provided some evidence of this in practice. The fairness of polluter pays is compelling to introduce metering. However, for the poorest people it would be a larger share of their disposable income than it would be for rich people.

One issue that has not yet been touched on in the committee's deliberations is the introduction of a system of charges to users of water treatment plants, based on the toxicity of their emissions. My submission cites evidence that shows such an approach would mean far less capital would have to be spent on waste treatment plants with a dramatic improvement in treatment capacity.

Another important and key issue which has not been addressed in the committee's deliberations is the management of our precious water resource as an economic asset. For this, I cited the Food Harvest 2020 policy which calls for a 50% increase in milk output by 2020. However, that document and its aspirations are effectively a dead man walking unless we get simultaneously very smart management of our water systems. Under business as usual, it will run straight into the wall of constraints in terms of water quality, the water framework directive regulations and so on. It will be an unholy mess. The recommendation is that the EPA, Teagasc, the Department of Agriculture, Food and the Marine and the Office of Public Works put their heads together with an integrated economic environment strategy or that ambition, which I very much support, is dead.

The eighth point, and this has not been overtly addressed, is that Irish Water should support innovation and enterprise. When investing a great deal of money and charging people, all kinds of business opportunities arise out of that, both in terms of management systems, technologies and so on. The group water schemes, even the smallest schemes, have been very smart at getting local business people involved in trying to solve problems and so on. Irish Water should have a specific mandate to have an innovation group, essentially to generate enterprise out of the water activity. Of course, that is related directly to the metering issue. There is no business if there is no charging scheme. Those two go together.

The ninth point is the need to pay a great attention to the regulatory framework. Regulatatory failure, as members know, is a big part of the catastrophe that we are now experiencing in terms of our economic performance. The design of the mandate that the regulator gets, the regulatory performance metrics and so on are critical and need to be enshrined in legislation, and not just left as an open question. If one leaves it open, the implications could be catastrophic. If the regulator is not properly resourced or does not do the job properly and has not been given a very clear, unambiguous mandate, we will end up with a big mess. We need to know how much it costs per cubic metre. I have worked through why that information is needed, how to proceed in terms of operating capital and so on.

The final point, which relates to our next contributor is that - this is where the group water scheme experience is so important - it needs to engage with the public in understanding what is happening and why, and engage their interest and enthusiasm in finding solutions. That is an essential prerequisite. Communication is not what we are talking about. It is not a question of Irish Water or whoever telling people what is going on, they need to be actively engaged in what is going on, to understand it and to understand the choices and their implications.

I happened to park in the Dawson Street parking lot to attend this meeting and I got a quote of €2,980 per month to be able to park there. I will pass around a sheet showing what the water bill is for different countries. It ranges from €200 in Italy up to €927 in Denmark. That is the range within which Ireland will operate. If you compare that with the cost of parking in Dawson Street, even the Danish rate, which is a major outlier, is dramatically good value in terms of what one gets for that outlay.

Chairman

I thank Professor Convery for his contribution.

Ms Ann Fitzgerald

I thank the Chairman for the opportunity to meet the members of the joint committee.

Arising from the EU-IMF agreement we have no choice but to pay explicitly for water. That is now Government policy and on that basis, we have framed our response. We will pay explicitly for water and for that reason we think it is very important we set up the system properly. We must take advantage and learn from the experiences in other countries, we must not rush into it, but learn from the mistakes of others, so that whatever we do makes sense. We are looking in particular at implementing best practice in terms of regulation, consumer protection and technology.

Professor Convery referred to regulation, which we believe is critical. We must have a very sound regulatory structure which will be accountable, have key performance indicators that are set out in advance and which are benchmarked, reviewed and externally accountable. Irrespective of how it is done, charging for water explicitly will be unpopular with consumers, particularly at this time, when things are really tough. Although we will be starting off on a flat fee basis, we believe it is critically important that we move as early as possible to metering so that people have control of their usage, there is fairness across the system and that the pathway of progress towards metering should be set out at the earliest possible date, and should not drift into the future.

We have looked and have been involved for some time in making submissions to the various utility regulators and are learning lessons from that. On that basis we believe there should be a very strong, well resourced consumer representation in the regulatory process. We have looked at what happens in the UK, where there is a state-backed and state owned consumer organisation, which is funded by the industry and has a very important role to play in assessing the fairness and the transparency of the charging system. That is a model perhaps that we in this country should look at. We are conscious also of the cost of smart metering, which will come down the line and how this should be done in a sensible way.

We are aware that the Department of the Environment, Community and Local Government and the Commission for Energy Regulation have had discussions on the introduction of smart metering for gas and electricity. Given that this system will last for the next 15 to 20 years, we suggest that a strong effort be made to do all these things together. so that one does not do water metering in a year's time and gas and electricity metering in two years' time. All the utilities should work together and be made coherent. Most importantly, the needs of the most vulnerable in our society should be protected. Not everybody can and not everybody should pay explicitly for water. There needs to be a system introduced whereby those on very low incomes and, we suggest, those in the mortgage arrears resolution process, the MARP, should be protected from this explicit charge. We also must have a system that goes after people who can afford to pay and do not pay because otherwise those who cannot afford to pay are subsidising them. We look in particular at the business sector, where we have been told that up to 50% of businesses in Ireland who are currently metered for water are not paying. Such a system is unsustainable in the context of a national scheme.

We believe that all policies should be assessed against four criteria, namely, fairness, affordability, sustainability and transparency. None of us likes to pay more in taxes, be they explicit or otherwise but if we are to do so, we deserve a system that works well and will bring us into the future. On that basis, I repeat our opening comments that we should learn from the lessons and mistakes made elsewhere.

Chairman

I call Deputy Bannon, but I ask him to restrict himself to questions.

Deputy James Bannon

In regard to Professor Frank Convery's statement on group water schemes, I must declare an interest because I am the chair of a number of group water schemes and I know the valuable work that the group water schemes have carried out over a great number of years. Many areas of the country would not have a water supply except for the group water schemes set up in their area. It is very important that the experience of the group water schemes should be tapped into when framing legislation and the group water scheme committees should have a role in Irish Water at a future date. Many people with a deep well supply are part of a dual system, where they can tap into the main supply or avail of water from their own deep well. There will be a serious problem in getting people to change and adapt if they were to opt for the deep well supplies, which is a private supply.

I do not believe there can be an infringement of private rights by imposing a charge on an independent deep well water supply but there will be a problem where people have dual systems. Will Irish Water carry the cost and facilitate people in their choice of system? There will be a cost because systems were installed when water rates did not exist. I strongly support the arguments put forward by Professor Convery regarding a role for group water schemes.

Professor Frank J. Convery

I thank the Deputy for his comments. As regards the wells issue, unless a person is drawing water from ground water or from surface water or a well system, and if it is not impacting on anybody else, I do not see any logic in charging those who made the investment. That should be clear. As for the cost of dual systems, some kind of formula will need to be worked out to address the non-private section of the water supply system. It would perhaps be useful for Deputy Bannon and others to think through what exactly would be good to have the water schemes do in the context of Irish Water. I have not thought this through and I am probably not familiar enough with conditions on the ground to do it.

I attended the water summit in Croke Park a couple of days ago. Mr. Seán Corrigan from Ballycroy in County Mayo manages a few schemes. If the committee members had the opportunity I would encourage them to invite him to have a talk to the committee. He is very impressive. I like evidence and the association of group water schemes has produced evidence which is very impressive.

Deputy James Bannon

As regards the role of committee members of group water schemes, these are people with an ear to the ground, they have solutions to water quality and they have knowledge of where leaks occur within group water systems. They are the first people to go to as they engage with the communities and they understand the make-up of the scheme, for instance, the location of underground pipes.

Chairman

This must be the last question, Deputy Bannon as we need to move on.

Deputy James Bannon

I have been involved in a group water scheme. I encouraged-----

Chairman

A question, please, Deputy Bannon.

Deputy James Bannon

I have a question. One of the conditions of the group water scheme is that it must have a sufficient number of members and the more people in the scheme, the cheaper the scheme. We encourage people to join up. Will there be a liability for the members of a group water scheme or will the State take over that liability?

Professor Frank J. Convery

Liability for what?

Deputy James Bannon

We encourage people to connect to group water schemes in order to draw down the grants.

Chairman

Deputy Bannon is asking what is the position of the water schemes as regards the creation of Irish Water?

Professor Frank J. Convery

The principle should be established that when, as is true in most cases, group water schemes are operating effectively and efficiently, they should be allowed to continue to do so and the members should be encouraged to do more. A second key role would be to inform the national effort in terms of how to effectively engage with the public. My expertise is limited so I will leave it at that.

Ms Ann Fitzgerald

I agree with Professor Convery about bringing consumers on board and by explaining and educating because this is a long-term project. This work must be done at an early stage and it must be properly resourced.

Deputy Brian Stanley

I have a question about the role of local authorities. The first presentation to the committee seemed to suggest that Irish Water would hold all the cards. I ask what is the role for the local authorities. In my experience, local councillors elected by local communities have an interest in local water supplies and in the protection of those supplies and local authority officials have the expertise and local knowledge to carry out such work. However, the local authorities do not seem to be included in the equation.

It is estimated that in some local authority areas, the water system is losing as much as 50% of the supply due to leakage. A loss of 40% is regarded as normal in many local authority areas. How much is this leakage costing?

Professor Convery stated that metering will be essential but there is no estimate given of the cost of metering. It seems to move from an estimate of €500 million to €1 billion, depending on who is estimating it. Most people now would settle on the higher figure of €1 billion as being more realistic, given the number of households in the State and the level of work involved.

Ms Ann Fitzgerald

Mr. O'Leary will reply to Deputy Stanley.

Mr. Fergal O’Leary

The issue of the involvement of the local authorities is very important. As the Deputy has outlined in his remarks, they have the local experience and if there is a leak in an area, people prefer to telephone a local authority rather than a head office in Dublin. It is very important that local authorities are involved in this process. However, a difficulty arises as to what is the most efficient method for delivering water supplies to what is a relatively small country. Is it a case that every local authority will separately look after its own local areas or can efficiencies be driven by looking at it as a country-wide network and dividing it into areas which have aspects in common? There are seven river basin areas which seem to be self-contained areas and there may be a logic in dividing the country into those areas.

The local authorities are currently responsible for delivering water and they do a fine job. Careful consideration needs to be given to any search for the best and most efficient means of doing this work across the country. This must be planned for the next 20 to 40 years and decisions made now need to be suitable for long-term sustainability.

Deputy Brian Stanley

There are only Six Counties in the North and it has a unitary water supply body. They discovered that when the heavy frost came last year the engineers coming out from Belfast did not know where the leaks were in County Tyrone and in other places and it was a disaster. With relatively modest resources down here, the local authorities, the local town engineer or area engineer and the plumbing staff, had the local knowledge to fix the leaks a lot quicker and a lot cheaper. I believe the unitary system will be a disaster and that seems to be what the delegation favours, just as the Government does.

Mr. Fergal O’Leary

If I might reply, I am not for a moment suggesting that the expertise and knowledge of local authorities should be done away with. Local people like to contact local people in order to have leaks fixed. That is not what I am talking about in this context. I am talking about the over-arching efficiency of the country. The issue of the location of people fixing the leaks and installing water supplies is a different matter but from a national perspective we need to consider the efficiencies when it comes to setting up this system. I do not believe anyone could argue in favour of getting rid of local expertise.

Professor Frank J. Convery

On the local authority issue, one of the big gaps in the current system is that we do not have any idea what is the performance of local authorities. Having done some scouring, I have not found any evidence-based information on performance. While my intuition is that some local authorities are terrific, some are okay and some are desperately poor, I cannot confirm whether I am correct. In my tenth recommendation I suggest we invest considerable effort in determining what have been the costs of supply, treatment, transport and so forth. This should be done before Irish Water is established. There is evidence on these areas and one could produce a story, as it were, about performance. The good performers should be strongly supported while the opposite should apply to poor performers. At present, we do not have the evidence to allow us to make this judgment.

I agree that a wider problem in government at present is that we are sweeping out, as it were, many of those who have considerable on-the-ground information. We will incur substantial additional costs as a result of this approach, which would be a shame in the case of water. We have centralised responsibility for roads in the case of the National Roads Authority and, to a great extent, environmental responsibility in the case of the Environmental Protection Agency. There is a track record of moving to a national structure. While this point was well made, the evidence for supporting the status quo is scant. To take a simple example on the costs of treatment and so forth, significant economies of scale can be achieved in treating waste water, although transporting it is horrendously expensive. One must make a choice between how far one will transport water and so forth. There is no particular logic in making such decisions on the basis of county boundaries because it is much wider than that. I come back to the river basin approach. Unfortunately, the local authorities have not embraced this way of looking at the world. A bottom up model would be for local authorities to come together and decide to manage the issue as a group. Unfortunately, however, they have not done this.

On the second point regarding the cost of leaks, this is another systemic failure. We have invested substantial sums of money in fixing leaks and a great deal of progress has been made on the issue in the greater Dublin area. However, when I sought data on this issue, for example, on how much the work cost and what it achieved, I found that such data are not easily available, although they are probably available somewhere. The conventional wisdom is that when one reaches a figure of between 20% and 25% leakage, it no longer pays to reduce it further as the cost of remedying the problem is greater than the value of the water savings. The evidence relating to the group schemes is very interesting, however, because they have found that this depends entirely on circumstances. For example, some of the group schemes have reduced losses to 12%. They know what they are doing, can do it cheaply and get on with it. They are not trammelled by the types of coefficients that tend to drive some of us. Once one has a price, it becomes much easier to make sensible decisions about how to approach the issue of leakage. Again, however, to address the issue as cheaply as possible for the user, employing people who know what they are doing brings us back to the point that it is critical to ensure local expertise is fully mobilised.

As regards the cost of metering, my submission includes some figures. The price range extends from approximately €50 to €350 per meter. The point I make, however, is that there are significant economies of scale in installing meters and obtaining volume. On that basis, I oppose the British model of opting in or out. One should just proceed to do it. For example, in the case of a residential area with 200 houses, the costs of installing 200 meters in one week is dramatically more effective than having people coming back and forth and so on. Issues arise in this regard. Essentially, the more one pays, the more power and information one gets with the meter and the more control the householder gets. There is a form of trade-off in this respect. Meters are radio controlled rather than mechanically operated and the best of them give real-time consumption information. As such, one knows precisely what is the consumption, day or night, and obtains immediate information on leaks. If there is a leak on a property, the system informs the householder and one does not depend on a central system. That is the range.

I concur that one must introduce metering properly. This may mean it will take five years to complete the process. It would be a mistake to embark on a big dash to complete it in 18 months. One should take as long as required to get it right and give as much credible information as possible to the consumer.

Deputy Gerald Nash

The National Consumer Agency made an interesting recommendation in respect of the fairness agenda that the installation of meters in advance of a roll-out programme should not be encouraged. I am interested in Professor Convery's ideas on how we could prevent such a scenario. We do not want those who are better off securing an advantage in respect of the roll-out of metering by getting ahead of the posse, as it were. Does one adopt a system in which one has a single recognised meter?

Reference was made to exemptions for those who are engaged in the mortgage arrears resolution process. The delegation may be aware that legislation on the proposed household charge refers to exemptions for those who are receiving mortgage interest supplements. These are two separate processes. Those engaged in the mortgage arrears resolution process are not, by definition, in receipt of mortgage interest supplements. What are the views of the delegation on that matter?

Reference was also made to people on low incomes. I would welcome exemptions for those on low incomes, although I do not expect our guests to define what they consider to be a low income given the subjective nature of making such a judgment. Nevertheless, we will have to get into the business of definitions. I would appreciate the delegation's views on this matter.

The delegation referred to a report in The Irish Times of 5 November, reputedly from PricewaterhouseCoopers, which referred to a 50% payment for commercial customers.

Chairman

A division has been called in the Chamber.

Deputy Gerald Nash

I will be brief. The report does not paint an entirely clear picture. I do not believe there is a massive non-payment campaign. Rather, I imagine that partial payments are being made. From my experience as a member of a local authority for 12 years, I am aware that local authorities have been only too willing to accept partial payments from businesses which are experiencing difficulties. This is a general point on which I do not necessarily expect a response.

Deputy Paudie Coffey

I will be brief given that a vote has been called in the Chamber. I concur with Mr. O'Leary that there should be a national overview. Local authorities can make a positive contribution in this regard. It is important that local knowledge is captured before it leaves local authorities. We also require some form of national asset management system which identifies the value of the existing pipe network. There is no point imposing charges on anyone until we realise how much the system will cost. The more efficient the system is, the less we will have to charge. As is the case with ESB Networks, every single pipe should be mapped and its capacity and the date on which it was last maintained recorded on a universally accessible national database. I am not sure if Professor Convery has done any studies on this issue. Such a database would serve as a framework if the maintenance and location of each pipe was recorded and the value of the pipe network in every locality established. It would also eliminate the ad hoc delivery of water services. I am interested in the views of the delegation on this matter.

Professor Convery referred to the Food Harvest 2020 strategy, which relates to a growth area on which we must capitalise. It is estimated that dairy processing plants will need to be much larger. What is Professor Convery's view on that?

Chairman

We must get answers to the Deputies' questions.

Deputy Paudie Coffey

I will leave it at that. The delegations might give me their views on that issue.

Chairman

We have about six minutes before returning. I suggest that we suspend now and resume immediately after the vote has been completed.

Sitting suspended at 3 p.m. and resumed at 3.20 p.m.

Chairman

Professor Convery to continue.

Professor Frank J. Convery

On the equity issue that Deputy Nash raised, in my report I suggest, as other countries do, identifying the bottom 10% of people for particular treatment. I have thought more about that percentage and it should be 20% given various things. It needs serious research. We slid into a fairly half baked approach to this. Dealing with people who cannot pay and distinguishing them from those who will not pay is critical. It is a big challenge and a governance wide issue. It should be given explicit attention in the legislation and be part of the regulator's job to make sure it is addressed.

On whether people should be encouraged to go ahead with metering, my view is that they should not. It is important that there is consistency so that what is being measured is calibrated properly and is consistent. I should not have an advantage over someone else in terms of what is measured and how it is measured. I see no advantage in encouraging people to press ahead with metering. There will be very big economies of scale in purchase and installation but people who install meters themselves will pay far more then a universal scheme will cost.

I completely agree with the view that the asset needs to be documented very carefully. Recommendation No. 10 is exactly what Deputy Coffey suggested. We need to understand everything about the existing asset, such as where it is, what it is worth, what works and what does not and what is its age and condition. When we are considering new investments we need to separate those things out.

There is a link between the way the cost to business of water is structured and metering. Between 60% to 80% of the costs are fixed, except in the case of a large new investment such as Dublin. That is why utilities are pressing for a fixed fee model because they love having fixed reliable income and do not want variability where some consumers invest heavily in efficient systems. The way to square that circle is to split the tariff between a fixed fee and a variable fee which varies according to consumption.

Ms Ann Fitzgerald

Professor Convery's submission and mine could be merged in many instances. The system will be with us for 20, 30 or 40 years and should have a strong consumer input. It is critical that happens from the outset and the research and consumer voice is not catching up afterwards when it is too late. We do not have all the answers but we are pointing out some things, such as the necessity of making provision for those on low incomes and those with a structured approach to mortgage issues, because the system will not be fair otherwise. We agree people should not be encouraged to jump the queue and install meters before there is a structured approach.

On who pays for those who do not pay but should pay, we were told recently by a supplier in the Galway area that approximately 14% of businesses are not paying their bills, which is not acceptable. We have to cater for those who cannot pay but also have to cater for those who should pay and are not.

The bottom line is that we must find a way, through levies, Irish water or whatever it will be called, to have a strong consumer voice from the very beginning and have key performance indicators at regular intervals, one of which might be how the water authority, in whatever way it is structured, caters for waste water. Some 40% or 50% is getting lost in the system.

Professor Frank J. Convery

As a consumer a key element should be that the regulator is completely independent of Irish water.

Ms Ann Fitzgerald

Yes.

Professor Frank J. Convery

We have a tradition in Ireland of an agency doing its own consumer surveys which nearly always say everything is wonderful. It should be completely independent and survey different target groups.

Group schemes should be drawn on heavily in terms of buy-in. They have virtually 100% compliance because the people own the scheme and the water. They know what they are doing and if they have a problem they have to address it. It is a huge asset on which the Irish policy system needs to draw heavily.

Ms Ann Fitzgerald

In 2005 the previous Government and the consumer strategy group which I chaired made proposals on economic regulation. There were very strong recommendations, as Professor Convery said, that the consumer voice should be heard independently. It applied to electricity as well as water. We should have a strong, properly resourced, State-funded consumer voice to address these issues which could be part of the National Consumer Agency. They should not be bundled into what the regulator does because its primary concern is gas, electricity or water and how it is transmitted.

Chairman

Is Ms Fitzgerald saying the board of Irish water should have a consumer representative on it?

Ms Ann Fitzgerald

No, we are saying there should be a separate role for consumer input into what the board of Irish water does.

Deputy Dessie Ellis

I thank the witnesses for the presentations. I will touch on some things they have mentioned. The Government has been talking about introducing a flat charge of between €300 and €500 which will probably happen in the next couple of years. In the future metering will be introduced. A unit cost of €50 to €350 was mentioned and the cost of installation would be extra.

The witnesses indicated that many systems are operated by remote control. I would not like someone to have control over water at the touch of a button and cut people off. Ms Fitzgerald might have an opinion on that. There would have to be very strict regulation of such a system because it would be easy to cut someone off if he or she did not pay.

Chairman

I ask the Deputy to ask questions or I will cut him off.

Deputy Dessie Ellis

Are the witnesses in favour of a national waiver? Do they think we should have a package for people who harvest rainwater for purification? Should that be rolled out in urban and rural areas? There should be a waiver system in place for schools and community projects.

Deputy Marcella Corcoran Kennedy

I thank the witnesses for their presentations. I agree with Ms Fitzgerald on the need for a strong consumer input. What ideas does she have on the practicalities of how consumers could have an input? How to do the witnesses envisage group schemes fitting into the overall picture? They are the owners of the schemes and protect their schemes. How can we get them to buy into Irish Water?

Chairman

The pricing system in place for businesses is set in cubic metres. Should household consumers pay the same rate for water as businesses or should there be domestic and business rates? Is the overall judgment of Professor Convery that the creation of Irish Water is a positive development and an opportunity to tidy up the current fragmented service? In terms of creating an equitable system, would we be better off? Households will be billed on a house by house basis. The current methodology for inclusion of houses is the register of electors which is a household register as opposed to a PPS-based register. Would it make sense to move to the latter type in order to have a better billing system?

Low income households were mentioned, with some sort of derogation or allowance to be provided. However, has consideration been given to households where there might be specific medical difficulties or household compositions that differ from the low income qualification but which would also need a type of allowance?

Deputy Catherine Murphy

May I ask one question?

Chairman

Go ahead.

Deputy Catherine Murphy

I apologise that I was not here for the presentations although I heard one of them. This charge is very different from those for electricity and gas in that people actually consume what comes into the house in regard to those. We have been told in recent weeks at some of the meetings we have had with different groups that some 60% of water loss happens on the household side in the form of leakages, etc. Have the delegates considered that from the consumer's point of view? If there is not the wherewithal to fix leaks or even awareness they exist this will be a significant issue. Perhaps the delegates might consider that and revert to the committee.

Ms Ann Fitzgerald

We do not have all the answers today. Coming before the committee has forced us to look at this issue, something we had not done. It is really important. The members have raised a series of issues that need to be looked at properly and researched. I would be really foolish if I were to give on the spot answers and I will not do so.

The suggestion for a PPS-based system seems to make sense as does the suggestion that people should be able to control what they use rather than dribble it away. I do not believe people should be responsible for loss that occurs between the entrance to their house and the actual house. That must be handled somehow as must many other issues.

However, from the consumer point of view, we want people involved from the very beginning, as Professor Convery suggested. To have that there must be a real information campaign about what is happening. There must be an education campaign around sustainability. We must be able to answer consumers' questions. There must be research prior to that so that we do not speak off the top of our heads which is no use to anybody. All this costs money and time and requires people. We believe this is such a big and important issue, however, and one which has such a long lifespan that the Government system should be willing to fund and resource it. We should take all the questions that came up today and ask ourselves how we should address them, what the answers are and to what other issues they give rise. We should not rush this because it is there for the long term. It will certainly be there long after I am gone.

Chairman

I thank Ms Fitzgerald. Has Professor Convery a reply?

Professor Frank J. Convery

On the meter cost raised by Deputy Ellis, the hard number I have came a few days ago from the group scheme in Ballycroy in County Mayo which got meters installed for an all-in price of €250. They seem to be state-of-the-art because they allow identification of leaks on and off property. That is a real figure although price might come down a little if there was volume. On the other hand, the ability of such groups to negotiate hard deals is impressive so I consider that price reasonable.

In terms of where water is measured, Deputy Murphy's question is really interesting. My view is that it should be measured at the boundary, which is what the groups do. I document the savings in the group schemes, much of which seems to come from their metering just at the point where the water hits the property. They find huge leaks most of which can be fixed very cheaply. It is interesting that they can intervene and essentially reduce the cost. Of course, they charge people for water so the landowner or property owner gets a horrendous bill and will ask what is going on. The meter shows that 50% of the usage is occurring inside the scheme's area so it will be charged unless it does something about it. Doing something is critical. It would be nice if the legislation addressed this. There needs to be a loop whereby consumers are actively supported in responding to challenges.

I mentioned my report in which I mentioned Aurora, Colorado, for example, where, when price increased steeply as quantity went up grants were immediately made available to put in double-flush toilets. If one bought a washing machine that had low water demand one got support; similarly if one needed to invest in a piping scheme, and so on. The whole ethos was helping the consumer. It is important that this be in the legislation. Irish Water will, inevitably, come under commercial ownership so, in a sense, people wasting water and paying for it will be in its interest, in a narrow sense. The legislation needs to be structured so that potential does not occur.

I do not know the answer to the question about the nature of the base. However, I know that much time and effort is going into the postal code digitisation process, using remote sensing and GIS and so on. That is where the future documentation of metering lies - tied into the postal code system. I do not know enough about it to know what is best but that is probably from where the base will come.

Chairman

I thank Professor Convery and Ms Fitzgerald.

As an overview of the committee's present position, we hope to conclude the examination of the issue in January, including matters arising from the delegates' comments today. I can assure them we, too, are learning our way through this issue. It is not as clear as water, if I may use that pun. We will draw towards making some findings and recommendations some time in February. If the delegates wish to observe the proceedings as they move on, or even see what has happened to date, or if, at a later time, they wish to submit further information with regard to consumer matters as they arise, I extend an invitation to them to do so. We would welcome that and be grateful.

That concludes the committee's consideration of this stage of the topic. Is that agreed?

Deputy Dessie Ellis

I have one further question. Apart from the metering issue, there are old estates in Whitehall and Finglas East that have lead piping. There has been considerable leakage there, with enormous added costs and this will have to be tackled. In addition, there are environmental issues in respect of the actual lead and the effect it has on the water supply. That must be factored in and we should not forget it.

Chairman

Is it agreed to conclude? I thank Professor Convery, Ms Fitzgerald, Ms Hurley and Mr. O' Leary for assisting the committee in its deliberations.

The joint committee adjourned at 3.38 p.m. until 10 a.m. on Thursday, 8 December 2011.