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Seanad Éireann debate -
Wednesday, 23 Jan 2013

Vol. 220 No. 4

Water Services Bill 2013: Second Stage

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

Is mór an onóir dom a bheith anseo arís don díospóireacht ar an ábhar tábhachtach seo - uisce agus soláthar uisce don tír go léir. Tá rud speisialta ag gabháil leis an mBille seo agus tá súil agam go mbeidh díospóireacht iomlán againn agus go mbeidh gach éinne in ann dóthain cainte a dhéanamh agus dóthain ceisteanna a chur orm ag Céim an Choiste.

This is an important Bill. I emphasise that notwithstanding the timeframe within which the Bill will be moving, I assure the House that as far as I am concerned Committee Stage should proceed for as long and in as much detail as people wish to examine every aspect of the Bill. If the Committee Stage time is abridged we would be happy to accept amendments with the co-operation and assistance of the administration of the Houses of the Oireachtas Commission to ensure that any point, issue or argument that people wish to make will be fully and properly debated, discussed and voted on, if necessary.

I am pleased to bring the Water Services Bill 2013 before the Seanad today. It is the first legislative milestone in the Government's strategy for the reform of water services provision in Ireland. It provides for the establishment of Irish Water or Uisce Éireann as a subsidiary of Bord Gáis under the Companies Acts. The two organisation names will be interchangeable.

The programme for Government provides for progressive and considerable structural reforms of the water services sector. There are three interrelated components to the Government's proposed reforms for the water services sector and to date the following key decisions have been taken by Government: to establish Irish Water as an independent State-owned company within the Bord Gáis group, based on a public utility model; to introduce a sustainable funding model to support much needed investment in this sector, to include the introduction of water charges for domestic users; and to establish an independent economic regulator for water services, a function being assigned to the Commission for Energy Regulation, CER.

Our water resources are a significant national asset and there have been significant improvements in the quality and capacity of our water and wastewater infrastructure during the past decade. This has been achieved on foot of substantial Exchequer investment through successive water services investment programmes. The Environmental Protection Agency noted in its publication, Ireland's Environment 2012: An Assessment, that our water quality is good relative to other EU countries. A decade earlier the EPA Environment in Focus 2002 report noted that the quality of our rivers was "unacceptably poor" while our groundwater had "unacceptably high levels of contamination". Maintaining these improvements in quality and standards will be a considerable challenge in the coming years against the backdrop of severe restrictions on the public finances, which have seriously impacted on the Government's ability to maintain the previous levels of capital investment. Our valuable water resources also serve to support the success of many water-dependent sectors of the economy, most notably the pharma-chemical, information and communications technology and food and drink sectors.

The key objective of the Government's water reform programme is to put in place structures and funding arrangements to ensure that we have a world-class water and wastewater infrastructure which meets all environmental and public health standards and which is well positioned to attract new foreign direct investment and to support job creation in indigenous companies as well.

The EU-IMF programme of financial support for Ireland includes commitments to introduce domestic water charges and to establish a national water utility. While the Government is committed to introducing water charges, it considers that volumetric-based charging is the fairest approach to charging. The annual cost of water services in Ireland is €1.2 billion. Ireland is the only country in the OECD that does not charge for domestic water. The OECD stated in its review of our environmental performance in 2010 that the absence of volumetric charging gives domestic users no incentive to save water and that it perpetuates a low awareness of the real cost of water services.

The Government has decided that Irish Water should be responsible for the installation of water meters for households connected to public water supplies and the Bill provides the company with the necessary powers to achieve this. The metering programme will commence later this year and it will be accompanied by a comprehensive public information campaign.

There is considerable public dissatisfaction with the levels of unaccounted-for water, including leakage from water distribution mains. Investment in recent years has been prioritised on mains rehabilitation and leakage reduction. The metering programme will assist greatly in improving the management of water supply networks and will assist in targeting investment. Experience internationally and in Ireland with the non-domestic sector and private group water schemes indicates that metering will promote water efficiency and conservation by users. The Government is keen to ensure that the interests of consumers will be protected when domestic water charges commence. We intend to provide the Commission for Energy Regulation with the necessary powers to regulate the water sector and to determine the appropriate level of charges.

The Bill provides the commission with the power to advise the Government on the development of policy regarding the regulation of water services.

The intention is that the new policy will be given legislative effect later this year when the Commission will be given full regulatory powers, including the authority to set water tariffs.

I would also like to address the impact of the reforms on the local authority sector and, in particular, on local authority employees. Given the scale and complexity of change involved in this reform process, engagement with staff and unions is critically important and a specific structure, the Irish Water consultative group, has been put in place to facilitate this. Good progress is being made on clarifying issues for staff. During the period to the end of 2017, other than situations where existing staff are recruited to new positions in Irish Water, existing staff will remain employees of local authorities working either under service-level agreements or working on a secondment basis to Irish Water. Where employees are working under a service-level agreement they will carry out their existing role and this arrangement will continue until at least 2017 unless otherwise agreed at the Irish Water consultative group.

Some existing water functions are likely to transfer to Irish Water on establishment or on a phased basis in the period 2014 to 2017. These largely relate to management roles and roles associated with the delivery of the capital programme. It is envisaged that the staff currently carrying out these functions would move to Irish Water on secondment in the period to 2017 and would, therefore, remain as employees of the relevant local authority. During this period, some staff could transfer to Irish Water by agreement. The framework for such secondments or transfers would be considered at the Irish Water consultative group.

Before I set out the provisions of the Bill I would like to address some of the matters which are not specifically provided for in this Bill but which will, subject to Government approval, be comprehensively addressed in more detailed legislation which is under development and which will be brought forward in a separate Bill in the second half of this year. As I said earlier, the Commission for Energy Regulation will be given full regulatory powers later this year. These powers will include the power to examine all costs incurred by Irish Water in the delivery of water services and to determine what levels of tariffs are appropriate for Irish Water to charge for the services. The regulator will be responsible for setting standards of performance for Irish Water and for ensuring that appropriate customer protection measures are in place.

The next Bill will confer powers on Irish Water for the provision of water services which are currently the responsibility of the county and city councils. This would include, inter alia, power to provide water and wastewater services directly, responsibility for strategic planning and delivering investment programmes and powers of examination and survey. It will also provide for the transfer of local authority water assets and associated liabilities to Irish Water. The establishment of an asset base will be an important step in ensuring that Irish Water will, in the future, be able to access financial markets to secure funds for capital investment. The accountability of the company to the Oireachtas will also be addressed in more detail, as well as its interaction with local government and the functions that local government discharges in respect of planning, economic development and emergency management. I know from speaking to members from all sides of both Houses of the Oireachtas that these are critical issues which I assure members will be addressed in the next phase of the legislative programme.

I will now outline the purpose and operation of each section of the Bill. Sections 1 and 2 set out the Title of the Bill and commencement provisions and definitions of terms used in the Bill. Section 3 is a standard provision enabling the expenses incurred by the Minister for the Environment, Community and Local Government for the administration of this legislation to be paid out of moneys provided by the Oireachtas. Section 4 provides that Bord Gáis shall establish a subsidiary company, Irish Water, under the Companies Acts, following consultation with the relevant Ministers. Section 5 outlines that the subsidiary will be known as Uisce Éireann in Irish and Irish Water in English. The shares in the company are to be distributed between Bord Gáis, the Minister for the Environment, Community and Local Government and the Minister for Finance. Bord Gáis will be allocated the only voting share which it will not be allowed to alter without the consent of the two Ministers. The two Ministers will share the remaining shares between them. This share structure will ensure that Irish Water remains in full public State ownership.

Section 6 sets out conditions relating to the memorandum and articles of association of the company and provides that they must be approved by the Minister for the Environment, Community and Local Government, with the consent of the relevant Ministers. Any amendment to the memorandum or articles of association can only be made with ministerial approval. Section 7 is a standard provision and sets out the circumstances in which a director of Irish Water will no longer be qualified and must cease to be a director. Section 8 outlines the standard prohibitions on directors or members of staff of Irish Water holding political office, either at national or European level. Sections 9 and 10 are also standard provisions setting out the requirements for the disclosure of interests by directors or staff of Irish Water of any material interest, in the case of directors, in any arrangement or agreement for consideration of Irish Water and in the case of staff, in their capacity as employees.

Section 11 prohibits the unauthorised disclosure of confidential information by a director, member of staff, consultant or adviser to Irish Water, unless authorised to do so. This prohibition will not apply to the disclosure of confidential information to Bord Gáis however. Confidential information for the purposes of this section includes information expressed by Irish Water to be confidential either as regards particular information or a particular class of information or description and proposals of a commercial nature or any tenders submitted to Irish Water.

Section 12 provides that Bord Gáis and Irish Water may borrow money, subject to the consent of the Minister for the Environment, Community and Local Government, the Minister for Communications, Energy and Natural Resources, the Minister for Finance and the Minister for Public Expenditure and Reform. The aggregate borrowings of Bord Gáis and Irish Water for the purpose of this legislation must not exceed €500 million. The section specifies that the borrowing limit is additional to the limits for Bord Gáis set out in section 23 of the Gas Act 1976. Money borrowed in currencies other than the euro will be deemed equivalent subject to the rate of exchange at the time of the borrowing. Money borrowed by Bord Gáis under this section may subsequently be lent to Irish Water.

Section 13 provides that the Minister for the Environment, Community and Local Government may, for the purposes of this legislation, make grants out of money provided by the Oireachtas to Irish Water, Bord Gáis or the Commission for Energy Regulation. Section 14 provides that subsections (1) and (2) of section 21 of the Gas Act shall apply to Bord Gáis, such that the approval of the Minister for the Environment, Community and Local Government and the Minister for Public Expenditure and Reform will be required for capital expenditure by Irish Water above a level to be specified.

Section 15 relates to the accounts of Irish Water. It contains standard provisions on the maintenance by and audit of the accounts of Irish Water and the submission of audited accounts and any other accounts to the Minister for the Environment, Community and Local Government. The accounts must then be laid before each House of the Oireachtas. The section also sets out the arrangements for the appointment by Irish Water of an auditor to audit the accounts and for the ministerial approval of the fees of the auditor. Section 16 provides that by 30 June each year, Irish Water will prepare and submit to the Minister for the Environment, Community and Local Government and the Minister for Communications, Energy and Natural Resources, a report on the performance of its activities in the area of water services in the preceding year. The report must then be laid before each House of the Oireachtas.

Sections 17 to 21 deal with the water metering programme and confers powers on Bord Gáis and the new company as metering authorities. I referred earlier to the Government's position regarding the fairness of volumetric-based charging. In addition to this, the domestic water metering programme will have significant economic and employment benefits. The programme, which is the largest and most ambitious programme of its kind that we are aware of, will commence later this year. It will be preceded by the surveying of domestic water connections at the external boundary of households connected to public water supplies. This work will be undertaken by the local authorities. This surveying work will commence across all local authorities shortly. On the issue of the meter installation works, the Department of the Environment, Community and Local Government and Bord Gáis have already commenced the procurement procedures for the sub-contractors, regional management contractors and equipment for the metering programme, which will be rolled out over a three-year period. Section 17 provides that a reference to a metering authority in sections 17 to 21 means Bord Gáis or Irish Water.

Section 18 provides that the functions of a water services authority with regard to the installation of water meters for dwellings may be carried out by a metering authority in addition to a water services authority. It also provides that other functions of a water services authority may also be carried out by Bord Gáis and Irish Water to the extent that their performance is necessary for the installation of water meters for dwellings. These would include, for example, the power to lay pipes and the power to interrupt water supplies at sections 41 and 51 of the 2007 Act, respectively.

Section 19 provides that the provisions in section 41 of the Water Services Act 2007 relating to the installation of pipes shall apply to a metering authority, subject to the removal of a requirement to obtain the consent of a road authority, which applies when the water services authority is not the road authority. The water services authorities are the 34 city and county councils which are also road authorities. The installation of pipes by Bord Gáis and Irish Water will be exempt from the need to obtain planning permission. This is necessary to avoid causing delays to the metering programme and, having regard to the level of excavation work required to install a meter, planning permission is unnecessary. The Department and Bord Gáis will agree a protocol with the Department of Transport, Tourism and Sport and the local authorities which will specify the standards for the installation works nationwide. This protocol will ensure the highest standards will be applied and will address issues such as traffic management, the quality required for footpath and road reinstatement and health and safety requirements. We all know from our local authority experiences the appalling mess occasionally made in footpath and road reinstatements and the disgraceful way in which some roads were left. This is a key issue.

Section 20 specifies that water meters will remain in the ownership of Irish Water and that Irish Water may not dispose of any property vested in it without ministerial consent. Section 21 states the provisions of section 29 of the Water Services Act of 2007 shall apply to Bord Gáis and Irish Water in the same way as they apply to a water services authority. This provides for the immunity of these bodies and their employees from prosecution arising from carrying out their functions. Section 22 is a standard provision and provides that Bord Gáis and Irish Water will have all the powers necessary or expedient for the performance of their functions.

In order to create an accurate database of the names and addresses of domestic customers, Irish Water will be given the power to request information from other public and commercial bodies which hold similar information. Section 23, therefore, provides that Irish Water and Bord Gáis may request a relevant person to provide them with such information that they may require to perform their functions or that they could be expected to require if additional functions, similar to those vested in a water services authority, were conferred on them. A relevant person may be a local authority, the Private Residential Tenancies Board, the Property Services Regulatory Authority, the holder for the time being of a licence granted under section 14 of the Electricity Regulation Act 1999, the Local Government Management Agency, the Revenue Commissioners, the Minister for Social Protection and any other person prescribed by order made by the Minister for the Environment, Community and Local Government after consulting the Data Protection Commissioner. A relevant person must comply with a request under this section. The section amends sections 6 and 7 of the Water Services Act 2007 such that Bord Gáis and Irish Water will have the same powers to obtain information as a water services authority, as well as the same entitlement to obtain information on ownership as a water services authority. This provision will not exempt Irish Water from the requirements of data protection legislation. Irish Water will agree a protocol with the Office of the Data Protection Commissioner to address the exchange and treatment of any personal information. Discussions have been entered into with that office during the drafting of the legislation and the section includes a provision that the Data Protection Commissioner must be consulted before any proposal is made to extend the list of relevant persons.

Section 24 provides that the Commission for Energy Regulation may do all things necessary or expedient for the purpose of preparing for the performance of water regulatory functions under any future enactment. The functions include functions relating to the setting of charges for water services, the specification of minimum standards of service for the provision of water services and the protection of the interests of a person in receipt of water services. The section also states the commission may advise the Government on the development of policy for regulating the provision of water services. Under the section, the commission may consult Bord Gáis, Irish Water, the water services authorities or any person prescribed by order by the Minister for the Environment, Community and Local Government.

Following enactment of the Bill, the commission will be commencing its work. At the earliest opportunity it will undertake public consultations on a range of issues, including the development of tariff structures, and prepare guidelines on consumer protection measures.

Sections 25 and 26 remove the existing prohibition on charging households for water services as set out in section 105 of the Water Services Act 2007 and section 4 of the Local Government (Financial Provisions) (No. 2) Act 1983, as amended by section 12 of the Local Government (Financial Provisions) Act 1997. Section 105 of the 2007 Act has not been commenced and will not be commenced prior to the introduction of charges, which will not be before 1 January 2014. This amendment is only being made to enable Bord Gáis and Irish Water to undertake functions relating to domestic water charges such as the development of a customer database, the establishment of a billing system and the commencement of consultations with the public and other stakeholders. Section 25 transfers the functions of a water services authority relating to charging dwellings for water services from the water services authorities to Bord Gáis and Irish Water, while section 26 provides for the removal of the statutory prohibition by amending the Local Government (Financial Provisions) Acts.

Section 27 provides for the amendment of section 15 of the Gas Act 1976 in order that Bord Gáis shall keep accounts of moneys received or expended by it in the performance of its functions in relation to this legislation. Section 28 provides that Bord Gáis must submit a report on its activities in the area of water services to the Minister for the Environment, Community and Local Government and the Minister for Communications, Energy and Natural Resources. The report shall be submitted no later than 30 June each year and arrangements will be made as soon as possible after receipt of the report for copies to be laid before each House of the Oireachtas.

Section 29 relates to directions issued by the Minister for the Environment, Community and Local Government. Directions may be issued, subject to the approval of the Minister for Communications, Energy and Natural Resources, to Bord Gáis or Irish Water in relation to the performance of their functions and they must comply with a direction issued to them. It is not the intention that ministerial directions would be issued to the companies, or that such directions would be necessary. However, as the Bill is effectively interim legislation pending the introduction of a more comprehensive Bill later this year, the section is considered prudent to ensure Government policy is implemented appropriately by the companies.

As I stated, this is the first legislative milestone in the Government's strategy for the reform of water services provision in Ireland. It is the first step in what is undoubtedly one of the most fundamental reforms of public services provision. I look forward to engaging with Members on the provisions of the Bill. An important part of this initiative is the creation of 2,000 jobs in each of the next three years as water meters and attendant infrastructure are installed. This will give a significant boost to local economies everywhere. A call centre will also be established to offer customers a point of contact. I understand the call centre will create between 300 and 400 jobs. This investment will, therefore, offer significant benefits in terms of job creation, as well as improving water services.

I welcome the Minister of State and acknowledge his comments that the Bill will not be rushed and that he is open to accepting amendments as it progresses. I regret that the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, who is primarily responsible for this legislation is not with us, but he has sent a very capable replacement.

On a point of order, he is the responsible Minister.

Whatever our disagreements - I will come to Senator Denis Landy and the Labour Party - we all agree that this is an important development and appreciate the need to protect and invest in our water sources. That is why Fianna Fáil is deeply concerned about the entire process and the thinking which has given rise to the short Bill before us. For the past year we have witnessed considerable internal confusion in the Cabinet about the cost of this project. There has been no detail on how much consumers will pay and no public tendering for the new body. The relevant Oireachtas committee has been bypassed and the public consultation process has been limited and flawed.

None of this augurs well.

There were three hours of debate.

The Taoiseach has been unable to give any detail or proper answers about his Government's proposals for introducing water charging and dismantling the current water service system. In their haste to hand the multi-million euro contract for water and wastewater services to Bord Gáis, the Taoiseach and the Minister, Deputy Hogan, could not even wait for the Oireachtas committee to complete its report. While many of us were alarmed by this haste, at least it suggested that the Government had a plan and was pursuing it with some vigour and energy. Sadly, our faith was ill placed because the Taoiseach and his Ministers were unable to answer the most basic questions about this plan. It became clear that the Bord Gáis announcement had more to do with the need to redirect embarrassing questions away from the Government than creating a better system for citizens.

Last April, the Taoiseach boldly announced that there will be no job losses. I genuinely hope he is right, but all the commentary and analysis suggests otherwise. According to the PricewaterhouseCoopers report that was commissioned by the Government, when the new structure is complete, synergies mean that the number of people employed in providing local water and wastewater services "will be significantly lower than the 4,278 deployed today". Can the Minister of State, Deputy O'Dowd, tell us if he agrees with the Taoiseach's claim that there will be no job losses? I know he alluded to this issue in his contribution. Perhaps he can clarify the matter further on the basis of the comments I have made. Does he agree with the Government's consultants and the officials in his Department? The experience of our nearest neighbour in the North is illuminating. In 2005-06, some 2,100 people were employed in local water services in Northern Ireland. Its equivalent of the Bord Gáis experiment was launched in April 2007. There are now just 1,306 people employed in water and wastewater services there. If anything like the same level of synergies is applied here, we will be looking at between 1,600 and 1,700 job losses. Can the Minister of State comment on the likely numbers? I hope he can say something to quell the uncertainty being experienced by current employees.

The Government regards the creation of Irish Water and the roll-out of metering as vital parts of its job stimulus package. However, I am uneasy about its decision to press ahead with investments in this area without clarifying the cost. Senators on this side of the House believe the Government is putting the cart before the horse by bringing this Bill before the House at this juncture. It has not yet passed the legislation that will secure the right of subcontractors to ensure they fully benefit from the stimulus. Can the Minister of State offer us some clarity on this matter?

We are deeply concerned about how much families will be asked to pay. Surely the ultimate cost to the customer should be one of the Government's first considerations. We have yet to get any detail on the level of free allowances and the total cost to the consumer. This continuing uncertainty about how much people will have to pay for water metering can be attributed to the contradictory statements which have been made by various Cabinet members. The Minister, Deputy Hogan, has announced that people will receive their first water bills by the end of 2014 and has estimated that the annual cost could reach €400 per household. The same Minister originally stated that the Government would implement water charging by 2014. Reports in September 2012 indicated that metering would not be completed until 2016.

The Government has at least three firmly stated, yet mutually contradictory, positions on installation charges. In April 2012, the Taoiseach said:

There will not be an installation charge for the householder because that cost will be covered as a loan from the National Pensions Reserve Fund to the Department. There will be a cost for the meter itself.

An official in the Department of the Environment, Community and Local Government said the cost of buying and installing water meters will be passed on to households and not paid for by the Exchequer. He said it will be "similar to how other regulated utilities are funded globally" in so far as "the cost of the meters and the delivery of service will be passed on to the consumers". The third and most recently stated position was outlined by the Tánaiste on RTE's "This Week" when he said "No decision has yet been made on how water meters are to be paid for". Could the Minister of State clarify the situation? All of this demonstrates that the initial statements made by the Minister, Deputy Hogan, were clearly lacking any factual basis. The general uncertainty about a range of matters casts a huge doubt over this entire policy. The Government has decided to sell part of Bord Gáis Éireann and, because of its expertise in metering and billing households, to give it responsibility for the new water utility. Does the Minister of State accept that the public finds it hard not to see this as a key step on the road to privatisation?

I would like to respond to Senator Landy and his Labour Party colleagues in this House. I appreciate that they have difficulty with the Bill as it stands. It requires them to endure yet another U-turn on their pre-election promises to the people of Ireland. I am sure the Labour Party Senators, including Senator Landy, do not need to be reminded of their pre-election commitments and statements. However, I would like to put some of them on the record of the House. The 2011 Labour Party election manifesto stated that "Labour does not favour water charges". On 18 February of the same year, the current Minister, Deputy Howlin, said "We are not in favour of water charges". On 28 June 2010, the current Tánaiste, Deputy Gilmore, told the Irish Examiner:

I’m against water charging. Water is a necessity. I’ve always believed essential services like water should be delivered as a public service. A flat household charge would be unfair and does not discriminate between houses with five bathrooms or none, and metering is unworkable.

Fianna Fáil urges the Government to stop prevaricating and to set out the full cost and implications of its plan for water services. As I have outlined, we have genuine concerns about the plans for water charges. We have been told that apartments may be excluded from metering, but we have seen no details about how they will be charged. We are deeply worried that there is no guarantee on conservation or water infrastructure. The Government does not appear to have learned the lessons of the household charge fiasco and the septic tank fiasco. It is rushing ahead with the creation of Irish Water and rolling out water meters without clearly considering the costs involved to consumers.

I regret that Fianna Fáil will not be in a position to support this Bill on Second Stage. I note that section 8 of the Bill provides, as the Minister of State said, for the standard prohibitions on Irish Water directors or staff members holding political office at national or European levels. I hope that does not prevent county councillors from holding directorships. Perhaps the Minister of State can clarify whether they will be covered by the prohibition that will apply to national and European politicians. I hope they will not be excluded. I accept that my party provided for such a prohibition in the past and that it was wrong to do so. I welcome the Minister of State, Deputy O'Dowd, to the House once again. I regret that his senior ministerial colleague has put him out here like a lamb to the slaughter. He is very welcome.

I welcome the Minister of State who is responsible for bringing this Bill through the House today. We are always talking about the devolution of functions to local authorities, but this is an example of a Minister devolving a function to a Minister of State. I welcome the Bill, which provides for the establishment of Uisce Éireann, as the Minister of State has said. I intend to use the name "Uisce Éireann" only. Senator Ó Clochartaigh and I proposed in this House that it be called Uisce Éireann and this was agreed in consultation with the Joint Committee on Environment, Culture and the Gaeltacht. I am delighted that the Uisce Éireann proposal was accepted. All other boards are known by one name only. I refer, for example, to boards like Bord Bia, Bord Gáis, Bord na Móna and Bord Fáilte, etc. If two names are used, the Irish-language one will eventually be dropped. Iarraim ar an Aire Stáit, mar gheall gurb í 2013 bliain na Gaeilge, a chinntiú go mbeidh "Uisce Éireann" an t-aon ainm amháin a bheidh in úsáid. Gabhaim míle buíochas leis.

One of the biggest issues facing the Government is the provision of good quality water in sufficient quantities. It is not just about metering households. It is about jobs and all of the other things mentioned by the previous speaker. When the much-coveted foreign direct investors come here, they have an insatiable demand for water. The Intel plant in County Kildare is an example of that.

We have to ensure sustainable, high quality water. As the Minister of State said, it is proposed to transfer from 34 local authorities to a new national water authority. As I said yesterday when we were talking about functions, we do not need 34 local authorities looking after water that comes out of one tap. The people want to be assured that the people delivering the water deliver high quality water. They do not need to know there are 34 local authorities looking after the same thing in 34 different ways. What they want is satisfaction and a good supply of water coming out of the tap. If it is not there or there is bad quality, we will hear about it but we will never be asked which one of the 34 delivered it. If it is delivered well, the consumer will be happy.
I will come to the issue of pricing later. The efficient, clean, cost effective delivery of water services is the important policy. There has been historic under-investment in water and ageing and poor quality infrastructure that should have been corrected years ago. I ask the last speaker to listen to this point. The leakage in this country is over 50%. We have spent huge amounts of good money treating water, and it costs more to treat than to deliver the water, yet we then let it run willy-nilly around the place. As an ex-member of South Dublin County Council, I am glad to say it was the best performing county council in Ireland for non-leakage from pipes. I will not mention the worst one, although it was down the country-----

We are up the country.

It was not the Senator’s county and I will not shame the county by mentioning it, but there is a league table. It is important there is investment to ensure this leakage stops, and it is important to get the money for this from somewhere. I will deal later with the question of incentives for consumers and problems such as people letting the taps run.

The Minister of State spoke of the job creation element and the people who will be employed, whereas Senator Wilson took up the issue of those who will lose their jobs. In fact, with regard to the provision of water, it is not the counting of the numbers of people but how the job is done. We all talk about efficiency and local delivery of local public services. Numbers are not the only game. It is important that everybody gets a good job but also that everybody does a good job in the job they are in. That is what the Croke Park agreement will be looking at in regard to ensuring that output and input is matched in terms of service delivery.

It does not matter about the potential 1,600 people who may lose their jobs.

No, the Minister has stated there will be different-----

Senator Keane, without interruption.

Some climate change models suggest Ireland may experience weather conditions in the future that could jeopardise security of our water supply. The CSO estimates that Ireland’s population could, in the highest scenario, rise by 1.5 million up to 2021. The EU water framework directive requires that EU member states introduce a river basin approach for the management of water and the achievement of good ecological status by 2015. We dealt yesterday with river basin management through the local authority Bill. These are important drivers in regard to water investment and ensuring the appropriate modifications are made in the delivery of water services in Ireland.

Each party was asked to make a submission to the Oireachtas environment committee. The Oireachtas committee did not ignore this, although some Fianna Fáil members did ignore it, given a sub-committee was also set up with representatives of each party. I am sorry they did not turn up. Maybe they are missing out on that-----

Excuse me, the Government went ahead-----

They did not turn up.

Senator Keane, without interruption.

She is inviting interruption.

They need a camera before they will turn up.

The Government went ahead with a decision to give it to Bord Gáis Éireann without allowing the Oireachtas committee the courtesy of waiting for its report.

Order, please, Senator Wilson.

What the committee reported back was irrelevant because the Government had made its decision.

Senator Keane, without interruption.

Privatisation was mentioned. I am delighted the utility will remain a public resource, as the Minister has stated. This has been accommodated and the utility will be accountable to the Oireachtas. This was outlined last October in the Department’s water sector reform implementation strategy, which includes a section that addresses the joint committee’s 2012 report on water provision.

It was also stated in the implementation strategy that all profits from Irish Water should be ring-fenced and re-invested to ensure there is a re-invigorated, sustainable, clean water supply and water infrastructure, and that it is highly regulated to guarantee excellent quality for the consumer. This is commendable and is a positive step in the development of our nation's water provision. The Government must be credited with honouring the commitment it made in the programme for Government, where it stated it was establishing a new water utility, which is what we are doing here today.

The decision to re-organise the delivery and funding of the water sector, including through the establishment of the new water utility, can be traced to a number of key policy documents. Will you please listen to this, Senator?

I am doing my best.

Through the Chair, Senator Keane.

The programme of financial support for Ireland with the EU, the IMF and the ECB includes a commitment to undertake an independent assessment of the transfer of responsibility for the water services from the local authority to a water utility, Uisce Éireann, which is a public utility, and prepare proposals for the implementation, as appropriate.

It should have been publicly tendered.

Fianna Fáil signed up to it so I do not know what its members are talking about now. Are they reversing policy on the hoof now?

It should have been publicly tendered.

Senator Keane, without interruption.

She is interrupting herself.

We would have extended to the joint committee the courtesy of waiting for its report.

I spoke about water leakage and the cost this imposes on the customer. A staggering 36% of the total usage is leakage, which is a significant problem in terms of the international standards. Surprisingly, it has also highlighted the difficulties of implementing the river basin regional section.

PwC carried out a very good study which outlines the various options. In particular, it is important we consider the various payment options. The ancient Greeks looked at fire, air, earth and water as basic essentials. When regulations are being made, I suggest one would look at free usage for moderate consumption and to then have responsible usage after that. The regulator has been given powers to come back to us on this point.

There is no economic regulation of the water sector in Ireland at present. Currently, water charges for non-domestic use are set by 34 individual local authorities, with the rate charged varying significantly between them. It goes from €1.75 per cu. m in Kildare to €3.04 per cu. m in Wicklow, so there is no fairness in that people throughout the country pay tax. If people are paying for water, they will conserve it and they will pay for what they use, not for what they abuse. At present, the commercial side is paying varying amounts across the country.

In this context, the Government plans to introduce water charges and water metering. Charging by volume of water used is considered by most to be one of the fairest approaches but this requires the installation of water meters, about which the Minister of State has spoken. I note the advertisement of regional contracts has taken place. When will the advertisements for the local contracts be published?

The Senator has one minute.

In that case, I will not go through the principal theme of the Bill but there a few questions I wish to ask. The question arises all the time of how the metering of apartments will be managed and the question of free usage also arises frequently. To look at this fairly, we must particularly consider families who are in need, families with sick patients, the elderly and so on. When will we see this going to the regulator? If the regulator is let loose, important elements might be forgotten. The Minister of State might explain how the Government will deal with that. People who need water, need it, whether they can afford it. We have to ensure it is available to everybody who needs it, and we have to ensure everybody who can pay does pay, and that there is no abuse. I must conclude on that point.

I did not get to say half of what I wanted to say.

I welcome the Minister of State, who is an old colleague and friend, to the House. I also welcome the legislation. It is quite appropriate that we should pay for what we use. I am less impressed by the fact that this appears to have been done at the diktat of the troika. I do not care for introducing this kind of force majeure into it. I have a few comments about the legislation. In general, it is perfectly appropriate that we pay for what we use. I hope that payment will be ring fenced and will go back into upgrading the provision of water services. The management of water resources over many decades by a series of Governments has been completely inadequate. As a resource, water is certainly one material of which we have an abundance. One only has to look outside the window of this House almost any day of the week to see that we do not suffer from a lack of rainfall so there is plenty of water. It just has not been managed appropriately.

There are two kinds of leaks. There are leaks on domestic property, which have been emphasised by the Minister of State and other speakers, but there is also the question of leaks on the property of the local authorities, particularly in Dublin. The mains water supplies in Dublin run under the streets and in some areas, particularly the north inner city, many of these have been left for a considerable number of years without any upgrading. I remember when they dug up wooden pipes from the 18th century, which is laughable in a capital city. We need an integrated approach and to look at the problem. We need to look not just at people in private property but at the responsibilities of the local authorities and whatever water management agency is involved.

I have considerable concerns about the fact that there was no proper tendering for this. This is bad governance. There is no other word for it because one must leave things over to tender. It has been boldly stated that Bord Gáis is the best and most expert group but I wonder. Coincidentally, I received my gas bill today and I have hardly turned the gas on at all. I got an estimated bill of €987 or thereabouts. I do not think I used that amount of gas and would be very surprised if I did. Grilling a few rashers does not usually come to that amount. Bord Gáis has difficulty accessing the meter. It installed it so that is a wonderful and classic example of expertise. I wonder at its expertise in this area.

Bord Gáis will franchise out the installation of the meters. This is fair enough but I hope there will be a bit of quality control because it is very important that the contractors involved in this process have the correct skills. I am speaking from a slightly parochial point of view but this is particularly important in areas of classical Georgian Dublin. For example, it is very important that the 18th century hand-turned granite pavings sets should be maintained. This has almost never happened. In particular, when it is franchised out, everybody denies any responsibility for it. When one has entire streets listed in the public interest, very particular care should be taken to ensure that this part of our heritage is not destroyed. It is not something that immediately strikes the average person as being an important part of our heritage. It is not like a painting in the National Gallery but it is significant and part of the integrity of what remains of the 18th-century city.

In respect of Bord Gáis, metering and pavements, Bord Gáis was appointed without tender because of its alleged expertise, of which I have yet to be convinced. If it is going to do it, why in the name of God does it not take the opportunity to install proper gas meters at the same time? Will there ever be joined-up metering? It is in the same area as the ESB. One of the things I like about these water meters is the fact that we are told they can be read electronically. This is brilliant and superb as the owner does not have to be disturbed and one does not have to be in or get these idiotic notices where the date is never filled in and which have a box that does not tally with the number on one's box. I am all in favour of that. Instead of digging up the streets three times, why does it not dig them up once so there can be some kind of universal metering and the same machine can read electricity, gas and water meters? I know this might be a slightly adventurous step but in the long run, it saves money, helps create jobs and shows an intelligent approach. If we are moving in this direction and this is the future, why limp along one step at a time and do water today, gas tomorrow and electricity the day after and dig up the streets all over again half a dozen times? I suggest that we look and see if it is not possible to do this.

I gather the installation of the meters is going to tender so at least one element is being tendered for appropriately. Again, I hope we have some expertise in this area because I hate to think that some continental engineering company would unload a collection of dross on us and we would have a system like that which pertained to the e-voting machines and have to pay for the warehousing of a few million water meters. I agree with the previous speaker who instanced situations where there were different kinds of charges all over the country for various kinds of meters. If we are buying in bulk from a supplier, and I presume we will buy the same machines from one single supplier which may or may not subcontract, I hope that we use every ounce of our muscle to get a bargain price for those meters because it will be a significant contract for whatever company or group gets it. We should ensure we use this lever of bulk buying to say we want meters of real quality at a good price.

What happens if the meters fail due to weather conditions, be they flooding which would be ironic but possible, or frost? Who is responsible? Are we going to hit the householder again? I daresay I will be able to pay for it and am very happy to do so in the same way I would be happy to pay bin charges if we had any decent bin companies. I greatly regret that some local authorities were permitted to privatise these services because it has been a 100% disaster. I hope we can get some clarity with regard to who must pay for any repairs. The point I was getting to was slightly different. In the current economic situation, there may be people who are being hit repeatedly, including by the property tax and the second home tax, which will not affect the poorest people or me. I wonder how on earth people in mortgage arrears who are hit by more and more bills are going to keep paying. Every week, we come into this House and there is another €200 or €100 being put onto household bills. We may be lucky because we have reasonable incomes although I am sure some Members are under pressure because they have made commitments before. We should not exempt ourselves and say that we do not suffer anything. There are Members in both Houses who are put to the pin of their collar because they gave commitments during the good days but what about the people out there?

Can they afford it and what will happen if they cannot? For example, will there be a proposal to cut them off? The Minister of State is shaking his head, which I hope can be translated into a "No".

It is not the intention to cut anybody off.

I thank the Minister of State for his courtesy and for putting that on the record. The average cost was computed by an independent source at €370 per year.

I welcome the legislation. By and large, it is a good idea, and I welcome that we should pay for what we consume. Any excess in the money raised should be used for the water services. I hope that any profits could be put towards quality control of water because we have had a very bad record in certain areas of the country in terms of bacterial pollution and so on. If we are going this way the system needs to be efficient and must secure good quality water for all our citizens.

I hope it is not too late to ask the Minister of State if it is possible to put all the utilities to work together and thereby ensure we do not have a situation that I regard as entirely ironic. I am in the Chamber today listening to the Minister of State telling us that Bord Gáis has the best people to do this work because they have such expertise. Yet they put in a meter for me that is entirely inaccessible and sent me a daft bill. There were a number of situations in the old days where things were very ramshackle and supplies were run through a house, all being joint until they got to the back of the house and were fitted to somebody else out there. That situation is not the responsibility of the current owners but of whichever nincompoop put in the system. It may have been the local authority or an unscrupulous landlord. Why should people in that situation be deprived of the efficiencies of metering? There must be some degree of flexibility here. This is an opportunity to resolve these ramshackle amateur situations where there is inappropriately shared water supply. I hope that issue will also be tackled.

The Minister of State was referred to in the same context as lambs, which stretches belief to its extremity. He will be familiar with the sheep difficulties that happened in the Cooley Mountains but to describe him as a lamb is a little far-fetched.

There are tough lambs in the Cooley.

It is a dangerous metaphor. He will be called a dead sheep next.

Senator Landy, without interruption.

He supports the interruptions.

I commend the Minister of State for using the words Uisce Éireann and Water Ireland interchangably. As one who struggles with the cúpla focal I am very pleased he sought to use both terms. I recognise that, as Senator Keane observed, Uisce Éireann may be a more appropriate term and perhaps we should begin to use it when the rest of the legislation follows.

I also commend my colleague, Senator Wilson, for his very selective and detailed research.

"Selective" being the operative word.

There seems to be an antipathy, whether from the research department of Fianna Fáil or the laptops with which its members were provided, when it comes to producing any research regarding the troika.

I recognise the work the Minister of State has done, and also that it is part of his brief to deal with this issue as he is Minister of State with responsibility for NewERA. The environment committee has had many discussions on this specific issue, right down to the detail of meters and whether it may be possible to install meters that could be read electronically, as well as other details in regard to apartment blocks and how to install meters there. We have heard a great deal of detail. It is a pity the research department did not spit out that detail when the response was being prepared.

Is the Senator saying the Tánaiste did not make those comments?

This legislation establishes Water Ireland-Uisce Éireann and also sets up a funding model that will drive future investment into the upgrading of water services and systems throughout the country. It will also establish an independent economic regulator. In addition, 2,000 jobs will be created, albeit in the short term. Today the Minister of State confirmed to us the retention of staff within the local authority system up to 2017. I will ask for their retention beyond that date.

I commend Senator Wilson's party for its past ability to put EU Structural Funds to good use in upgrading water treatment plants throughout the country over many years. In my town raw sewage used to flow into the river at five different points but in recent years we have had a full new water system that sends back crystal clear water to the River Suir. This is a perfect example of what the country has achieved and strives to continue to achieve. The availability of good quality water is a driver of job creation. We saw that only yesterday with the agreement of an extension on the part of Intel. We have seen it in the food and drinks sector and in the biopharmacy area.

Why are we where we are today? We are there because under the EU-IMF financial support package this country was required to charge for water and a charging system had to be introduced. Again, I must remind my learned colleague of this because he seems to have an amnesiac tendency in this area. It is like saying that although one has signed up to buy a car when it is delivered, one will not pay for it because one does not like the smell of the air freshener inside. The Opposition is trying to wipe away all that it signed up to and did, blaming it on others.

The use of water metering and pay per usage is the fairest system, provided there is a built-in system of waivers, in some shape or form, for people who are on low incomes and cannot afford to pay. It is good from the point of view of conservation and best use of water. It will create a different mindset in this country towards the valuable asset of water. For too long water has been wasted and there has been no regard for the cost of providing water. In my town alone, which has an annual budget of €5 million, the cost per annum of water provision is €900,000, or 18% of the annual budget. That cost must be realised and the money must be found. We signed up to the troika and agreed to charge for water and must proceed with that.

I welcome the comments of the Minister of State. I have had previous interaction with him and discussions at committee level on the staff in local authorities which is a matter of great concern to me. I welcome that he has set up a consultative group, which is a very good approach to the issue. I welcome that staff have job security until 2017. What will happen after that date?

The Bill to transfer assets is separate and will follow this legislation. Does this mean that all services, land rights access, use of bore holes, etc., for which local authorities have signed agreements in order that the new legislation can be implemented, will have to be negotiated with individual landowners? That is a very important issue throughout rural Ireland because there are many kinds of individual arrangements, agreements and legal contracts in place. That must be clarified.

Will the new water company, Uisce Éireann or Water Ireland, be accountable to the elected members of local authorities? Will the company report annually to the local authorities and provide direct responses to representations made by local elected members? Will company representatives be available to discuss the infrastructural needs of individual local authorities and their districts? This is paramount in regard to rural development across many spheres, including jobs.

I have a number of specific questions on different sections although this is not a full opportunity to ask them and there will be another.

Will the Minister explain the purpose of the provision in section 5 in regard to the voting share for Bord Gáis Éireann? Under the provisions of section 7, how many directors will be appointed to the new water company and how will they be appointed?

I welcome the reference by Senator Wilson to the fact that national elected political representatives will not be on the board. I ask the Minister to clarify the position of people elected to local bodies?

In section 13, there is a reference to "make grants out of moneys provided by the Oireachtas to — (b) the Board, or". I would like to have the meaning of subsection (b) clarified? It seems as a stand alone organisation, Bord Gáis will have financial autonomy and my reading of this subsection suggests the Government will make available grants to Bord Gáis.

Sections 17 to 20 deal with the provisions of meters. I would like to hear more on how the meters will be installed. In support of Senator Norris's contribution, could we have more information on it? In one section of the explanatory memorandum it states the work will be undertaken by the local authorities, in another part it seems to suggest there will be a separate metering authority. I would like to have this clarified?

Another issue that concerns me, and I acknowledge the Minister of State has done it for the right reasons, is the fact that as no planning permission will be required for the erection of the infrastructure, will the public interest and people's private rights be protected as a result? At present the ESB under the 1927 Act has waiver rights over all lands to ensure it can go in and provide its services. To the best of my knowledge that is the only company that has such a right. If we are introducing this provision, it is a very serious issue. I have personal knowledge of how the 1927 Act is applied by the ESB. The question is whether way leave entitlements provisions are included in the Bill? This is a very important question as the private citizen will want to know the answer to that question.

It is proposed to install in the first instance 1 million meters, that leaves 300,000 metres that cannot be installed. How will houses in which no metres have been installed be assessed for payment?

Senator Rónán Mullen has five minutes

Go raibh mile maith agat a Leas-Chathaoirleach. Cuirim fáilte roimh an Aire.

The Water Services Bill 2013 under discussion here today is to be commended as a first step in an attempt to deal with several key areas that have required urgent attention for a number of years. It is in line with the EU Water Framework Directive 2000, which aims to promote sustainable water use based on the long-term protection of available water resources, and is a key driver of water legislation in Ireland and across the EU. The main objectives of the directive are to achieve a good level of water quality by 2015.

Ever since the abolition of water charges by a coalition Government in 1996 the OECD, the ESRI, the Commission on Taxation and other organisations, have urged their reinstatement in some form. Indeed we are all aware of the need to engage with the search for a more efficient, cost-effective and environmentally sustainable system of water conservation and treatment in our country.

Most especially however, given the current economic climate, priority must be given to achieving these goals in a way that is socially just and equitable. There are three areas of concern to which I would draw the Minister's attention. First, the consequences for social justice which the creation of Irish Water by the Bill provides for, in particular how it proposes to determine and collect payment for services through the installation of a metering system. The Minister is no doubt aware that several models of payment were proposed in the position paper of January last year from the Department of the Environment, Community and Local Government. The system of metering is to its credit a fair and sustainable method with significant advantages over the other models proposed. That can only be the case if the necessary safeguards are in place such as those found in the UK, for example, where low income metered customers with a high essential use of water receive support from a special "watersure" tariff. This caps the bills of metered households, particularly those in receipt of a qualifying means-tested benefit or tax credit at the level of the average bill for the company's operating area where the household either has three or more children living at home under the age of 19 or somebody in the household has a medical condition which necessitates a high essential use of water.

Although the programme for Government proposes a similar safeguard where water charges are to be based on usage "above a free allowance", no decision has yet been taken on the level of allowance to be provided and how it will be funded. I would suggest that there is a certain urgency to this decision being made given the cost will be in the region of €1 billion, a cost that will now be transferred directly to Irish householders who are already struggling to meet day-to-day living costs, as other Members have stated.

The Bill in its provision for the creation of Irish Water does so by eliminating the role of local authorities which have heretofore provided services relating to water charges and aims instead to centralise this process. This has the potential to further erode confidence in local democratic institutions. An excellent and cogent submission on this issue was made by Galway County Council to the Department of the Environment, Community and Local Government. In arguing its case Galway County Council stated: "The council is of the view that the proposal will seriously undermine the local government system of which water services are a significant component and have a negative impact generally on local representation and accountability". In its submission to the Minister for the Environment, Community and Local Government the body makes the following points: locally-elected representatives will no longer have a role in water services provision, operation and management, further eroding the local government system and the principles of local representation; the role of Galway County Council in relation to planning and economic development will be seriously undermined unless it can retain a meaningful influence on decision making with regard to allocation of water service resources; and economic development will suffer if the infrastructural needs of local authorities are not only fully recognised but satisfactorily addressed.

All of these points could be equally made by other local authorities around the country, especially if we keep in mind the recent chaos surrounding the attempt to centralise the student grant system under SUSI, which like this Water Services Bill was designed with the aim of "supervising and accelerating" the State's delivery of a service.

The Bill is clearly the proposed legislative instrument which will give effect to the sense of urgency contained in the above mentioned 2012 position paper. However, many of the predicates which underlie that paper and indeed the other significant document which has informed this discussion, the 2008 Forfás document "Assessment of Water and Waste Water Services for Enterprise", have either been superseded by economic realities or are now hypothetical at best. For example, the 2008 Forfás document envisioned continued and rapid expansion of enterprise and urban settlement that would be heavily reliant on water well in to the future. Whatever else we may say it is highly unlikely this country will either need or require the amount of housing and thus water delivery services that was then predicted, and cited approvingly in the 2012 position paper.

Indeed Forfás itself in stating its methodological approach acknowledges that the model upon which the sense of urgency surrounding the delivery of water services is built is based on a number of key assumptions, such as the CSO's forecasts for population growth, the level of water demand per capita and current and future enterprise development, all of which must be scaled back given the new reality we find ourselves in. This gives us a measure of breathing space.

I welcome the Bill and share the Government's commitment to realise its key objectives to maximise value for money and to facilitate the scope for the participation of SMEs in the overall programme. Even if I have reservations about the authority under which such metering will reside, I welcome and share in the commitment to an environmentally sustainable solution, which can only benefit everybody.

I welcome and share the commitment to use one of our most plentiful natural resources to place us in a position of strategic importance in regard to industry and enterprise. I hope we can keep in mind the broader concerns for our greatest resource of all, namely, the people. Go raibh maith agat.

Go raibh maith agat a Leas-Chathaoirligh agus fearaim fáilte roimh an Aire ar ais go dtí an tSeanad. Is é mo thuairim gurb é Uisce Éireann an t-ainm ar cheart a chur ar an gcomhlucht.

Measuring water consumption by metering is without doubt the fairest way to charge people for a very valuable asset. One pays on the basis of the exact usage. Those who use the most water will obviously pay more.

Other Senators have mentioned that it will identify the locations of serious leaks in fields or farms and people will soon want to know why their water charges are so exorbitant. Mary Jo down the road with a house and family of the same size will discover leaks. I previously worked in the ESB and customers were given every opportunity to pay outstanding bills such as by means of deferred payments. Disconnection was regarded as a last resort. One can do without electricity by using a gas cooker or a Tilly lamp but one will not put up with this for too long. However, what will happen when a householder fails to pay the metered charge for water? I can envisage a house without an electricity supply, but I cannot envisage a household without a water supply for any length of time. Is it a case of going back to having a well or a toilet at the bottom of the garden? It costs €1 a day for the average household, which is great value for money. This is great value for a commodity that takes an amount of money to produce.

The point about refusing access to the property to the person installing a water meter was referred to by Senator Denis Landy. Is there wayleave to install a meter on private property? I understand the fine for barring access could amount to €5,000. I hope this will not arise too frequently.

I welcome the Minister of State. Water charges are not something new as a subject for political discourse or debate. It is not a subject that fell into the lap of the Government as part of the discussions between Fine Gael and the Labour Party. The previous Government signed up to the national recovery plan for the period 2011 to 2015 which envisaged the introduction of water charges. The Government is adopting and implementing these policies with the support of the troika.

The context is very important. People in this state are now paying more taxes than ever before. Over the course of the past five budgets they have been hit with pay cuts and more taxes, both direct and indirect. They have seen their income cut through pay cuts, especially those in the public and private sectors. The universal social charge has had a big impact on many families. At the time the Minister of State's party said it was a bad idea, but the charge was not reversed. In fact, a raft of new charges were placed on top of the universal social charge. The property tax has now been introduced and people are being asked to pay, on average, between €300 and €500. As if that is not enough, the Government is introducing water charges for householders. I do not think it understands how difficult it is for many families to pay all of these bills.

We are moving to a very cumbersome and bureaucratic system in how services are to be funded. It is also a very right-wing way, an aspect I will deal with. Everything is to be paid separately and ability to pay is not being considered, nor is social solidarity. It is a case of pay as you go and pay as you use. This is Margaret Thatcher's policy being delivered by the two Government parties. On top of water charges, people will also pay separately for school books and school transport and for their waste to be collected. They are being asked to pay a property tax. If everything else is being paid for separately, what is this for? They are paying more in income tax than ever before, but they are being told that the money raised is no longer to be used to pay for water or local government services which must be paid for separately. The Government is under-estimating the strength of opposition to the family home tax and water charges. This is a matter it will need to consider.

Senator Terry Brennan made the point that the fairest way to charge for water was on the basis of water usage. Let us test that theory. Is it fair that a big family on a low income must pay the same amount as a small family on a high income for using the same amount of water? I do not believe it is. Water is a precious commodity, the provision of which should be funded through general taxation. People should not be asked to pay on the basis of what they use. When one follows the logic of that argument, wealthy people will pay exactly the same amount as everybody else for all of these services. A reduction in income tax for the wealthy means they will not pay what they should be paying and we all end up paying the same amount as wealthy individuals, even though the Government has not asked any of them to pay his or her fair share. The Government parties will be back on the doorsteps at the next general election and I am sure these issues will ring very loudly in their ears when they knock on doors and have to explain why that is the case. We know that the hook on which the Government wishes to hang the charge is conservation, of which I am in favour as water is a precious commodity.

Education must play a significant part. We must ensure resources are provided to ensure people use water adequately. If the Government is serious about water conservation, it should invest the money it will spend on water meters to fix some of the problems in the mains system.

That is a very important point. We will do it.

Perhaps the Minister of State might charge us for the meters-----

We will fix the leaks.

There are a lot of leaks that need to be fixed in the Government's policies, of which water charges is only one. The Minister of State would be better off using the money to fix the problems in the mains system. He needs to understand many families simply do not have the money to give. At the end of this process, having paid more taxes than ever before, including the property tax and water charges, more for school services and private health insurance, the people will have no more to give. It is wrong, socially, economically and morally. This is not fair, nor is it progressive; rather, it is regressive. Sinn Féin will be opposing the Bill on that basis.

I welcome the Minister of State and will be supporting the Bill because when it comes to supplying water, I do not mind paying for it as long as it is a quality product. That is my biggest issue about water supply.

Senator Cáit Keane referred to a particular county - I am assuming she was referring to mine - in which there was a problem with leaking pipes. We have a serious problem with old pipes in County Roscommon and as a result, the quality of water supplied is extremely poor. It is so bad that my wife can smell it coming from the tap. As a result, we do not use it. Some of us are even reluctant to wash ourselves with it because it is so bad.

I hope it is not mixed with whiskey.

If the quality of water supplied can be improved, as a user, I would save money on bottled water which I have to buy in the supermarket, week in, week out. The quality of water supplied is so poor we cannot even use it to make a cup of tea.

Will it be the case that whatever it costs to rectify all the leaking pipes and bad piping, people will have to pay for it? When will we have an indication about the amount of money needed and what it will cost users? It is important that people know that.
Senator Cullinane said his piece and ran out the door. To a degree there is something in what he said with regard to large families and low incomes and small families and large incomes. Perhaps some mechanism could be put in place such as an allowance for larger families which they could use first and which would be free. There may be scope for something similar to what is in place for farmers whereby farms receive X amount of water for domestic usage for free and after that they are charged. Some of these things should be examined.
I will conclude by talking to my good friend, Senator Wilson. He seems to have a remarkably short memory, as pointed out by Senator Landy, because Fianna Fáil signed up for water charges with the troika. I imagine the party's supporters have forgotten the damage that it has done by now. I remind Senator Wilson of one debate we had on the budget-----

I imagine Labour Party supporters have not forgotten what it promised.

Senator Kelly, without interruption. However, I advise you not to be provocative.

Let them enjoy it while they can.

Through the Chair, please. I am allowing you-----

He is leaving it down to the home team.

Let them interact while they can.

Senator Kelly without interruption. Senator Mooney, you are a senior Member here and you should know not to interrupt.

Thank you for the kind comments.


Allow Senator Kelly to conclude.

I realise Fianna Fáil is taking every opportunity to vote against things that it supported initially, including the budget measures which, unfortunately, I did not remind them about at the time. In the budget the Minister for Social Protection, Deputy Joan Burton, reduced the spend on social welfare by €500 million to €19.5 billion, but Fianna Fáil had signed up with the troika to reduce the spend on social welfare to €18.5 billion, some €1 billion more of a reduction. I realise it is not relevant to water services but I questioned those in Fianna Fáil about where it would take the extra money out of social welfare and they refused to answer.


I would like to know because Fianna Fáil made a big play about taking €6 per week off the respite care grant.

Senator Kelly, this is not an interaction with the Opposition.

We are not here to talk about septic tank charge.

Where was Fianna Fáil going to get the extra €1 billion?

Those in the Labour Party proposed it to their partners, but they would not accept it.

Senator Mooney, no interruptions please.

When people initially support something they should not change horses in mid-stream.

Those in the Labour Party sought to make a change to the universal social charge but their friends in government would not accept it.

Senator O'Brien has five minutes.

I welcome the Minister of State. I am pleased to follow Senator Kelly but I wish to stick to parts of the Bill. I have several questions for the Minister of State. I have been on record for many years in support of metering of water.

It is a broad church.

No, fan noméid. The question is how and when it is done, what the priorities are, and to ensure it is fair and metered. The Minister of State will know that in the north east, where we both live, in Fingal and Louth County Council there are issues with the loss of water before it gets to the taps and the consumer. I realise there are details in the capital programme on the spend. What investment does the Minister of State believe will be required in the coming two or three years to reduce the level of wastage of fresh water before it gets to the citizen? That is important and people need to know that.

I want to know how the capital budget will be managed. Does the Minister of State envisage that it will be managed by Uisce Éireann or will it be done through the Department of Communications, Energy and Natural Resources by way of NewERA? How will it be managed? That question is fundamental. There is a significant issue in this regard and confusion arises for many people because we do not know exactly. I have heard that in 2014 the Government will begin to charge people. However, not all houses will be metered by then and the head of the Irish Water has said as much clearly. What happens in the interim? I fundamentally disagree with a flat water charge in the interim.

There will not be one.

Perhaps the Minister of State will expand on that in his reply. I fundamentally disagree with the idea, but this debate provides an opportunity for the Minister of State to give clarity on many of the areas where, frankly, there has been a good deal of confusion. We could blame the devil and all, but the fact is that people are not clear on how it will work.

I have a major problem with the installation of water meters. One reason I will not support the Bill on Second Stage relates to the structure and how this will be set up. PricewaterhouseCoopers carried out a report, commissioned by the Government, on how the process should be managed. The firm clearly stated that there should be an independent Government-owned or State-owned entity. Instead, the operation is being given to a semi-State body, which will probably be a private entity in future, Bord Gáis Éireann, without any real tendering process. It was only a question of whether it would be Bord Gáis or Bord na Móna. I have grave concerns for the future and for how this will impact on people who work every day of the week in local authorities and who do a really good job.

I understand there have been three bursts of water pipes in Fingal and these problems are continuing as we speak. We regularly receive e-mails with such news. We know the infrastructure is poor in many places. We have seen improvements in recent years, including up to this winter, whereby main trunk water mains are being replaced in conjunction with other works taking place and that is sensible. I hope I will be proven wrong because water is a valuable resource for all of us and it is important that we get it right, but I do not have confidence in how we will manage the transition and ensure that we upgrade our fresh water system to the point where it should be.

There are issues with regard to the costs of the installation of the meters. We were informed at the start that the consumer and the public would not be paying for the installation. Then we learned that they would be paying by way of a loan from the National Pensions Reserve Fund in the region of €450 million, which would be charged at interest over 20 years at approximately €40 per annum. Effectively this will amount to a cost of €340 to the consumer. Consumers will be paying for water, which they did not have to pay for previously and now, as I understand it, they will also be paying for the installation of the meters with an interest rate charged as well. That is not equitable or fair. Before that is introduced the Government must provide absolute clarity on the degree of free water usage and this should be done on a per person per household basis. It should take into account the demographics within each household as well. If there are young children in a household it will use more water; this depends on age groups in certain households.

This needs to be worked out and it cannot be rushed and that is our problem with the Bill. The Minister of State holds a different view and I respect that. We need to consider whether we are rushing ahead with this. If we start on the basis that we will not get metering right at the beginning then public confidence will be lost. Those are some of the questions I have put to the Minister of State I know he will answer them and I appreciate that.

With the indulgence of the Leas-Chathaoirleach, I call on the Minister of State to examine the tendering process for the installation of water meters. There is a real concern that the small and medium-sized Irish business sector will be bounced out of this process. I have already received complaints about the pre-tendering qualification stage because of the level of turnover required for a tendering business. If we are serious about using this exercise to create 2,000 jobs, do we want to give those jobs to the large organisations? Should we not give them to the local businesses that are well trained to do the work and that can do it? I call on the Minister of State to examine the levels of turnover set down for businesses to tender for jobs that we all know they can do. I would be far happier, as would Senator Landy, for a business in Carrick-on-Suir to get the job to carry out the work in that area or for a business in Swords which has the expertise to get it for the surrounding area there. I do not want a large foreign conglomerate to come in and install all of these meters and I call on the Minister of State to examine that.

I extend my welcome to the Minister of State. This is very important and I support the setting up of the new water authority. Many questions have been asked and we have dealt with them thus far. Local people are working with local authorities at the moment and some of them are concerned about their jobs. Will their jobs be maintained and will they be kept on by the local authority, or will they be working for the new board? Clarity for these people is important.

It is also very important to use local contractors and subcontractors - local people with local knowledge - to install meters, a matter touched on by my colleagues. In many cases, such persons have already installed some of the systems and pipework to be used. It is important to keep them in the loop. If we are to create 2,000 jobs, it is important to keep as many of them as possible in local areas. Problems arose in the past, particularly in Border areas, when people from outside the State came into local authorities and sublet some of the work to local people. They skipped off before the job was finished without paying the local subcontractor. I have raised a number of such cases in the House. We must be careful not to allow this to happen in the future.

I understand the current free usage allowance is 50,000 gallons. Perhaps it would be a good idea to examine the limit as it applies to families, particularly those on low incomes, for whom we should do something.

A point was made about the importance of not having to dig up the road a number of times when one is doing a job. When works are being done on the roadway, the opportunity should be taken to inspect the water system and make sure it is being looked after.

Problems may be encountered by farmers who have several plots of land and are paying for several meters. I suggest there be a single universal charge for farmers. The north-south and east-west variations are unfair. There should, therefore, be a universal charge for water across the country.

Like Senator Darragh O'Brien, I believe the introduction of water charges is inevitable. It has been on the cards for a couple of decades. Ireland is the only country in Europe that does not impose a water charge, which does not necessarily make it right.

On this side of the House, we have been attempting to tease out exactly how this structure will work. We accept the inevitable principle that it will happen. I am surprised, however, especially in the light of yesterday's debate on local government reform, that there has been so little discussion on the Government side of the Government's concept of establishing a separate water authority. I fail to understand why this and the previous Government seem to have engaged in a headlong rush to remove powers from politicians at local and national level. They have chosen to establish quangos at arm's length from the Government, only to find that such bodies have very little accountability. Like Senator Darragh O'Brien, I firmly believe it is inevitable that a future Government will decide to put the water authority up for sale. Regardless of the Government's wishes in this regard, the family jewels will be sold at some point to generate income.

That will not happen.

It has happened in the United Kingdom, in some cases with disastrous consequences, but that is further down the road.

My main concern is to ensure fairness and equity are built into the system, particularly in the interests of those who are most vulnerable. This requirement has already been established on both sides of the House. The Minister of State is operating in an environment in which people are totally unused to paying for water. A massive cultural change will take place when the people are asked to pay water charges for the first time ever. There is a large rural population outside the major cities. For such people, paying for water used to be the last thing on their minds. I cannot help reflecting on a comment made some time ago. I used to follow the mantra that water was a finite resource until a scientist pointed out that this country's rainfall levels meant it was not a finite resource. There is water in abundance at all times of the year. I am not sure Senator Michael Comiskey will agree with my view that farmers will start to increase their use of rainwater. The accumulation of rainwater, in order to cut down on paid usage, will be in vogue.

That makes sense.

It is interesting that as technology develops, people will be able to harvest more and more rainwater in order to cut costs. Perhaps the Minister of State has a view on this. I am concerned about what will happen when charges are eventually imposed on the most vulnerable. It is only right and proper that everybody - Government and Opposition alike - accept and acknowledge that the increased level of taxation being imposed will reach breaking point at some stage, to the extent that people will say "enough is enough." I hope the timeline the Government has outlined for reaching its budgetary and fiscal targets will be adhered to in the interests of the country and social cohesion. My personal opinion which I have no evidence to support is that this will be a "make or break" year. The general population will accept the taxation measures outlined in the budget last month, but if the Government provides for a similar level of austerity this time next year, we will reach an impasse and may experience serious social breakdown in certain key areas. While I do not want to be a prophet of doom, I must emphasise that the effectiveness of the water authority will hinge on the level of trust between the Government and the people. Will it be more effective than what the local authorities are offering?

Questions have been raised about the transfer of power. I have spoken to people in local authorities who have said it is inevitable that the people currently operating the water regime in local authority areas will operate it under the new water authority. That issue must be addressed. While the installation of meters and the imposition of charges are of critical importance, the first priority will be the cultivation of the resource. As the Minister of State has said repeatedly, leakages in the system have reached unacceptably high levels. I would like to receive an assurance that this will be a major priority for the new authority. There are concerns about whether the necessary investment will be provided for. It is a matter of trust between the Government and the people. Will sufficient resources be provided to address that issue? It is going to be a problem. When people receive their bills at the end of each month, having been told by the media that millions of gallons of water are being wasted, that will also have an impact on the level of trust.

I wish to propose an amendment to the Order of Business. I understand the Minister of State must be in the other House at 4.30 p.m. Therefore, I propose that we adjourn the Second Stage debate on the Water Services Bill 2013 at 4.25 p.m. and resume it on Thursday.

I take the opportunity to welcome the Minister of State, Deputy Fergus O'Dowd, back to the House. As I have said for some time, the Water Services Bill 2013 is one of the most significant, strategic and substantial Bills that will be dealt with by this House and the Dáil in the current term. It is just as important as the financial legislation with which we will have to deal.

An Bord Pleanála saw fit yesterday to grant planning permission for the next phase of the expansion and development of Intel. The safety, security and sustainability of a reliable water supply was one of the key factors the board considered in granting planning permission. Intel and other similar institutions use thousands of litres of water in their factories and plants on a daily and weekly basis. This is part of the strategic planning of international companies. We are competing with countries such as Scotland and Israel for investment and job creation of this nature. As part of the planning conditions, Intel has agreed to pay €21 million, a significant sum, to Kildare County Council for the supply of water. To date, Intel has invested at least €7.5 billion in its Leixlip installation which currently employs 4,500 people. That is what we are talking about when we have a debate on water supply.

Over 30 years ago everyone thought the idea proposed by a young man who appeared on "The Late Late Show" was crazy. I refer to the proposal made by Mr. Geoff Read to sell water to people in bottles.

At the time they thought it was a laughing matter, but, of course, we are talking about the founder of Ballygowan who was before his time and, as they say, the rest is history. Who would have thought that was possible in this country where it never seems to stop raining? We are fortunate to have a supply of largely clean and reliable fresh water in our taps, of which we think nothing and which, in fact, we take for granted.

I am not sure what the charge will be for water when meters are installed. I accept, however, that any new bill coming through the door of any household will be an additional burden and that no one wants to see extra charges and bills because, ultimately, people see the charge as a tax. Whether it is, it will certainly be a burden on families and households. However, as other speakers said, most reasonable people say it is not unfair or inequitable to pay, let me suggest, €1 a day to be sure of a supply of clean fresh water to meet all household needs. This goes way beyond that, however, as the Minister of State knows, because we are also looking at the commercial, industrial and agricultural implications, as mentioned by other colleagues. Even though there is an abundance of rain, this does not equate with having an abundance of useable drinking water and water suitable for use by pharmaceutical companies, restaurants and other businesses such as agricultural processing and so on.

I take the opportunity to remind the Minister of State, as I have in the past, that it was in 1940 the Poulaphouca reservoir was built to supply water to the city of Dublin. However, although construction started in 1940, it was 1947 before a single drop of water became available to the city. That is the lead-in time at which we are looking. With no disrespect to anyone, we are putting the cart before the horse in talking about charging for water, installing meters and developing the water infrastructure when we have not built the necessary reservoirs and infrastructure to make sure we will have the water to supply.

I highlight for the Minister of State the need to expedite and for him to intervene in this issue personally, as I know he is committed to the project of building the Bord na Móna reservoir at Garryhinch in the midlands to supply water to Dublin and the greater Leinster region. I would not countenance for one second supporting a proposal that would be ecologically or environmentally unsound or unsafe; in fact, I would vehemently oppose such a suggestion. I am certain, however, given the available data and evidence to date, that it is possible, safe, secure and sustainable - economically, ecologically and environmentally - to abstract water from the Shannon basin at a rate of between 2% and 4% and supply it to the greater Leinster region. I remind the House that the River Shannon is in flood for 80% of the year.

How much time do I have left?

The Senator's time is up.

I will draw to a conclusion because I know the Minister of State has to leave and we will resume the debate on Thursday.

I hate to stop the Senator in full flow.

That is a watery comment.

I want to make one further point. People say they support the establishment of Irish Water, but they are not sure if now is the time to establish it. They also support water metering, but, again, they are not sure if now is the time to charge for water. The right time was 20 years ago.

Yes, when the Senator's party abolished water charges.

No. My point is that as the right time to do so was 20 years ago, we have no time to waste. It should not take the troika to tell us to do what is right. We are 50 years behind the rest of Europe on this issue and it is high time we proceeded on it. I commend the Minister of State for his work on this legislation, but I suggest to him, with respect, that we tie infrastructural investment with the supply of safe and clean water.

There seems to be uncertainty in this regard. One point that has not been raised concerns the number of houses that already have meters installed. I understand that in the case of any house built in County Meath in the past ten years provision has been made for the installation of a meter. I did not hear the Minister of State's speech, but is he making provision for those houses that already have been provided for, where it will not cost us much to install meters? There are many such houses. I know Donegal County Council charges for the supply of water to holiday homes. Will the owners of such homes be charged again? There is, therefore, much uncertainty in this regard.

The Labour Party opposed this measure before the general election, but it is now supporting it. It abolished water charges in the 1990s, a matter about which Senator John Whelan spoke.

I supported the payment of water charges.

The debate will resume tomorrow.

Debate adjourned.
Sitting suspended at 4.25 p.m. and resumed at 5 p.m.