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Irish Water Establishment

Dáil Éireann Debate, Tuesday - 22 October 2013

Tuesday, 22 October 2013

Questions (355)

Micheál Martin

Question:

355. Deputy Micheál Martin asked the Minister for the Environment, Community and Local Government if he will provide details of the budget being made available for Irish Water; the amount that has been spent to date in setting-up Irish Water; the budgeted expenditure for the coming years; the cost savings, economies of scales and increased efficiencies Irish Water will achieve, and the timescale for achieving these targets; the way the achievement of these targets will be measured and reported and the arrangements he is putting in place to make these reports easily available to the public; if Irish Water is subject to freedom of information legislation in view of the fact that it is a publicly funded body and, if not, whether he will make arrangements to have it made so; and if he will make a statement on the matter. [44429/13]

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Written answers

The Water Sector Reform Implementation Strategy, which is published on my Department's website, is focused on ensuring that appropriate policy and legal frameworks are put in place for Irish Water and the water sector. As a first step in this process, the Water Services Act 2013 provides for the establishment of Irish Water as a subsidiary of Bord Gáis Éireann, conforming to the conditions set out in the Act and registered under the Companies Acts.

The Act provides that Irish Water will be required to submit an annual report on the performance of its functions each year to the Minister for the Environment, Community and Local Government and the Minister for Communications, Energy and Natural Resources. Irish Water will also be required to submit its annual accounts to the Minister for the Environment, Community and Local Government each year. The 2013 Act also provides that the annual report and accounts will be laid before each House of the Oireachtas. The extension of the provisions of the Freedom of Information Act to include Irish Water is a matter for the Minister for Public Expenditure and Reform.

Bord Gáis has put in place appropriate programme management arrangements to establish Irish Water, provide for customer service and billing and the domestic water metering programme in line the overall implementation strategy. Expenditure on this programme is a matter for Bord Gáis/Irish Water and these costs are not being funded from the Exchequer. The National Pensions Reserve Fund has provided a bridging loan facility to Irish Water to meet the costs arising to the end of 2013. This includes the initial stages of the domestic water metering programme, the full cost of which is €539m excluding VAT.

A key objective of the reform programme is to rationalise the cost of the current service delivery and ensure more efficient operation of water services by moving from 34 water services authorities to a single body; following enactment of comprehensive legislation later this year, these functions will transfer to Irish Water. The comprehensive legislation will provide powers to the Commission for Energy Regulation to examine and approve the costs of the services provided by Irish Water. The Commission is also to be provided with a statutory role to set standards of performance to be met by Irish Water and to, inter alia, promote the continuity, security, quality and sustainability of the services provided by Irish Water. The Commission will be required to operate in an open and transparent manner and to carry out appropriate consultations with customers and stakeholders where appropriate as part of this process.

Following transfer of the water services functions to Irish Water from 1 January 2014, a new funding model will be place to meet both capital and operational costs.  Irish Water's costs in the coming years will be funded through a mix of revenue from the domestic and non-domestic sector, third party finance (such as the Ireland Strategic Investment Fund, EIB, bank lending and capital markets facilities) and State support which may be in the form of both equity and subvention.

As it has been decided, following the previous review of the Memorandum of Understanding by the European Commission, the IMF and the ECB, that domestic water charges will commence with effect from Quarter 4 2014, it is expected that Irish Water will issue the first bills to customers in Quarter 1 2015. The Commission will engage in the necessary public consultations commencing in early 2014 on the design and level of domestic tariffs, based on the expected costs of Irish Water from 2015 onwards.

The Exchequer proposes a direct equity investment of €240m towards the capital funding of Irish Water in 2014. This will support projects to be included in Irish Water's Capital Investment Plan and will ensure that the entity is in a position to take on the water services investment programmes of the 34 water services authorities, including some 80 projects currently in progress. Irish Water will also finance some of its costs and the liabilities transferred from local authorities through borrowings in 2014.

The establishment of Irish Water and its financial relationship with the local government sector will have a considerable impact on local authority financing from 2014. Work is also underway on the funding model for Irish Water's operational costs, to ensure that Irish Water can fund the Service Level Agreements being put in place with local authorities for the delivery of water services in 2014.

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