Irish Water Establishment

Dáil Éireann Debate, Thursday - 7 November 2013

Thursday, 7 November 2013

Questions (154)

Lucinda Creighton

Question:

154. Deputy Lucinda Creighton asked the Minister for the Environment, Community and Local Government further to Parliamentary Question No. 175 of 24 October 2013, the changes that occurred relating to the establishment of Irish Water presenting local government with significant organisational and financial challenges that had not previously been envisaged; the date on which he became aware of these additional financial challenges and the additional costs associated with these challenges; the total estimated additional amount in euro that had not previously been accounted for, to deal with the financial challenges in Irish Water; and if he will make a statement on the matter. [47554/13]

Written answers

Minister of State at the Department of the Environment, Community and Local Government

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.

In view of the organisational and financial impact on the local government system, it has been necessary to defer defining a certain proportion of the proceeds of the Local Property Tax to be retained in each local authority until 2015. This is principally a matter of change management, as opposed to the emergence of unanticipated costs. This approach allows maximum flexibility in allocating Local Property Tax in 2014 with the priority to support those local authorities with weaker funding bases.

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.