I propose to take Questions Nos. 495, 496, 499, 534 and 543 together.
The establishment of Irish Water is an integral component of the Government’s water sector reform strategy and involves major organisational change, an entirely new funding structure governed by economic regulation, the introduction of domestic water charges based on usage and the roll-out of a national domestic metering programme. The role of my Department is to drive the overall water sector reform process which includes developing the policy and legislation, and ensuring delivery of the implementation strategy which was published in December 2012.
Establishing the new organisation under the umbrella of a mature semi-State, which is already a regulated utility operating in the Irish corporate environment, has a number of advantages including the key capabilities that could be brought to bear in the set-up of Irish Water – a track record in raising finance, experience in operating as a utility in a regulated environment, and specific skills from its own experience of transformation; customer relations, network management and metering, and utility operation systems.
The role of Bord Gáis Éireann (BGE) was key to bringing the necessary skills and competencies to the project, allowing the utility to be established within an ambitious timeline at least cost and least risk, by leveraging from their knowledge, systems and skills and matching this with skills within the water sector. It was recognised that in addition external service providers would be required as part of this process.
BGE had responsibility for most of the deliverables under the Government water sector reform implementation strategy. BGE developed a detailed programme initiation document within the framework of this strategy, which outlined all of the tasks required to establish a fully functioning integrated public water utility and provided this to my Department in August 2012. They also provided an associated budget to my Department which outlined the costs involved in each area of activity, totalling €150m plus €30m contingency and reflecting both the use of BGE and external resources. The budget reflected the range of tasks to be undertaken from financial, governance, regulatory business capability, systems, brand management and customer engagement perspectives.
The procurement by Irish Water of external resources was a matter for the company and I had no role in approving individual contracts. However, the company has recently indicated to the Joint Oireachtas Committee on the Environment, Culture and the Gaeltacht that the following major companies were used by the Irish Water Programme to help deliver the required systems and processes in the establishment of Irish Water - IBM, Accenture, Ernst & Young and KPMG. The company also indicated that to date some €50m has been spent on external service providers in establishing Irish Water. The services being delivered by external providers include the development of customer and asset management IT systems, the development of business and operational systems, services relating to finance, governance and regulation and quality assurance services.
Further details of the contracts relating to the establishment of Irish Water are set out in the submission made by the company above-mentioned to the Joint Oireachtas Committee, and this submission has been published on the company’s website at www.water.ie. In compliance with the conditions attached by my Department to the recovery of establishment costs, BGE confirmed that public procurement rules were being observed and provided a report on the outcome of the process in March 2013.
