Dáil Éireann Debate, Tuesday - 18 November 2014
500. Deputy Michael McGrath asked the Minister for the Environment, Community and Local Government the reason Irish Water was established with A and B share classes; and if he will make a statement on the matter. [43894/14]
View answer531. Deputy Seán Kyne asked the Minister for the Environment, Community and Local Government if there is a European Union condition, similar to the effects of the EU energy markets directives, that would require Ireland to liberalise or open up a water services market which would in turn entail the privatisation of Irish Water; and if he will make a statement on the matter. [44327/14]
View answerI propose to take Questions Nos. 500 and 531 together.
The Water Services Act 2013 provided for the establishment of Irish Water as an independent subsidiary within the Bord Gáis Éireann Group, to be formed and registered under the Companies Acts. Section 5 of the Act provides that the shareholders of Irish Water are Ervia (formerly Bord Gáis Éireann), the Minister for the Environment, Community and Local Government and the Minister for Finance. The Memorandum and Articles of Association of Irish Water provides for the allocation of one Class A share to Bord Gáis Éireann and one Class B share each to the Minister for the Environment, Community and Local Government and the Minister for Finance. The Articles of Association provides that the holder of A shares has the right to vote at any general meeting of the company but does not have any entitlement to any participation in the profits or the assets of the company. The Articles of Association provide that the holders of the B shares do not have the right to vote at any general meeting of the company but the B shareholders do receive whatever dividends or distributions as may be determined from time to time, hence providing that the two Ministers have full ownership of the economic value of Irish Water.
Section 46 of the Water Services (No. 2) Act 2013 prohibits each of the three shareholders from alienating their shareholding in Irish Water, which in effect places a statutory prohibition on the privatisation of Irish Water.
There is no European legislation requiring Ireland to liberalise the water services market. Article 345 of the Treaty on the Functioning of the EU clearly establishes a "principle of neutrality" in relation to the rules governing the system of property ownership in the Member States. The European Union cannot, therefore, adopt legal acts affecting the rules governing the system of property ownership, including those affecting the ownership of undertakings providing a public service, such as the provision of water. In a Communication earlier this year, the European Commission confirmed that it will continue to ensure full respect of Treaty rules requiring the European Union to remain neutral in relation to national decisions governing the ownership regime for water undertakings.
