Water Services Bill 2014: Committee Stage (Resumed)

SECTION 7

In accordance with the order of the Dáil of today, the proceedings on certain sections of Committee Stage of the Water Services Bill 2014 shall be brought to a conclusion with the following timetable: section 7, ten minutes; and sections 8 to 10, inclusive, 45 minutes for each section.

Question again proposed: "That section 7 stand part of the Bill."

As I noted last Friday, section 7 would establish a public water forum. I ask the Minister for the Environment, Community and Local Government to withdraw the section because it is worse than useless. It is just a smoke screen for Irish Water, the Minister and his Department. We found it impossible to get answers from either the Minister or Irish Water regarding domestic water charges. On three occasions in the past week I raised a question with the Minister but he has not yet addressed it. The forum will comprise at least 12 and not more than 60 members. In effect, it will be another quango. It is not clear what functions it will perform or what interests its membership will represent. Will people who are strongly in favour of privatisation be represented on the forum? Will the members be nominated on the same basis as every other committee established during this Dáil, with a ratio of 2:1 of Fine Gael and Labour Party representatives? That is how nominations have been made to various boards, committees and authorities. Will the nominees be paid and, if so, what level of payment is proposed? Will they be entitled or encouraged to waive payments? How much will this cost overall? How many staff, and what grades, will be appointed to support the forum in performing its functions? What will be the forum's overall costs? In view of the fact that we have been able to get very little information, the Minister would do well to withdraw the section.

Section 7 provides for the establishment of a public forum with between 12 and 60 members. What is the purpose of this forum? I do not think it will have any powers or real functions. It is like the HSE health forum in the west, which is a talking shop in my experience. It has no powers or functions, and it cannot formulate policy for the health services because they are governed nationally by the HSE. Is the purpose of this forum simply to dress up Irish Water with the pretence that people will have a say in how it is run? Will the members of the forum be political appointees or will they be recruited through advertisements? Will it be filled with failed Labour Party councillors who were not elected in the last local elections? I cannot see any reason for establishing this forum. We have a health forum in Galway and nothing comes out of it because it is a publicity stunt for councillors who want to get their names on radio or television by attacking HSE officials. I cannot see a justification for establishing this forum.

We had 31 forums for water services, namely, the local authorities. That is where water services plans were devised and people were made accountable by their peers in the electorate. The Minister met councillors in County Laois yesterday, and he saw local government in action there.

I was very impressed.

That is good. The Sinn Féin presence on the council makes all the difference.

There is also a Labour Party presence.

There is a small Labour Party presence. It is Sinn Féin's firm belief that local authorities and the Dáil are the best way of providing accountability. Unfortunately, Irish Water is at one remove from such accountability. There may be an occasional clinic or a hotline but that is as good as it gets. It is the difference between democratic accountability and corporatism. Corporatism has its place but it happens in boardrooms. Democracy also has its place. If one came up with a proposal like this 30 or 40 years ago, no party in this House would entertain the idea of taking a vital service like water from democratic control and moving it into a corporate structure with questionable origins. There is little accountability in Irish Water. It is not accountable to the Comptroller and Auditor General, the Minister for the Environment, Community and Local Government or the Houses of the Oireachtas in any proper way. I proposed an amendment which would allow householders, commercial water users and trade union members to be represented on the forum. The last speaker is correct that the health forums are talking shops, although they were established by his former party, the Progressive Democrats. Consultative forums are talking shops. The difference is that local authorities had the right to make plans, hold executives to account and decide how money for water services should be spent. The electorate, in turn, held the council members to account, providing a straight line of accountability. The water forum will be a talking shop but Sinn Féin wants to ensure that the three aforementioned groups will at least be involved with it.

Section 7 provides for a right to comment on any consultation document produced by the Commission for Energy Regulation in respect of public water and waste water services. That is an example of the convoluted nature of the legislation. Matters are being taken very far away from where people can be held to account for decisions. We would prefer that Irish Water does not exist but given that the Minister is steaming ahead with it, I ask Government Deputies, including in particular Labour Party Deputies, to take my proposals on board. The water services workers in local authorities and Irish Water need to be represented on this consultative forum, along with householders and commercial water users who are paying for water every day.

I ask that the Government, in a spirit of co-operation, at least ensure that those three sectors are represented.

I will be brief and not labour the points. The fact is that we are removing it from the democratic control of the local authorities. Somebody said on the last occasion we discussed this that customers' interests would be represented when discussing matters such as leaks. Such matters were dealt with at local authority level and there was great variation. Where there was investment the leak rate has been significantly reduced, even without meters. People see the difference between paying for water and paying for Irish Water. They have a major resistance. Even people who say they have no resistance to paying for water have a resistance to paying for Irish Water. It is a quango within a quango. That is 160 degrees away from what Fine Gael proposed during the general election campaign.

Question put:
The Committee divided: Tá, 82; Níl, 48.

  • Bannon, James.
  • Breen, Pat.
  • Bruton, Richard.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Deering, Pat.
  • Doherty, Regina.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Heydon, Martin.
  • Howlin, Brendan.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Enda.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • Lyons, John.
  • McCarthy, Michael.
  • McEntee, Helen.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • Maloney, Eamonn.
  • Mitchell, Olivia.
  • Mulherin, Michelle.
  • Neville, Dan.
  • Nolan, Derek.
  • Noonan, Michael.
  • Ó Ríordáin, Aodhán.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Reilly, Joe.
  • O'Sullivan, Jan.
  • Penrose, Willie.
  • Perry, John.
  • Phelan, Ann.
  • Phelan, John Paul.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Ryan, Brendan.
  • Sherlock, Sean.
  • Stagg, Emmet.
  • Stanton, David.
  • Tuffy, Joanna.
  • Twomey, Liam.
  • Varadkar, Leo.
  • Wall, Jack.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Calleary, Dara.
  • Collins, Joan.
  • Collins, Niall.
  • Colreavy, Michael.
  • Coppinger, Ruth.
  • Cowen, Barry.
  • Creighton, Lucinda.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Donnelly, Stephen S.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Flanagan, Terence.
  • Fleming, Sean.
  • Fleming, Tom.
  • Grealish, Noel.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Kelleher, Billy.
  • Kirk, Seamus.
  • Mac Lochlainn, Pádraig.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McGuinness, John.
  • McLellan, Sandra.
  • Martin, Micheál.
  • Murphy, Catherine.
  • Naughten, Denis.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • Pringle, Thomas.
  • Smith, Brendan.
  • Stanley, Brian.
  • Timmins, Billy.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Ruth Coppinger.
Question declared carried.
SECTION 8

I move amendment No. 30:

In page 9, to delete line 35.

On studying the Bill, I see no mechanism for resolving disputes with Irish Water. In my constituency, a contractor working on behalf of Irish Water came to an estate to fit meters. A retired nurse living there was away for a week with her family when the meters were fitted. The valve on the meters is not like the old valve, which one had to turn several times to turn the water off or on. The new valve needs only a small twist, which results in a sudden gush. The sudden gush blew the middle out of the person's water softener and some of the other appliances in her house, and flooded her whole house as a result. There were no leaks in her house before the Irish Water contractors fitted the meter and did what they did. She raised the issue with me and I raised it with the contractor and Irish Water, which bounced it back and forth between them. First, Irish Water said it had not happened; then it said it had happened and the contractor was responsible. The contractor disputed this, despite the fact that the householder had brought in a suitably qualified person who verified that the excessive water pressure when the contractor turned the water back on was the cause of the problem. The water took the resin and other fillings out of the water softener in the person's utility room and flooded her whole house. I see no mechanism for sorting out such issues.

We are dealing with a corporate body with no direct line of accountability. Irish Water can listen to us if it wants to. A previous speaker raised the fact that while people on consultative bodies may discuss matters, final decisions are made in the boardroom, not in council chambers or here in the Dáil. We are all accountable and must take these matters seriously because, whichever side of the House we sit on, we must be interviewed by several thousand people at least every five years. Irish Water is not directly accountable to the Comptroller and Auditor General or the Minister. Like Bord na Móna or any semi-state company, it must publish an annual report, nothing more, and remains at arm's length.

Councillors and Deputies certainly are completely sidelined under reformed local authorities for which the Labour Party and Fine Gael argued in this Chamber. Sinn Féin supports local authority reform and some of what the Government has done is good. I do not agree with all of it but everyone seeks stronger reformed local authorities. There is no better mechanism for holding to account public services than local authority members, be they Fianna Fáil, Fine Gael, Labour Party, Sinn Féin, Independent or anything else because those people are directly accountable and are close to those they represent. That is the straight line of accountability. I do not have faith in this customer dispute resolution. It is a sop that creates the illusion that some kind of mechanism will be in place but in my experience thus far with Irish Water, it is completely unaccountable. It does not resolve problems, there is no straight line of accountability, there is no mechanism for holding the company accountable and therefore, I will oppose the section.

Before calling Deputy Catherine Murphy, I remind Members there is a time limit, which is on display on the clock in the Chamber.

Much of this comes down to the definition of what is a customer. As Members are aware, many people do not wish to be customers, as they discern the difference between being a citizen and being a customer. However, there appear to be two definitions, one of which is in the 2013 legislation and which pretty much defines it as the occupier. However, when it comes to customers, there are two definitions because on the form, it states one can opt out of being a customer, whereas the legislation states one cannot do so and one is a customer regardless of one's wishes. As the dispute resolution process states the customer is someone who has registered, there appears to be a variation as to what in fact is a customer. There is the customer as defined by Irish Water and then there is the customer as defined by legislation and this is quite a significant issue with regard to dispute resolution.

People will have disputes of all kinds about bills, water leaks and a range of different things and irrespective of whether people are in dispute, it is absolutely ridiculous that they can be shut out of a dispute resolution process when there is a dispute to be resolved. I do not understand how one can be a customer as defined by Irish Water and a customer as defined by the legislation because I believe there is a difference between the two. I asked the Minister about this last week when I asked about the number of people who actually had registered. I must state I find it extraordinary - given the reports I have heard from people who sent back forms that were incomplete and who did not even open the envelope but simply wrote on the envelope to send it back - that one is supposed to believe that only approximately 20,000 of the forms were returned like that. This issue of the definition of the customer and defining it in two different ways goes to the heart of this particular section of the Bill.

I also wish to speak on this amendment and if the Government was serious, I recall I brought forward a Private Members' Bill, namely, the Water Services (Amendment) (No. 2) Bill 2014, in which I made provision for an ombudsman to be appointed because there will be disputes by the dozen and more. Members know this to be the case in respect of utilities, as does anyone with experience on the ground. Indeed, the Minister himself knows about dispute resolutions and where he ended up himself to sort out a dispute some time ago with his neighbour. That is his own business and I will not comment on it but-----

What has that got to do with it?

Please Deputy, stay on the Bill.

----- disputes like this can be fractious and can be niggly at the start but with the situation-----

I remind the Deputy we are on section 8.

Yes, I am speaking on section 8, on dispute resolution, the customer and what is a customer in this Bill.

What has the dispute with my neighbour got to do with it?

It just goes to show the Minister's arrogance again. That is all it does continuously again.

Through the Chair, please,

The Deputy might note the outcome of that case.

Deputy Mattie McGrath has had a few disputes himself.

I might note the outcome. That is fine but I am just making the point, by way of illustration, of how disputes can turn nasty-----

It is completely irrelevant.

It shows the type of individual the Deputy is.

----- how an ombudsman is needed and how disputes can turn expensive.

My point is that when issues arose with the county council, there always was a dedicated officer. A leakage form was available if there was a dispute, people were dealt with fairly and I salute the council officials who dealt with such issues. In this case, the customer is described in one situation by Uisce Éireann and in another situation is described by the Minister himself. It is the same as the Commission for Energy Regulation setting the prices, only for the Minister to take the job from it and from one amendment to the next, this Bill becomes more farcical. I reiterate that in my Private Members' Bill, I had proposed a dedicated ombudsman because there will be disputes by the dozen and by the hundred as that is the nature of the thing, especially when the meters have been fitted and, as could happen, the wrong number is mistakenly allocated to the householder or the customer in this case.

Moreover, any Member who has represented a rural constituency for any length of time has had issues over the years with farm accounts, business accounts and with different people. As I indicated earlier, we had a 98% record of payment from that sector in County Tipperary but disputes will arise and have arisen and there is a need for mediation and contact. That is where politicians came in, as they intervened as Teachtaí Dála or as comhairleoirí and meaningful discussions were held. There always was dispute resolution but the Minister has set his face against it completely. He does not want any dispute resolution, as it is all one-way traffic in this Bill. It is a case of let the money flow in agus ar aghaidh le hUisce Éireann. However, that is not good enough and I am totally opposed to this section.

I also wish to speak in support of the amendment as there must be a proper, working user-friendly means of resolution to disputes that will arise because disputes of course will arise. As the Minister is aware, I was completely opposed to the setting up of Irish Water in the first instance but what has happened over the past number of months with the U-turns by the Department and the Government is absolutely disgraceful. A meeting was held last week for which I am grateful and I thank those responsible for bringing in Irish Water to answer Members' questions. I appreciate that and it was helpful but during one question-and-answer session, Members discovered that the lifespan of the meters being installed will not even be ten years, regardless of whether they are used. If the meters are not going to be used it means that by the time the Government begins to use them and to charge people for the usage of water, rather than a capped amount, it will need to go to the expense of installing a second meter. In this context, people in recent days have made the point about Irish Water not making money and bringing in revenue to repair pipes. This is what this project should have been about at all times, not about metering water or accounting for water but about fixing broken pipes in the ground. The staff who were working in the water departments of local authorities knew what were the problems and where they were. However, what they need is money for investment into new infrastructure and instead of providing money to do the work on the ground, the Minister has created a monster. In the Minister's case, I acknowledge he did not create the monster; he adopted the monster. I must question the sanity of so doing, because had I the say in adopting something like this, I would have gone to some other Department. I swear that were I the Minister, I would rather have been in the Department of Foreign Affairs and Trade or somewhere far away from this.

The Ballinskelligs.

However, the Minister took the chalice.

To return to the point at hand, we are where we are. In speaking to the motion - I respect the proposal that has been made - there must be a proper mechanism in place in order that when an issue arises, the person with the problem can be dealt with speedily and in an honest, open and frank manner. I hope the amendment will be accepted on the basis of the sincerity and the grounds on which it is being put forward.

In the context of the section, can the Minister comment on litigation claims that may exist against Irish Water on the part of people who feel aggrieved in the case of, for example, flooding? Insurance may not have been taken out on the property but it can be argued that the cause was that the defence was not sufficient because of the manner in which treatment systems were maintained. This may apply to local authorities or to Irish Water if it happened since the legislation giving effect to the transfer of network assets from local authorities to Irish Water. I am aware of instances where such cases exist and I am conscious of the fact Irish Water has initiated legal proceedings to defend itself against the claims, which may proved to be correct in the absence of the court adjudicating.

In this section, I note it is proposed CER may become the arbitrator in such cases. Can the Minister confirm that this can be retrospective in so far as the thrust of the legislation was something the Minister's predecessor would have preferred to bring to the House 18 months ago rather than what he now finds necessary to do in light of the public backlash? This is a technical issue that needs to be clarified. Will the Minister stand aside and allow existing cases to proceed whereby CER might have a legal obligation to adjudicate? The same upgrading and maintenance of plants continues. In the event of a similar situation this winter, the same claims may be made. It is incumbent on the Minister to instruct CER to act as arbitrator, similar to the role of an ombudsman, as previous Deputies mentioned.

I echo the concerns of colleagues about section 8. As set out, it seems a reasonable process. What happens if CER gets it wrong? Should the Minister include an appeals mechanism? Will the Minister have any role in an appeal against the decision? I base my concerns on the lack of an appeals mechanism, other than going the legal route.

I refer to the concerns I put to the Minister last week about Ervia or Bord Gáis Éireann, which the Government flogged to the private sector. Looking at the historic role of Bord Gáis Éireann and the successor network company, which has the new name of Ervia since yesterday, many representatives found it a remote company to deal with even when its headquarters were on Foley Street in the inner-city. When issues arose, such as a welcome extension of the gas network around the north and west sides of the Dublin, there were concerns about how responsive Bord Gáis was to complaints and considerations when we represented housing estates.

Another factor is regulation in general in this country and the role of CER. I do not have much confidence in CER or other regulators on the economic side because they have not delivered over the past 15 years when we needed them most to make strong determinations on energy pricing. CER did not deliver in its role for this House. CER having a fundamental right of decision in section 8 is not a move I welcome. I ask the Minister to examine a further appeal mechanism. Will the Minister have a role?

I am totally opposed to the establishment of Irish Water and I believe the process embarked upon was outrageously outlined on Thursday night and Friday. After the general election, there will be major changes. It is important to get the process right and I ask the Minister to answer on the issue of an appeal. Will only a legal remedy apply to consumers?

It is clear in the course of the debate that two major mistakes have been made. The first is on the referendum. During the course of the debate, the Minister's refusal to insert the word 'shall' instead of 'may' was unearthed but he has now changed his mind, which is good.

The second concerns the €100 grant, which the Government will abolish in no time if it gets through because it is so cumbersome and costly to implement. Now, it looks like the Government is making another serious mistake setting up a monster commission to take complaints and refusing to incorporate everyone who uses water into the complaints procedure.

Who do people go to right now if they have a problem with their water? I would love the Minister to answer. Last week, in my estate a woman had a major leak in her house with thousands of litres pumping out. She contacted Irish Water but was told that it was not the responsibility of that body. She contacted her council and was told it was not its responsibility. Meanwhile, the water was leaking to beat the band when this was supposed to be about conservation. Eventually, the fire brigade attended and closed the gap. It appears young people are getting their hands on keys to meters and pipes and opening them up, causing leaks. It would be great if people knew who to contact.

When talking about a complaints procedure, the Minister knows tens of thousands people have no intention of registering to become customers. They are vehemently opposed to the establishment of Irish Water and the privatisation of the service and opposed to paying for water a second time and the commodification of water. The Minister intends to exclude these people from making a complaint to CER. In a section of the Bill, the Minister states that a person is not entitled to make a complaint unless registered with Irish Water as a customer. If someone has a serious leak in the next year, they will be denied service.

Before the Minister got his hands on it, if people had leaks or flooding in their homes they knew who to call. The local authority provided service and did not question whether people had registered or paid. The local authority just dealt the problem. By setting this up, it shows the Minister is commodifying and privatising the system. What about people who cannot afford to register? Will they be denied a water service or will their complaints be dealt with?

Most companies set up a complaints department rather than people having to go to a separate agency to have complaints dealt with.

Yes, Bord Gáis.

Perhaps the Minister does so but that is not the way things used to be. People used to ring a company and it dealt with the complaints. Perhaps the Minister can tell Deputies who to go to when they have complaints about Irish Water. Over the past three days, my office has sent e-mails to Irish Water and it bounced back e-mails saying it acknowledges receipt of the e-mail. Is there any chance elected representatives, who have more power than the average person, can get a service from Irish Water?

The Minister still has not clarified the nature of registrations, the number that referred to no contract and no consent, the number that were not filled in properly. Every Member on this side has asked that question over the past week. If we cannot get answers from Irish Water, God help the so-called customers of Irish Water if the Minister succeeds in implementing his water charges which, frankly, I do not believe he will.

Yet again, as we move through this Bill section by section, it stumbles from the shambolic to the borderline comic to the Chaplinesque and then back to the outright dreadful.

Is that Karl Marx or Groucho Marx?

I actually said I was thinking more of Charlie Chaplin. To be honest, there is a good bit of Groucho and the Three Stooges in there too. It would be funny if it were not so serious.

Last week we spoke about the hidden costs of Irish Water. Here is another cost. Judging from the anecdotal evidence we have already heard from Deputies, we will have a hell of a lot of disputes with Irish Water. Where is the Commission for Energy Regulation going to get the staff and resources to deal with these complaints? It will be putting in for more money too. This will be another cost to add to the €130 million - or is it €160 million or €210 million? - for the conservation grant, as well as the hidden costs of administering these grants. It all piles up, leading one to believe the whole idea is becoming ridiculous. Due to all these consequences of setting up this quango, it will not make a cent but will rob people of more money.

Following on from what Deputy Coppinger said, it is obvious that this will produce more problems and complaints because there are far more demarcation lines. There is the demarcation of what the customer’s responsibility is and what it is not. If it is not a customer’s responsibility, is it Irish Water’s, the local authority’s or the contractor’s? We have all these stools and everyone batting everything back to everyone else.

A subject we have not brought up yet is that of rats. I am not talking about the Government or a certain builder who is in dispute with bricklayers.

Leave that Deputy out of it.

I am discussing actual rats in pipes. A man who came to my office this week had rats coming into his house because of cracks in his water pipes. This is a serious problem and happens quite a lot when rats get into cracked sewer pipes. Many of these sewer pipes go across some of the demarcation lines I spoke about. In this man’s case, the sewer pipe is coming from a council property into a private property. Whose responsibility is it? It is quite possible that the rats are coming from the council’s area, but the problem is manifesting in somebody’s private property. The man in question claims it is the council’s problem, while the council is claiming it is Irish Water’s problem.

There is a dispute resolution mechanism in place.

The point is that we are going to have more disputes like this because we have Irish Water.

Will Deputy Boyd Barrett give me that crystal ball when he is finished? I want to see what the numbers will be tonight.

It is obvious. To add to Deputy Coppinger’s examples, we have had two major leaks in Dún Laoghaire, one of which, on the West Pier, went on for weeks, with tens of millions of gallons of water pouring out of the pipe while the council and Irish Water argued over which of them was responsible. It went backward and forward and backward and forward, and the water just kept pumping out. Another leak in Monkstown went on for two weeks, with tens of millions of gallons of water pouring out on a main road. Who is responsible? Nobody is responsible - or we will fight for weeks over who is responsible. Somewhere down the line, in this interesting bureaucracy, the customer will have to navigate from the council back to Irish Water and then on to this gang. Will this gang be running a call centre? I do not know. The customer will go backward and forward, around and around on the merry-go-round, whereas once upon a time they just went down to the council and said, "Can you sort this out?". While they might have had to fight with the council, at least they could ask their local representatives to argue the case for them. There was some line of accountability and a physical office with real human beings, not disembodied voices in a call centre, with whom one could engage, as well as a democratic forum in which to raise matters. Now we have lots of demarcation lines, so nobody will be responsible and everybody will be responsible, and we have some disembodied entity a far distance away that is going to resolve the dispute.

There will be far more disputes than we have now. Will the Minister enlighten us as to the costs for all of this? Are extra costs anticipated for the extra resources and staffing the Commission for Energy Regulation will need to deal with this new job? Believe me, it will have a big and confusing job.

I have listened to what many in the Opposition have said about section 8, and although I agree with some of their concerns - for example, I hope the Oireachtas helpline will remain open, as a direct line will be important for Oireachtas Members when constituents contact us about general issues concerning water supply-----

It will be very busy.

Deputy Catherine Murphy made a point about whether people who are not customers will be able to make a complaint about Irish Water. Even if one is not a customer of a gas company, there are enough radio advertisements to remind people what to do when they smell gas. I am trying to be practical here, although I realise the Deputy may have another agenda. There is a number available for non-gas customers in such an event. If I were to see a water leak on my way home to Ballymun, there should be a number I can ring so that it can be responded to. The corollary is that if I have central heating in my house and I pay a bill to Bord Gáis, or Ervia, I should be able to contact that company. That is what we are setting up with this system. It will give me as a customer an opportunity to deal directly with the supplier of whatever I am buying from any utility company. I do not see why, for example, somebody who is not a customer of Vodafone-----

That is Vodafone. It is a different matter.

This is about water.

-----should be able to speak to Vodafone about an issue. If one is not a customer of a particular utility or energy company, how can one make a complaint? It is the same with every other semi-state company.

That is my point.

I just do not get that.

It is important we debate the dispute resolution aspect. Regardless of what Bill is involved, I would imagine one would be strengthening it rather than weakening it. This is what the amendment is about. We all accept that many people are unhappy with Irish Water. Some will not register, while others will. My concern is that the rights of those who are not registered will be waived. I do not understand where the Minister is coming from on this. We all accept that there will be significant difficulties coming down the track. This has been described as the carrot-and-stick approach, which I do not understand.

There may be another reason this has been done, but I do not understand.

I can give examples from my constituency and the Minister probably does not want to hear them, but I have seen problems similar to those mentioned by other speakers in recent weeks. I have telephoned various entities about problems and been told that responsibility lies elsewhere. In one case a leak was discovered; I do not know for how many years it had continued, but I mention it because the Minister made reference to a period of six years. I was told by Uisce Éireann that the leak had not affected the basement of the building in question, but I could see water coming down. These things can happen and mistakes can be made. In Deputy Robert Dowds's constitutency of Dublin Mid-West a pipe collapsed and a gusher ensued. If the water had entered the property of a person not registered with Irish Water, what mechanism could have be used?

The Minister may say these things will not happen, but we have given examples and must make provision in all legislation for unexpected curved balls. We must try to encompass all ideas. The Minister must come back to us on the idea of people's rights being waived as the amendment relates to persons not being able to make a complaint. To follow up on what a previous speaker said, Vodafone and the like may have to deal with matters of nuisance, but water presents a different issue. As it knows no boundaries and could impact on broader society, I could imagine a person in a complex of flats having a problem with it. He or she might have a complaint and the Minister may counter that the courts offer a mechanism, but it is generally better for society if matters can be resolved without recourse to legal action. The best and cheapest mechanism to deal with a leak is to simply telephone the company responsible, set out the damage done to sofas and the like and have the company send an assessor. This is a cheaper approach than going to court.

I am concerned about how the legislation is being framed. The Minister knows that the Government has a majority in the House and can pass this legislation if it so wishes, but I ask him to re-examine and reconsider this section on dispute resolution as it must be strengthened. I am not thinking of what might happen today but in the future. If the legislation is passed, so be it, but this will be a recurring problem.

The amendment relates to section 8 and seeks to delete subsection (4)(a)(i). This part of the Bill states that for a citizen to avail of the dispute resolution mechanism, he or she must be a customer of Irish Water. This, therefore, is a very sensible amendment. Deputy John Lyons asked the Chamber for an example of a person who might not be a customer but who should be able to avail of the dispute resolution mechanism. I will give one.

I live in Greystones and Irish Water recently accidentally increased water pressure in a housing estate there. Pipes burst and houses were destroyed as a consequence. Many of the people affected are not and have no intention of becoming customers of Irish Water. As its actions caused this trouble, the question is: should people who are not registered with Irish Water but who have been directly affected by its actions have access to a dispute resolution mechanism if it refuses to take responsibility? We do not know that this is the approach Irish Water will take, but the effect of the proposed amendment to section 8 would be to allow citizens in these circumstances to escalate matters to an independent arbiter, the Commission for Energy Regulation, CER. I suggest I have given a live example from the town in which I live of the usefulness of the amendment. There is a straightforward, non-political case for allowing non-customers of Irish Water access to the dispute resolution mechanism. The Minister should, therefore, consider accepting the amendment.

On section 8(4)(a)(iii), the Bill sets out that a customer, or, ideally, as we have just discussed, a citizen, will have access to the dispute resolution mechanism having exhausted any mechanism provided by Irish Water. I urge caution. It is possible that in the future Irish Water could put in place all manner of mechanisms to allow it to argue that it is in the middle of investigating complaints using internal processes, thus denying customers access to the independent arbiter, the CER. The Minister should examine this issue and the section might be amended on Report Stage. Perhaps it is as simple as changing the wording to say the customer has exhausted all reasonable dispute mechanisms provided by Irish Water because it is possible, based on a strict reading of the Bill, as it stands, Irish Water could avoid independent arbitration by stating a complaint is still within its own system. The company could keep the process tipping along for months and months and rectifying this could be as simple as adding the word "reasonable".

To conclude on subsection (4)(a)(i), it is clear that citizens who are not registered customers will need access to the dispute resolution mechanism; therefore, the Minister should consider accepting the amendment.

The line is nonsensical and should be deleted from the Bill as the amendment is very reasonable. I can envisage many circumstances in which a person who is not a registered customer of Irish Water might wish to make a complaint about the company. Why should only Irish Water customers have the right to call on the Commission for Energy Regulation to engage in dispute resolution? Irish Water's code of practice for handling complaints does not set out that only customers of the company can make complaints; why, therefore, does the legislation bar non-customers from taking complaints further?

There are many circumstances in which this could be an issue. A non-customer of Irish Water could be affected by the company's shoddy workmanship in meter installation or leak repair and might, ultimately, need to elevate a complaint to the Commission for Energy Regulation. The Minister says a person with a complaint will first have to register with Irish Water and make a complaint to the company and only then, if the internal resolution process fails, will that person have the right to elevate the matter to the Commission for Energy Regulation. This is a nonsensical approach that will affect many people as an adult may live in a house without being the registered owner and still have a valid complaint to make to Irish Water. Such a person will have to register with it to progress a complaint. This makes no sense.

The sensible approach for the Minister to take is to agree to the amendment and delete line 35 from the Bill, as this would make no difference to the functioning of the Commission for Energy Regulation and would give citizens a right of recourse when a complaint to Irish Water fails. The amendment would allow for a simple, cost-effective process that would make sense, while the Bill, as it stands, will force people to go to the courts as a last resort to seek dispute resolution. I urge the Minister to consider the amendment.

I thank Members for their contributions.

The amendment proposes to delete the requirement that a person be registered as a customer with Irish Water in order to be entitled to make a complaint against Irish Water. I do not believe this is appropriate since section 8(4) requires that a person must have exhausted any dispute resolution mechanism provided by Irish Water.

It is important to note that we know what we are doing by putting this on a statutory footing. It is important to reflect on what sections 8(2) and 8(4) state.

Famous last words.

Section 8(2) states:

The Commission shall not provide the dispute resolution service where the complaint—

(a) is or has been the subject of legal proceedings before a court,

(b) is made after the expiration of 6 years from the date on which the cause of the complaint is alleged to have occurred,

(c) relates to a matter that does not concern the functions or objectives of the Commission...

This may help Deputy Cowen with his query. Furthermore, section 8(4) states:

A person is not entitled to make a complaint unless—

(a) at the time to which the complaint relates he or she—

(i) was registered with Irish Water as a customer,

(ii) has previously communicated the substance of his or her complaint to Irish Water in writing, and

(iii) has exhausted any dispute resolution mechanism provided by Irish Water,

and

(b) a final decision on the complaint has been issued by Irish Water to the customer in writing.

If Deputy Donnelly wishes to make an amendment in respect of the last matter I will consider it on Report Stage. It is something that I will need to digest. Anyway, I take the validity of what he has said.

It is important to point out that a customer is anyone who receives a service from Irish Water. There is a difference between a customer and a registered customer. That is the nub of the issue. The benefits for registered customers of Irish Water include certain allowances, the fact that they will receive a correct bill and that they will be able to get the water conservation grant. Now, through this measure, they will have access to the dispute resolution process.

Thank you, Minister.

That is the critical point. Anyone can make a complaint to Irish Water. However, to avail of the statutory process for dispute resolution which is being put in place through this Bill a person must be registered.

That is not what the legislation states.

Of course, this does not take away the fact that anyone can go through the legal process of the courts, if they so wish. I might also point out-----

Please conclude, Minister.

I am concluding. Several Deputies have raised various issues relating to Irish Water. Irish Water has an operational call centre and there is an operational line for Members as well. Irish Water representatives have been present in Leinster House every week lately. The company is handling up to 4,500 calls on operational issues per week. I am keen to put that on record as well as the fact that an information line is available.

A Leas-Chathaoirligh-----

No, I am sorry, Deputy. I have to put the question.

On a point of order, the Minister said that a person can make a complaint even if he or she is not registered. However, on page 9, section 8 states-----

I was referring to Irish Water.

Section 8(4) states:

A person is not entitled to make a complaint unless—

(a) at the time to which the complaint relates he or she—

(i) was registered with Irish Water as a customer...

I just said that.

The Minister said that a person could make a complaint-----

Yes, to Irish Water.

The Minister said that people can make a complaint but they cannot.

Yes, to Irish Water.

They cannot make a complaint according to section 8(4).

I am sorry, Deputy. The time permitted for this debate having expired, I am required to put the following question in accordance with the order of the Dáil of this day: "That section 8 is hereby agreed to in committee". Is that agreed?

Are we not discussing the amendment?

No, the order was that we conclude on the section after 45 minutes.

Do we not have to put the amendment?

No, the question is on the section.

Question put:
The Dáil divided: Tá, 72; Níl, 42.

  • Bannon, James.
  • Bruton, Richard.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Deering, Pat.
  • Doherty, Regina.
  • Donohoe, Paschal.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Harrington, Noel.
  • Harris, Simon.
  • Heydon, Martin.
  • Howlin, Brendan.
  • Humphreys, Heather.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Kathleen.
  • Lyons, John.
  • McEntee, Helen.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • McHugh, Joe.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mitchell, Olivia.
  • Neville, Dan.
  • Nolan, Derek.
  • Noonan, Michael.
  • Ó Ríordáin, Aodhán.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Reilly, Joe.
  • Perry, John.
  • Phelan, Ann.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Ryan, Brendan.
  • Sherlock, Sean.
  • Stagg, Emmet.
  • Stanton, David.
  • Tuffy, Joanna.
  • Twomey, Liam.
  • Wall, Jack.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Collins, Joan.
  • Colreavy, Michael.
  • Coppinger, Ruth.
  • Cowen, Barry.
  • Creighton, Lucinda.
  • Crowe, Seán.
  • Daly, Clare.
  • Donnelly, Stephen S.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Flanagan, Terence.
  • Fleming, Tom.
  • Grealish, Noel.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Kirk, Seamus.
  • Mac Lochlainn, Pádraig.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGuinness, John.
  • McLellan, Sandra.
  • Mathews, Peter.
  • Murphy, Catherine.
  • Naughten, Denis.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Smith, Brendan.
  • Stanley, Brian.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Catherine Murphy.
Question declared carried.
SECTION 9

Amendment No. 31 is out of order. Amendment No. 32, in the name of the Minister, and amendments Nos. 33 to 35, inclusive, are related and are to be discussed together.

Amendment No. 31 not moved.

I move amendment No. 32:

In page 11, line 10, after “authority” to insert “or the Local Government Management Agency”.

Amendment No. 32 is to provide for staff of the Local Government Management Agency who have been appointed as employees by Irish Water. These staff are members of the local government superannuation scheme and are treated as local authority staff for pension purposes but are not actual employees of a local authority.

Amendment No. 33 is required to clarify that Irish Water does not have financial liability for the past services of offices of the Minister or the local authorities other than the net effect of any increase in pensionable remuneration due to actions of Irish Water. The first part of amendment No. 34 relates to clarifying this same liability issue. The second part of amendment No. 34 is to address the case of the employees who were asked to resign from the local authority and were employed by Bord Gáis, now Ervia, on an interim basis until such time as Irish Water's defined benefit scheme was set up.

Amendment No. 35 is required to enable staff from Bord Gáis and Ervia who have taken up employment in Irish Water to remain in the Ervia defined benefit scheme.

I have a number of questions. Have the costs of superannuation been quantified? Clearly, those who will be employees of Irish Water must have their pensions covered.

I presume one of the reasons for tabling these amendments is to correct an omission made in drafting the Bill in respect of the Local Government Management Agency. If people employed by the local authorities are seconded to Irish Water, where does the pension liability lie?

Section 9 and the proposed amendments thereto appear to deal with legacy issues relating to the pensions of those employed previously by Ervia or Bord Gáis who will transfer to Irish Water. Will those who are entitled to receive bonus payments under the auspices of Ervia or Bord Gáis be entitled to receive them under the auspices of Irish Water?

In recent weeks, when confronted with the issue of bonus payments, the Minister has stated both inside and outside the House that it is his intention that they will not be paid. If that is the case, is it possible to introduce legislation to give effect to that intention and, if so, will he do so? How does he plan to rectify this matter, with which he is clearly not satisfied?

These are pick and mix amendments. We have all kinds of things crossing back and forth from Bord Gáis, the county councils and Ervia. It is a case of "Whatever you are having yourself, Johnny." The amendments appear to be an effort to introduce a catch-all mechanism to allow local authority employees to move back and forth to Uisce Éireann with impunity.

The section is not clear on the bonus culture. Does it include bonuses? I may be wrong about the section and the Minister may well inform the House that it is not a pick and mix or whatever you are having yourself effort. I hope he will speak voluntarily rather than involuntarily this evening and we will be given answers in order that Deputies know the Minister meant to say what he said and said what he meant.

I am concerned to ensure the pension rights of workers transferring to Irish Water are protected, especially for workers who do not have large salaries. I note that section 9(1)(b) proposes to insert the following paragraph, "members of the staff of a local authority (unless their contracts of employment provide for a defined contribution scheme)." Will the staff who transfer to Irish Water enjoy defined benefits?

The section and proposed amendments refer to Irish Water not having any financial liability or responsibility in respect of a scheme prepared by the Minister under subsection (2). This statement is a cause of concern for employees, especially manual workers who will never receive a great pension. The value of local authority pensions is being eaten up by the universal social charge and other deductions. I am concerned that the pension rights of employees, specifically those who have salaries of less than €50,000, will be placed in jeopardy or made less secure. I ask the Minister to clarify the position.

While I do not wish to stray from the amendment, the people who stood to receive the greatest benefit from the bonus scheme were obviously holding the hand of the person who drafted the scheme because they were giving themselves bonuses of 17% and 18%, while lower paid workers were set to receive 8% of a much smaller amount. If this culture is reflected in the pension scheme, people will not have confidence in it. Many Irish Water workers will have salaries of less than €30,000 and certainly less than €25,000 net. Many will be also dependent on family income supplement. It is important, therefore, that their small pension entitlements are protected and, if possible, enhanced.

This is an important section because pensions are dear to people and cause a great deal of concern. People pay into their pension schemes for long periods to ensure they have certainty and security in retirement. It is important, therefore, that absolute clarity is provided when a new body such as Irish Water is being created and employees are transferring from Ervia, the local authorities and the Local Government Management Agency. As we have seen with many pension schemes, major problems can arise where there is any legal doubt or ambiguity, with the result that people take legal action and go before the courts. It is important that this does not happen in the case of Irish Water. The company's employees must have certainty.

I have been engaging with a number of workers in Galway who are transferring to Irish Water on pensions. Their trade union representatives in SIPTU and other unions have been also engaging with the Minister on the issue and I am pleased to note that this engagement has fed into the amendments.

On the bonus culture, I also understand the Minister, Irish Water and the board of Ervia have announced that the first task of the new board will be to produce a new pay structure, with a view to establishing a payment system in Irish Water that enjoys the confidence of staff and those who pay for water. People must know that the revenue from the bills they pay for a water service are used effectively.

Clarity has been provided to address the concerns of workers in respect of pay, conditions and entitlements. It is important that this is copperfastened in the Bill. In the period ahead, a new pay structure must be also introduced that will provide people with comfort that pay in Irish Water is fair, reasonable and transparent and enjoys public confidence. I welcome the amendments.

Deputy Cowen may be correct that the amendments arise from legacy issues. I am more concerned about the legacy left by other organisations and what we got wrong and right at the time. Previous speakers noted the importance of getting this right and ensuring that workers do not lose any of their rights, particularly pension rights, as a result of transferring to Irish Water. The letters of comfort provided to Team Aer Lingus workers were not worth the paper on which they were written.

It needs to be set in stone and the legislation needs to be watertight. That is not meant to be a pun.

It is not even about those with small pensions. The Minister is correct. Regardless of the size of a person's pension, if he or she paid into it and is entitled to it, it should be guaranteed that whatever he or she signed up to, whether with a local authority or another organisation, it should be transferred smoothly and seamlessly. That is what people want to hear and why the union lobbying has been so intense. We know what we got wrong in the past in regard to the many of the new organisations and bodies that have been set up which we have made a balls of, if one can excuse the expression. The most important thing is that we do not make the same mistake.

The amendments are trying to strengthen the position, in particular the sections that deal with workers' rights. When I spoke on the previous section, I mentioned rights. This is another section in which we should not undermine the rights of workers; rather, we should strengthen them.

I accept that there are many politically contentious issues in this Bill. This should not be one of them. We can talk about the bonus culture and other such matters, but this concerns issues related to people's pensions and workers. I would not accuse anyone in the House of not wanting to do the right thing. This section is about ensuring that everyone is protected and deals with a number of issues. The purpose of the section is to certify and put in place watertight consolidation to make sure everybody who has come into the utility is protected.

The purpose of section 9 is to provide for a number of technical amendments to superannuation provisions contained in the Water Services Act 2013 and the Gas Act 1976. It has been agreed that staff transferring to Irish Water will transfer with no less favourable pension terms. As we all know, this is a standard phrase. I was involved with a number of transfers within State bodies where I negotiated transfers and it is a phrase which has stood the test of time. The provisions regarding the superannuation in section 28 of the Water Services (No. 2) Act reflected the understanding that Irish Water would bear the liability of future pensions of staff transferred to Irish Water from my Department or local authorities, with deficits relating to past service to be met by the State or local authorities, through appropriate subvention.

Section 28 has not yet been commenced as Irish Water has concerns that the current wording would mean the financial liability for past service would be on the balance sheet of Irish Water, with local authorities or the State defraying the cost of paying the superannuation benefits. This would present a significant financial liability which could result in credit or funding issues for Irish Water, depending on how it played out.

For this reason, the amendments have been brought forward and we want to introduce them immediately before the section is commenced. Irish Water does not have financial liability for the pre-transfer service. It has been decided to provide for two separate pension schemes, one for Irish Water service which would be fully funded by Irish Water and would meet the required funding standards, and another for past service with local authorities of my Department which would be funded on a pay-as-you-go basis.

The new scheme to be established covers past service for local authority staff, which includes those from the Local Government Management Agency transferring to Irish Water following the termination of a service level agreement. This is provided for in section 19 of the Water Services (No. 2) Act 2013. It also includes local authority staff, including staff from the Local Government Management Agency or staff of the Department who, immediately before commencing employment with Irish Water, were employees of my Department or a local authority, and former local authority staff who resigned from the local authority and were employed by Bord Gáis and Ervia on an interim basis until such time as the Irish Water pension scheme was set up. Their contracts of employment include a commitment to transfer them to the Irish Water pension scheme on its establishment.

These amendments are necessary to clarify that Irish Water does not have the financial liability for past services of officers of the Minister or local authorities, other than the net effect of any increase in pensionable remuneration due to the actions of Irish Water. A separate scheme will now cover the past service of such employees and this will remain funded by the State. We are certifying what is necessary to clean up a number of technical points regarding pensions. The unions are privy to the ongoing discussions and will be anxious for these issues to be dealt with immediately.

I cannot recall which Deputy asked about secondment. All secondments are funded by the local authorities from which staff are seconded for the period of time involved.

There was some commentary on bonus payments. While that issue is not addressed in this section, it is important to say that I have been quite clear on this issue. I do not want and it is not my intention to see any form of bonus culture in Irish Water. I do not believe such practice is the best way to do things and it is not something I would have tolerated or established. I understand the process by which Irish Water was set up as a result of its parent, Bord Gáis Éireann.

Having said that, later in the Bill we will deal with issues regarding the board and its establishment, and I will be asking for support to increase the board numbers and bring in expertise, which I have said is necessary. The first task of the board will be to deal with this issue and examine the pay structure across the organisation in a reasonable way. We have to respect the fact that the unions have negotiated with Irish Water and we have to reflect on the fact that everybody who is working there has expectations. I have spoken to trade union officials who represent many of the workers. There is a way in which this can be dealt with reasonably. I will task the board, when it is constituted with new members and expertise, to deal with this issue.

I accept that, from the point of view of the public, the language, ideas and vision of people receiving bonuses and the way in which the system was constructed is worrying and concerns people. I can understand how that has emanated into a discourse of concern. It is an issue which will be dealt with it. I have spoken to the chair of Irish Water about it and I am quite confident it will be dealt with. In fact, it has to be dealt with as a matter of priority. It will form part of the discussions and negotiations which will be ongoing once the new board is constituted.

I accept the response of the Minister in regard to the technical issues related to the transfer of pensions and pension rights when one moves from one company to another, and that recognition of the past working service is enshrined in pension rights. I accept the technical aspects of the amendments to rectify that to ensure rights are protected. I acknowledge the opportunity the Minister has taken to elaborate on the broader picture of superannuation and pay, specifically performance related pay. It is something the public and many in here abhor. I note what he said in that regard.

The Minister has said that he thinks this issue will be dealt with, that it must be dealt with, that he expects it will be dealt with and he will instruct the board to deal with it. I take from that therefore that no legislation will be brought into the House to give effect to any future pay for those under contract currently. Perhaps the Minister will confirm this during debate tonight or tomorrow. Effectively, he is saying this issue is being put on the long finger and the new board will be asked to look at ways and means of addressing it. However, no indication is being given as to what reporting structure will be put in place so Members can be assured the matter will be dealt with effectively or that a timescale will be put in place under which these conditions for employees can be retracted.

Is this proposal only for future employees? I would imagine it cannot be retrospective, but will the Minister confirm that? It is incumbent on the Minister, having made public pronouncements that if he had charge over this process since inception, this would not have happened under his watch, to confirm how it will be reversed under his watch. He should do this more definitively than simply say he will give the new larger board this task. I believe the Minister has this responsibility and that he could bring forward proper and effective legislation to deal with the matter and that he should inform the House he will do so.

Quite a few senior staff have transferred from local authorities to Irish Water. These staff would possibly have completed 40 years service, entitling them to a full pension and that pension liability clearly rests with the local authority. However, when they transfer will they be entitled to a new pension entitlement from Irish Water as a consequence of the additional years of service with it?

In regard to the pay-as-you-go arrangement, does this refer only to people seconded to Irish Water? If so, does the Department have a separate budget for that? Clearly, these people would formerly have been local authority staff and the liability would have rested with the local authority. Presumably, that liability has transferred to Irish Water. Does the Minister know the amount involved in this or the number of people involved? Is it a small or negligible number?

It is a negligible number. I have some figures here and will read them into the record.

In regard to the bonus scheme, Irish Water tried to describe this as part of the way salaries and wages were constructed. The implication was salaries were discounted where work was not done correctly and that the bonus was not part of a bonus culture. In regard to how salaries are constructed, is all of the income pensionable or is the bonus segment not and is the arrangement built into the contracts? If so, is there an issue in regard to contracts being binding? Clearly there would be an issue for the new board in terms of this changing.

In the context of security for workers in regard to their pensions, there would be concerns about the viability of Irish Water. I presume that if Irish Water becomes unviable in future, whether in six months time, five years or ten years time, the former local authority staff would be re-employed by local authorities and their pension liabilities would be picked up by them.

I appreciate that Members have accepted that this section is quite technical and that it attempts to ensure everybody is protected.

Everybody has a legal contract of employment and all income is pensionable. There are issues relating to the performance model and for that reason I have stated publicly that the issue must and will be dealt with quickly. It cannot remain an ongoing issue. We will obviously have to look at some retrospection, but I do not believe this should cover a long period.

In response to Deputy Cowen, I do not intend to bring in legislation although that could be proposed. Everybody has a contract of employment and these contracts have been negotiated through the unions. Therefore, the best way of dealing with the issue is to negotiate further and introduce whatever model is required for the future.

In regard to those staff who have transferred from local authorities, while I have some figures on the numbers that transferred, I do not have figures on the number of secondments. I understand the number is quite small, but will get the figures for the Deputy and try to get them to her as quickly as possible. On those who have transferred from various platforms or organisations, including local authorities and the Local Government Management Agency, their pension entitlements depend on what status they transferred on. If, for example, somebody transferred his or her fund, that pension will be protected and Irish Water will continue with the pension for that person. Therefore, there will be two funds in respect of that person - defined benefits - and the person will receive a pension based on that.

However, there is a differentiation in regard to people who, for want of a better phrase, were "financially retired" once they transferred. This may have been for various reasons. For example, people may have started working earlier and reached 50 plus and then moved across to Irish Water. If they were "financially retired", in other words had chosen to leave or finish up, they obviously start off in Irish Water on a different pension scheme.

On the issue of bonuses, I wish to make it clear that what was negotiated in regard to payment and the model used was negotiated in a bona fide way. We must accept this model is not unique to Irish Water, but came about from how these issues are dealt with in other organisations. However, I accept the public has concerns and issues in this regard. These concerns relate to the fact that a percentage of a person's pay relates to the person's performance and performance rating. This is not a model I would have favoured if I had been starting from scratch. That said, I must deal with the issue and the public's concerns.

I have stated clearly the board must deal with this issue as its first priority and I believe an agreement will be negotiated.

I have spoken about this to the management of Irish Water and to the chairperson of the board and I made my intentions clear. I have also spoken about this issue to the union representative. I would rather that this happened as quickly as possible and that they sat down and negotiated whatever changes are needed and whatever model needs to be put into place to ensure all workers are protected and everyone is happy with the model and is paid a wage commensurate with their experience and position. It is a little unfortunate and disconcerting for many of the individuals.

The Irish Water workers I have met are fantastic people. Everyone will have their opinion on executives and their performance and so on. I understand that and I have heard commentary from Members, which I appreciate, but there are people working for Irish Water who go out every day and do a fantastic day's work. Great credit is due to them for the work they do and we should acknowledge that. It is not all about the commentary on bonuses and the issues that have been raised about managers and so on. Many people working in Irish Water's head office earn modest salaries and they are doing excellent work to set up the largest utility in the history of the State. They have progressed that well, given it is unique.

The workers on the ground dealing with the issues we have discussed in the House and who are planning for the future sometimes do not work in an acceptable environment. The way in which some of them have been treated is unacceptable. I am not talking only about people who work for the many different companies that won tenders and are contracted to install meters. It is disgraceful and outrageous to think that workers could be locked in a van for ten hours or more and that they could feel they could not leave the van for a long period. That is no way for people to be treated and every Member will accept that. Let us imagine a meter installer being followed home and assaulted. Everyone present would condemn that. At the end of the day, they are workers doing their work for an honest day's wage. The notion that they could be treated in this fashion is unacceptable. I could fill the House with stories about how they have increasingly suffered over the past number of months, although in recent times the problems may have dissipated as common-sense has prevailed given the coverage many decent people have seen about their treatment.

Everyone can have their issues, concerns and disputes about Irish Water but the company is engaged in a number of fantastic projects around the country, which are necessary. Irish Water staff are ensuring this work is done, for example, to remove the boil water notices in County Roscommon, to provide better services, particularly in the Dublin conurbation, and to make sure plants stay alive when at times that is marginal if they do not get in to do the work. They are ensuring people have a water service every day and night. Sometimes the manner in which they are treated is unacceptable.

This is about not only those doing the manual work or those doing the analysis, engineering work and so on, it is also about the workers who at a corporate level are working to deliver a service. They are doing their best as well. I have said out straight that lessons needed to be learned, particularly in the context of customer service. That is why the new telephone line is in place.

I have to ask the Minister to return to the amendments. He is into a Second Stage contribution.

That is fair enough.

We have to stick to the timetable. We are on amendment No. 32.

Workers need to be protected. These are technical amendments relating to their pension schemes and I ask for the co-operation of the House to support them.

I appreciate the Ceann Comhairle allowing me back in to contribute as I had to leave the House. I do not disagree with one word of the Minister's comments about the employees on the ground who have been intimidated and threatened, which is unacceptable, and the staff elsewhere in the company, even though I am fundamentally opposed to Irish Water. We all have stories about that.

I am concerned about the language the Minister has used about this issue and his reference to retrospection and asking the board to do the work that clearly should be set out in these amendments regarding the pay structures, performance pay and the bonus culture. He said that if he had been in office when the legislation was introduced, this would not have happened. There might be a different Minister in the office in two years. This is only a case of "live horse and you'll get grass" and the public will not accept that. This is the forum in which to deal with the legislation and whatever expertise the Minister provides for on the board, they will be faced with the legislation as passed by the House. They will say they cannot change the structures. That is not good enough and the public will not accept that. We are trying to make the legislation acceptable to the public but they will not accept that and that should be clear to all of us. We are here to amend the legislation and this is the opportunity, given all the time we are giving to it, including possibly sitting next week, to get it right. We did not get it right last week.

The Minister stated Irish Water cannot under any circumstances take on any financial liability. This is a one way street. The company gets all the properties rate free-----

These amendments relate to a superannuation scheme.

I am replying to what the Minister said. We put questions to him.

This is not about what the Minister said. We are discussing the superannuation scheme. There are four minutes remaining and three Members wish to contribute.

I accept that. We are putting the cart before the horse and this is the place to amend the scheme. There is no point in asking the board to do that unless they are magicians. It is like writing to Santa Claus and it is wishful thinking.

I wish to ask the Minister about pensions and section 9. I listened very carefully to what he said. My concern relates to the powers he has. I mean no disrespect but I am not so sure that he has that much power. I know it is a public company. The Minister knows how concerned we are about that - that it stays a public company. I am chairperson of the board of a small not-for-profit company. We set the pay. Under company law, the board sets policy in respect of pay structure and the same is true of pensions. If the board of Ervia decides to set pension and pay policy within certain parameters, I am not too sure how much leverage the Minister has here any more than the leverage he would have with Bord na Móna or the ESB. What kind of power does he have to intervene to say that they have gone too far? I believe the chief executive should not be getting the money he is getting. He is paid more than the president of France. We should not be paying people that kind of money. We do not need to do so. A maxim during the boom stated that if one paid people peanuts, one got monkeys but we paid them millions and we still ended up with monkeys.

There are two minutes remaining.

Could the Minister address the point concerning his powers relating to curtailing excessive pensions for senior executives and pay structures?

In respect of the Minister's point about workers being abused on site-----

This is superannuation - section 9.

I understand that but I would not be the first in here to stray from the subject.

I have the responsibility. There are only two minutes left and another Deputy wishes to speak so Deputy Wallace must stick to the section.

The Minister discussed the pensions policy and how it will come through the board. Irish Water is being set up so that it will be off-balance sheet so it can borrow. As a result, it is a private company with a majority public shareholding. It is publicly owned, although it is governed by private company law rules. I cannot think of any precedent where a private company would have its pension or pay structures legislated for in the House. It does not seem to make any sense whatsoever.

You said the charges would not be legislated for by the House either. You said that 12 months ago. You said this House would have nothing to do with charges.

Are there other elements of that kind? Could the Minister comment on that?

I apologise as I meant to give the number with regard to the transfer to the Deputy earlier. Approximately 144 have transferred and 145 from local authorities for asset management, three from local authorities under the customer operations side and 16 under support services. Wages are a matter for management at Irish Water. Under the board's guidance, it will have to deal with pay and all related issues. I have not seen a circumstance where the legislation that was referenced earlier on would be necessary or where it has happened previously. I want any changes to be done through negotiation.

In respect of Deputy Stanley's question, the term "no less favourable" comes to mind. The company must operate under section 28 of the Act. As long as it operates under section 28, if it deviates from acting under this section, whoever is Minister at the time would have to intervene and deal with it.

I am required to put the following question in accordance with the order of the Dáil of this day: "That the amendments set down by the Minister for the Environment, Community and Local Government to section 9 and not disposed of are hereby made to the Bill and that section 9, as amended, is hereby agreed to."

Question put and declared carried.
SECTION 10

I move amendment No. 36:

In page 12, between lines 10 and 11, to insert the following:

"(3) The Minister may request the Minister for Finance to make payments up to a total amount of €460,000,000 to local authorities for the purpose of repaying any Housing Finance Agency water related loans under section 5 of the Housing Finance Agency Act 1981 held by local authorities. The Minister for Finance shall make any such payments, subject to such conditions (if any) as he or she may determine, out of the Central Fund or the growing produce thereof.".

Section 10 provides that where the Minister makes an order to provide that the water services property is transferred from a local authority to Irish Water, any financial loans associated with the property are not automatically transferred to Irish Water. This section is being introduced to facilitate a more efficient transfer of water services assets and liabilities from the various local authorities to Irish Water. Under the current legislative arrangements provided for in the Water Services (No. 2) Act 2013, the Minister may designate by order water services property for transfer to Irish Water. Any liabilities, including loans, relating to such property would also automatically transfer on the same date.

In preparing for the transfer of property to Irish Water, it has become apparent that there are some issues with the automatic transfer of loans. For example, many of the loans taken out by water services property do not clearly specify the assets to which they relate. As such, it is not clear which loans would transfer to Irish Water. In addition, another important factor was the Government's decision that the debt owed to the Housing Finance Agency, HFA, should not transfer to Irish Water. Instead, these HFA loans, which are currently counted as part of the Government debt, will be unwound by the provision of the necessary finance from the Central Fund to the relevant local authorities to repay the HFA. Non-HFA liabilities, including loans, will be transferred to Irish Water as specified water services liability in accordance with section 14 of the Water Services (No. 2) Act 2013. This will provide a clear and more transparent process for the transfer of water services loans to Irish Water. The section provides that any transfer of property by the Minister shall not be treated as a disposal of property by the local authority. This is to ensure there is no adverse impact on the financial standing of the local authorities from the transfer of assets to Irish Water.

This amendment proposes to allow the payment to local authorities of €460 million for the purposes of repaying any HFA water loans. It is not proposed to transfer this debt to Irish Water as this would impact on Irish Water's debt-raising capacity with interest payable potentially impacting on it. As HFA loans to local authorities are already counted as part of the Government debt, it is now proposed to provide for the unwinding of this HFA debt. This will include the payment of funds to local authorities from the Government and this will be used to repay the loans.

This is a very serious amendment. We know the Water Services (No. 2) Act was in the main passed without discussion, scrutiny or adequate questioning. It was assumed then that the assets and liabilities of local authorities would in their entirety transfer to Irish Water. I know we and others put down many parliamentary questions in the intervening period seeking details of those liabilities and who exactly would be liable to repay them. We were conscious of agreements entered into for the maintenance of plant and treatment plants which were previously the duty of local authorities. We never got the sort of answers that gave us a conclusive indication of what the situation was.

We are now saying that the Department of Finance will make €460 million available to pay off those debts. When is this to be done and when was it decided? Has an audit been conducted on the breakdown of those funds countrywide? Will this arrangement impinge on the Irish Water model for off-balance-sheet borrowing under the EUROSTAT market corporation test? Will it be regarded as a further subvention on the part of the Government in addition to the 44% subvention which it assures us will allow Irish Water to pass the test?

We will have to stray slightly from the exact content of the amendment to consider the broader picture. This relates to another question I have put to the Minister on several occasions, in respect of which I am not sure I have been given the correct answer. What is the total value of the assets of the networks previously owned by local authorities and now being transferred to Irish Water? Have all of these assets been transferred? My engagement with several local authorities suggests that a full valuation of the assets has yet to be carried out. The figured bandied about for the subventions offered by the Government to compensate local authorities for the loss of income from commercial rates was approximately €60 million. Dublin and Waterford are the only counties in which full valuations have been carried out in recent times. The Government has to come clean on this. It would be ill-advised to approach the EUROSTAT test without detailed answers to these questions. Given that it is failing the test in this House, I have no doubt it will fail the test in Europe. In the event that this model, which is built on sand, fails the test in Europe, it will collapse and the Government will collapse along with it.

We learned today that the liabilities associated with the assets of Irish Water, for which we do not have full details 12 months after the legislation was brought into effect, will not necessarily transfer to Irish Water. Some €460 million of taxpayers' funds will be used to pay the outstanding debts. I do not know when this will happen or to what locations or infrastructure it relates. The Minister is asking us to accept this amendment in the absence of information about the other liabilities that may exist in addition to the €460 million relating to the Housing Finance Agency. What other maintenance contract agreements are in place throughout the country? Would it not be appropriate for the Minister to inform the House about this before introducing an amendment in the last hour of the last day? We heard threats throughout yesterday and today that if we do not allow the legislation to be guillotined, we will be hit with the charges that previously applied. We are supposed to take the blame for that even though we are only now learning that €460 million is being moved from the Department of Finance to meet liabilities to the Housing Finance Agency. Is that the full extent of the liabilities? Perhaps I am missing the point completely, but I am shocked at what I have seen in this amendment.

I have serious concerns about this section. We tried to address the issue of the assets and liabilities of local authorities with the previous Minister for the Environment, Community and Local Government, Phil Hogan, including their extent, their complex nature and the method for transferring them. This is my first term in the Dáil, but I have never seen a local authority by-law, even one pertaining to a graveyard or a parking regulation, being rushed through as quickly as the earlier legislation. I knew by Phil Hogan's face that the previous Bill did not deal with the liabilities of local authorities. We sought to find out the extent of the assets over a long period. Section 10 is an attempt to regain control of a situation that has gone out of control.

Water infrastructure is very complex and involves several dimensions in addition to the network. There are various types of plant. In County Laois, for example, there are several kinds of design-build-operate, DBO, plants. I always had a problem with DBO plants because they privatised water infrastructure serving villages and small towns. Senior officials in the Department of the Environment, Community and Local Government put a gun to the head of the city and county managers and local authority members. They were told they had to go with the DBO approach or they would not get funding for new plants. By involving a private company, they were able to get the money. We now find that local authorities owe €460 million to the Housing Finance Agency for these loans. That is a huge sum of money but it may not be the full story.

An issue also arises with public-private partnerships, PPPs. Portlaoise sewage treatment plant received an investment of €30 million and huge sums of money were handed over every year for its operation in addition to the moneys paid up front at considerable cost to the ratepayer, householder and taxpayer. How are PPPs going to be handled? There cannot be a one-size-fits-all solution. The original legislation was rammed through and signed into force on Christmas Day not by Santa Claus but by the President, who was just doing his job. The activation date for the legislation was 1 January 2014. At one second past midnight on that day, all water infrastructure in the State, which previously belonged to local authorities and the people, was spirited away to Irish Water. The issues of DBO and PPP plants have not been thought through properly.

Section 10 of the Bill provides that the divesting of any property, including interests in land, on the property vesting day is not to be considered a disposal of property by the water services authority concerned but as a transfer to Irish Water. This wording got around the important mechanism under section 183 of the Local Government Act 2001 so that members of local authorities could be pushed to one side by a bulldozer driven by the previous Minister. They did not have the right to exercise their powers to dispose of properties. Those who were democratically elected were marginalised. There are four Labour Party Deputies in the Chamber. How does this provision sit with them? They could not be happy with it. This provision does not sit right with me.

Suddenly, the Minister for Finance is going to make payments up to a total of €460 million "to local authorities for the purposes of repaying any Housing Finance Agency water related loans under section 5 of the Housing Finance Agency Act 1981 held by local authorities". That is a mouthful. The figure of €460 million is plucked from the air to meet a situation that was not even discussed here last year and has not even been waved through by local authority members. Members of this House have been rendered powerless to do anything about it. This is a huge figure.

There is also the question of meeting the EUROSTAT criteria. We have had many debates about that in the past week. The Government is winging this. How will this be treated by EUROSTAT and how will the figures add up? How will it sit with the imaginary conservation component of the conservation grant? The whole thing is an illusion. The Minister is creating terms to fit what he is doing and creating figures to catch up with what he should have done. No audit of the assets of local authorities has been done to date in 23 or 24 counties, not to mind an audit of the liabilities. What the Minister is doing here is serious stuff. It has not been thought through properly, so I will oppose this section.

Will the €460 million be borrowed money? How will it be funded? Will it be counted in the context of the EUROSTAT test? We were told that the conservation grant will not be counted in the Irish Water grant. We are continually told that the idea behind establishing Irish Water is to save us billions of euro, but all we can see at present are additional costs. Obviously, the reason for keeping the €460 million off the balance sheet is so that money can be raised through bank loans and other money generating opportunities such as bonds or the like. At present, it appears that Irish Water is doing some of its funding through overdrafts. I believe we should hear about all of these savings we are supposed to be making.

With regard to the assets, the impression has been given that the water and wastewater system is in universally dire condition. However, there are a number of assets and when the Irish Water team appeared before the Oireachtas committee its members told us about them. They said:

This team scoped out the full project to deliver a new company with the capability to manage all of the public water and wastewater assets and deliver services to customers. That programme was to run from April 2012 to April 2015 – with one of the key milestones to ensure that we had all of the systems, processes and capabilities in place to take over €11 billion worth of assets from 1 January 2014. The budget as submitted by Bord Gáis for the programme was €150 million with a project contingency of €30 million.

We have paid an amount of money to take over those assets, yet it is not clear if they have been accounted for, taken over or even if there has been an audit of those assets.

There was a discussion earlier about the staff who run these services. It must be said that some fantastic work has been done over the years under the local authority system. The systems were run to the maximum efficiency and the same people will be running the same water and wastewater treatment systems, whether they are called local authority or Irish Water staff. It is not a new bunch of people who have come in to do it. In fact, it will be delivered in the same way it has been delivered over the years.

We need to know if the Government is borrowing this money. If it is, how much are we paying for it, where is it being borrowed from and at what rate is it being borrowed? Is it included in the EUROSTAT figures and, if not, how can it be accounted for?

I am aghast at what I have learned about amendment No. 36 from the Minister. I am aware from being in business that if I submitted a set of accounts at the end of a financial year that contained these types of phoney figures, I would be brought before the courts by the Revenue Commissioners. It is just funny money. It is crazy. If it was Hallowe'en rather than Christmas, I would say it was a magician at work. Last week, we were arguing about the number of houses, which was underestimated by 350,000. Tonight, the Minister is seeking to transfer all of the assets, as was signed into law. I tabled two parliamentary questions to find out when it was signed into law. It was signed on 25 December, Lá Nollag, last year, so there are no ifs or buts. I have asked hundreds of times why there was such a panic that it was signed on that day, when the country rests except for the emergency services.

We are now told that no financial loans will transfer. I would love to be a business man who gets a deal such as this, where one gets the assets but no loans. In addition, €460 million of the Housing Finance Agency loans will be paid by somebody else. The somebody else is the taxpayers, the people who will pay for the water and all the other taxes. Nobody else will pay. There are no sugar daddies around who will be generous and cough up money. I have serious issues about this €460 million. There is no explanation of where it will come from. Has it already been paid? It probably has been. How will we keep it off the balance sheet? There is not an accountant or auditor in the country who would sign off on this set of accounts. One could not find one who would. A first year student accountant would not do it. In addition, nobody would go near the tax office with them because one would be run out of town. The tax office would bring the house of cards down. One would not be in business for long because the Revenue Commissioners would close it down, and rightly so. One just would not get away with it.

I am also concerned about the huge amount of design, build and operate projects. Unlike Deputy Stanley, I supported that as a county councillor.

I agreed with it at the time. It was a good idea to fast-track projects. There were 17 big projects in all the big towns in south Tipperary and in many of the smaller towns and villages. The schemes were done and handed over to a private company. I cannot recall its name. What is its position now? It is probably eight to ten years into a 20 year design, build and operate contract. Under that contract, I was assured it would hand over the plants in pristine condition, operating almost as they did on the first day apart from the normal wear of parts. What is the position with that project? What about the money that was provided by loan and given out on that contract by the county council at the time, at the behest of the Department of the Environment, Community and Local Government and the Department of Finance? As Deputy Stanley said, we did not have a choice. If we wanted to get the projects and sewers in the towns, we had to take that route. Otherwise, none of them would have been done. That is not to mention the countless other plants that have not been touched at all.

I am very concerned. The Minister is bringing forward this amendment to the Bill at the eleventh hour. This time last year the last Bill was rushed through the House. We left because there was only three hours for the debate, so one could not debate it. Rushed legislation is bad legislation. There is no time to debate or examine it. The former Minister was smug and scoffed at us when it was passed. His backbenchers told us he did all the heavy lifting and that everything was hunky-dory, but now tá sé imithe and the chickens have come home to roost.

I am extremely concerned about that and the so-called conservation grant. The figures were exposed last week. The Department's figure last week was €130 million. However, Irish Water sent out 2 million packs. It is not hard to break it up; there is no need for any phoney accountancy. It is €200 million, so there is a shortfall of nearly €70 million. The whole thing is farcical and beyond a joke. We are elected by the people, and the people are incensed. Who can blame them?

I would love to be a small businessman or an employee who gets this type of deal. We discussed the employers earlier under the last amendment. This just beggars belief. I am astounded and shocked. If the Minister presses this amendment I, like Deputy Cowen, challenge the four members of the Labour Party who are present. This might be passed, but it will be end game for the Labour Party in my home town of Clonmel, and is mór an trua é sin.

The figure of €460 million in the amendment is very big.

The method is complex in that it deals with asset shifting, liabilities shifting in the other direction and liabilities being paid down with the €460 million. It seems to be in contravention of what was promised in terms of assets and liabilities shifting to Irish Water, but maybe I am wrong.

I have three questions on the amendment. On Deputy Cowen's point, can the Minister explain how the €460 million was calculated? Was it on the back of a national inventory audit? Is it expected the full €460 million will be used? Is the €460 million from the Exchequer, as required in the amendment, new funding or money that was already ring-fenced? Will it put an additional charge on the Exchequer? We have an asset with a liability against it. The asset is going to Irish Water and the liability is staying with the local authorities. The Exchequer is giving money to the local authorities to deal with the assets and, presumably, the local authorities will pay down the liabilities in full. Does it mean the loans will be wiped out and the Exchequer will pick up an additional loan of €460 million? To help me and the House understand what is transferring, I would find it very useful if the Minister could walk us through a single, real example.

Based on the amendment, what will happen to the assets and liabilities, and what will happen to the Exchequer as a result?

The Minister often feigns shock at the idea that anyone could suggest privatisation is a possibility. The Government repeatedly states that nobody in the Dáil could possibly want Irish Water to be privatised. I would hazard a guess that he is incorrect although they may not feel able to put forward the idea now. The same Government wanted to privatise our forests and, if it felt it could get away with it, would like to privatise our water services sooner rather than later. Is it any wonder people have concerns when there is a section devoted to transferring assets but not liabilities? It is gift wrapping the valuable assets held by local authorities, handing them over to a semi-State body, Irish Water, without the associated liabilities and debts.

Would the Minister not agree, at least on a theoretical level, that it would make Irish Water a more attractive option for any future major multinational corporation seeking to buy it in the context of a future privatisation? The money that is to come from the Department of Finance to the local authorities does not deal with the fundamental question. It is a transfer from one part of the State to another, but the semi-State company is being created with assets and lesser liabilities and it has the potential to be privatised in the future. Does the Minister not accept that there is a good reason for people to have concerns about it?

Already, creeping significant privatisation is under way in our water services in the form of the design, build and operate, DBO, model. Major multinational corporations which would like to buy our water services in the future have 20-year contracts to design, build and operate improvement schemes, sewerage schemes and water treatment plants throughout the country. Large parts of our water infrastructure are already being taken over by the private sector through DBOs on the basis of profit with no interference by the State, public or taxpayer in those 20 years, after which, presumably, another 20-year contract will open up. The purpose of the magic, off-balance sheet operation in which the Government is engaged is to make it easier for Irish Water to borrow money on the international markets. The Government is trying to create the impression that there is free money out there, that if one takes Irish Water off balance sheet one will be able to generate money one would not otherwise be able to generate. People understand that any money Irish Water borrows must be paid back by the people through water charges.

People have Detroit in mind, given that the Detroit Water Brigade was here. Detroit Water was not privatised, but had a fund-raising model that was akin to the model the Government proposes for Irish Water, a model of borrowing off balance sheet through international bondholders. Although, formally speaking, Detroit Water was in public ownership, the primary way the agenda of water privatisation was pursued, resulting in the shut-off of water to tens of thousands of people, came from the role of the bondholders in the off-balance sheet finance. Of every dollar Detroit Water collected in revenue, 50 cent went to the bondholders and the key demand for the shut-offs came from the bondholders and the credit rating agencies. This is the positive story of what the Government is proposing. This is why it has such a section to make it easier for Irish Water to borrow on the international markets. This is the Trojan horse of water privatisation. Water privatisation will be pursued through the DBOs and the funding model well in advance of the actual potential privatisation, if this or any future Government were to get away with it.

Most European countries have a public system of water supply which is operated on a commercial basis by public authorities or enterprise and which impose a charge on households. The fact that Deputy Paul Murphy had to go all the way to Detroit to get an example to back up his argument substantiates the Government's claim that Irish Water will work. It is not for privatisation. We are following a model that is the same in most of Europe.

He could have gone to the UK.

The only places one can find publicly regulated but privately owned and operated water services are England and Wales. Even Northern Ireland does not have it. The Deputy's arguments are wrong. According to the Northern Ireland Water website, of which Deputy Stanley would be aware, a scheme of charges for 2014-2015 includes domestic water supply. Nobody is saying Sinn Féin is going to impose charges on the people of Northern Ireland. Where does the argument go?

The Northern Ireland Minister for the Environment is from the SDLP, not Sinn Féin.

The Opposition is using silly arguments. This is a very effective means of managing a utility which works across Europe. Next time Deputy Paul Murphy is having a protest outside and needs to get somebody up on the bandstand with him, maybe he might try and find someone closer to home to back up his arguments.

We will need a Greek person there.

The Opposition might bear in mind that the country is in a very difficult financial situation and it is important Irish Water gets a fair wind in its establishment.

Could the Minister confirm that the €460 million will not have to be paid by Irish Water or the local authorities-----

Who will pay? Santa Claus?

-----and that this is removing a cost from both Irish Water and the local authorities?

The issue is being pushed into a bracket in which it should not be. It is a necessary transaction. While it is a large figure, it has been flagged previously.

Let the Minister make his point. Time is limited.

Local authorities have water related loans totalling €600 million.

That figure is broken down as follows: €150 million from various commercial lenders and, as has been outlined, approximately €450 million from the Housing Finance Agency. In May 2014 the Government agreed that these loans should not be transferred to Irish Water, as the combination of these loans and other liabilities, estimated at approximately €200 million, would place an unnecessary burden on Irish Water's customers.

When were Members informed about this?

Moreover, if one takes account of the fact that the loans were included-----

On a point of order, the Minister has referred to a decision made in 2014 that contravened the terms of previous legislation, the debate on which was guillotined in this Chamber last December and which set out the authority for Irish Water to take on board assets and liabilities. It was then decided in May 2014 that this would not be the case and that the liabilities would not be taken on board by Irish Water. Would this not have required legislation to be passed in this House?

Were Members told about it?

It contravened the terms of legislation-----

I am sorry, Deputy, but I have not-----

-----and no matter how ridiculously it was put through the House, it was nonetheless legislation passed by the majority of Members of the House.

I do not have the answer to that question.

It set out clearly that the assets and liabilities would be transferred to Irish Water. Members still do not know what the assets are or how much they amount to. They have now been told - at this late hour as usual - that there is €460 million owed to the Housing Finance Agency which will be financed by the taxpayer. As for the outstanding €150 million pertaining to commercial loans, it is not known when or how it will be paid because there is no provision in the amendment before Members. I simply must ask the Minister what authority the Government had to make that decision in the absence of proper legislation being put before the House?

This is Committee Stage and I have just arrived in the Chamber. Was the Minister in the process of explaining this?

Yes, a Leas-Cheann Comhairle, and I will go through it now.

Work proceeded during the year in establishing the full extent of the liabilities, other than loans, and they are now estimated at approximately €50 million, rather than the previous figure of €200 million. Therefore, it should be possible to accommodate the €150 million of local authority water services-related debt held by commercial banks within the €200 million liabilities figure already included in the regulated asset base by the Commission for Energy Regulation. In addition, it now is proposed that the €450 million owed to the Housing Finance Agency should be-----

The Minister said the figure was €460 million a while ago. On a point of order, is the amount €450 million or €460 million?

That is not a point of order.

One presumes it is €460 million.

He said €460 million.

There is a difference of €10 million.

The Minister is responding.

Is it dropping by €10 million every few minutes?

Please, Deputy, the Minister is responding.

For the purposes of clarity-----

I seek clarification. Is the figure €460 million or €450 million?

The Deputy will get it.

A Deputy

Deputy Mattie McGrath is confusing everybody.

I am not confusing anybody.

It is under €460 million.

The Minister is making it up as he goes along.

Please, Deputies, on all sides, the Minister has the floor.

It is "Father Ted" economics.

For the purposes of clarity, these is a range of loans and the figure is under €460 million; I understand it is closer to €450 million. In addition, it now is proposed that the €450 million owed to the Housing Finance Agency should be unwound by the provision of necessary finance from central funds. I am talking about debt with local authorities being transferred to central funds. It is not with Irish Water and will be paid from central funds.

Therefore, it is a subvention.

In summary, it makes sense not to transfer the Housing Finance Agency loans from local authorities to Irish Water for a number of reasons. First, Irish Water's cost base will be reduced and it will not be required to take on other local authority loans in respect of the €450 million in loans for water infrastructure. These loans originated within the Housing Finance Agency and, to answer Deputy Donnelly, are already counted as part of the Government's debt. Local authorities will not-----

The point of clarification was about whether it was already accounted for in the budgetary figures. I appreciate it is not a debt-----

-----but is the figure of €450 million or €460 million already accounted for in the budget?

Of course, it is, as the local authorities owed it.

Of course, it is. Local authorities will not be left liable for these loans which will be recouped from central funds.

That is, the taxpayer.

It is already Government debt.

It is another major sweetener for Irish Water.

I do not see it that way at all.

Members do not know how much the assets are worth.

Can we have some order, please?

Yes, it is €11 billion.

It is €11 billion.

Approximately, yes.

Will the Minister put that in writing?

Yes, I will.

The real issue is that there is a list of loans which were taken out by local authorities. I do not hear Deputies present complaining about how local authorities borrowed this money during the years to ensure services were provided across the country.

Of course not. They voted for it.

They were members of the local authorities that decided to do it.

The provision being introduced is to facilitate the more efficient transfer of water service assets and liabilities from the various local authorities. Under the current legislation enacted in 2013, the Minister may designate by order water services property for transfer to Irish Water. Liabilities, including loans, relating to any such property would also automatically transfer at the same time. However, section 10 provides that where the Minister makes an order to provide that the water services property is transferred from a local authority to Irish Water, any financial loan associated with that property is not automatically transferred. In preparing for the transfer of assets and loans and considering that aspect it became apparent there were some issues which meant that an automatic transfer in all cases would not necessarily be possible. This must now be reflected in the legislation. For example, some of the loans taken out by various local authorities did not automatically and absolutely state the assets exclusively to which they belonged. There are some related issues and the amendment is necessary to ensure it is not done automatically and can be done on a case by case basis.

What about EUROSTAT?

There are no issues in respect of EUROSTAT.

Why would there not be?

There are no issues with regard to the market-----

It contravenes the Water Services (No. 2) Act 2013.

There are no issues-----

Does the Minister think not?

One voice, please.

The Deputy asked me to answer a question and I am giving him my answer. There are no related issues. I repeat, this is already Government debt. That is a simple fact.

Yes, but it was assumed that it would be Irish Water's responsibility.

Wait one second.

Assets and liabilities

Moreover, if it was transferred to Irish Water-----

Now it is not being transferred.

Yes, it is not being transferred.

It is a subvention.

However, if it was transferred to Irish Water, it obviously could result in changes to its cost base that could have an impact on everything relating to it in respect of-----

Paying the bills.

Accountancy trickery.

It is not accountancy trickery.

It would be if it was not Government debt, but the Deputy should note it is already Government debt.

In response to issues raised regarding a list of local authorities and to provide the rationale for the figure of €11 billion, based on local authority accounts for 2013, a considerable amount of work has been undertaken in 2014 to identify all loans and liabilities. This work is only being signed off on by local authorities and I do not believe we will have a full picture for a short while yet because the work is ongoing. It is year one and it is being based on the 2013 accounts. Deputy Barry Cowen put a question directly to me concerning the current value of the assets. They are estimated to be worth approximately €11 billion. I am unaware of whether the Deputy has been provided with that answer previously and, if not, I am glad to be able to give it to him.

Deputy Brian Stanley referred to maintenance contracts.

The design build contracts were transferred to Irish Water by statutory instrument and a list is publicly available. If the Deputy cannot get hold of it, I am willing to provide it.

I will conclude by saying to colleagues who have asked on numerous occasions that this component of the Bill has nothing to do with the market corporation test. It will have no impact on the it.

The Minister constructed Irish Water.

Our debt is our debt as a nation. Deputies can say whatever they want but this will have no impact on it.

Why is it off-balance-sheet?

The legislation strengthens our position on the future market corporation test.

The time permitted for the debate having expired, I am required to put the following question in accordance with the order of the Dáil of this day: "That the amendment set down by the Minister for the Environment, Community and Local Government to section 10 and not disposed of is hereby made to the Bill and that section 10, as amended, is hereby agreed to in Committee."

Question put:
The Committee divided: Tá, 76; Níl, 41.

  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Donohoe, Paschal.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Heydon, Martin.
  • Humphreys, Heather.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • Lyons, John.
  • McCarthy, Michael.
  • McEntee, Helen.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • McHugh, Joe.
  • Maloney, Eamonn.
  • Mitchell, Olivia.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Neville, Dan.
  • Nolan, Derek.
  • Noonan, Michael.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Reilly, Joe.
  • Perry, John.
  • Phelan, Ann.
  • Phelan, John Paul.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Ryan, Brendan.
  • Sherlock, Sean.
  • Stagg, Emmet.
  • Stanton, David.
  • Tuffy, Joanna.
  • Twomey, Liam.
  • Varadkar, Leo.
  • Wall, Jack.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Colreavy, Michael.
  • Coppinger, Ruth.
  • Cowen, Barry.
  • Creighton, Lucinda.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Donnelly, Stephen S.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Flanagan, Terence.
  • Fleming, Sean.
  • Fleming, Tom.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Kelleher, Billy.
  • Mac Lochlainn, Pádraig.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Murphy, Catherine.
  • Murphy, Paul.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Smith, Brendan.
  • Stanley, Brian.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Seán Ó Fearghaíl.
Question declared carried.
Progress reported; Committee to sit again.