Department of the Environment knew Irish Water consultants cost ‘last March’

The Department of the Environment knew last March how much Irish Water was spending on outside consultants, an Oireachtas committee was told yesterday.

The company's chief executive John Tierney told the environment committee Irish Water kept the department abreast of its spending costs, and its estimates that it would spend €85 million on consultants by next year.

However, Mr Tierney said he had never spoken to Minister for the Environment Phil Hogan or Fergus O'Dowd, the junior minister at the department, on detailed spending.

Mr Hogan’s spokesman last night said it was still the position that the Minister was unaware of the detailed breakdown of how Irish Water was spending the €180 million it needed to establish itself.

“The Minister was aware of the overall figure, and that external consultants would be needed, but did not know the detail,” the spokesman said.

The department is likely to be pressed on its oversight of the spending when it appears before the Oireachtas Committee of Public Accounts (Pac) later today.

Mechanism review
The Pac will review "the oversight and accountability mechanisms put in place in respect of Irish Water".

Mr Tierney said he could "absolutely" say as a fact that Irish Water could not have simply relied on the existing resources of its parent company, Bord Gáis, to establish itself. He stressed outside consultants were needed.

Mr Tierney said the vast majority of consultancy spend, €44.8 million, would go to IBM.

A further €17.2 million would go to Accenture, with €4.6 million to Ernst & Young

McCann Fitzgerald solicitors will get €970,000, while A&L Goodbody will receive €2.9 million. KPMG will get €2.2 million, while a further €13.3 million had gone to 22 contractors.

Other contracted companies include Price Waterhouse Coopers (€2.18 million), Abtran (€1.6 million) and Fujitsu (€1.02 million).

Spending required
The spending was required to introduce systems for customer care and billing, work and asset management, as well as for financial, procurement and capital project management purposes.

Other works to be completed in the next year include “a geographic information system” and a “mobile workforce management system”.

Mr Tierney said Irish Water informed the department about the final outcome of the procurement process in March 2013, which would have included a detailed breakdown on the amounts going to individual companies.

However, the department queried the estimated spending between September and November 2012, including “queries on budget breakdown, substantiation of items, and queries on procurement process for external consultancies” Irish Water said these “were all dealt with”.

The department took up to three months to approve the €180 million in establishment costs, which included estimated spending on consultants, for Irish Water.

Mr Tierney said Bord Gáis, Irish Water’s parent company, made the Government aware of the need for external consultants from the beginning.

“Ever since the outset of Bord Gáis’s submission, they were clear on the necessity to do this,” Mr Tierney said.