Irish Water changes will prove costly, warns Eamon Ryan

Green Party leader queries why Coalition changed remit and structure of body

Green Party leader Eamon Ryan, a former minister for energy and natural resources, said the Fine Gael and Labour Coalition has three fundamental questions to answer on how the new utility was conceived and came into being.  Photographer: Dara Mac Dónaill/The Irish Times

Green Party leader Eamon Ryan, a former minister for energy and natural resources, said the Fine Gael and Labour Coalition has three fundamental questions to answer on how the new utility was conceived and came into being. Photographer: Dara Mac Dónaill/The Irish Times

Wed, Jan 22, 2014, 01:00

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Green Party leader Eamon Ryan has said that three crucial changes and decisions made by the Coalition in setting up Irish Water may potentially cost the taxpayers millions of euro.

Mr Ryan has said the Fine Gael and Labour Coalition has three fundamental questions to answer on how the new utility was conceived and came into being.

The first was the decision by the new Government in March 2011 to change the tender offering consultancy companies the chance to assess the best model for providing water services in Ireland.

Mr Ryan said the original tender was drawn up while Fianna Fáil and the Greens were in power and sought assessments of different models. A single utility company was one possibility, but there were also others, including a number of regional water companies, each based in a particular river basin.

However, when the new Coalition came into power the terms of the tender were changed, with the only option being that of a single company.


Tender
“Why was the tender for the independent assessment changed so that there was no analysis of whether centralising water services was a good idea in the first place?” asked Mr Ryan.

The second question raised by Mr Ryan, a former minister for energy and natural resources, was why the Government rejected the main finding of consultants PWC, commissioned to undertake the assessment. The report recommended that the new company be a stand-alone utility and not form part of an existing utility.

The Government did not follow this advice, instead granting Bord Gáis Éireann the right to set up the new utility as a separate company within the group.


Disadvantages
Mr Ryan referred to the PWC report finding that while there were some advantages, they were outweighed by disadvantages including the potential impact on borrowing power; constraints on sharing; and a requirement to maintain separation of the networks and supply businesses.

The Green leader also contended that a proper value for money audit had never been conducted to back up the claimed savings.

“The Government has not explained how and when the gargantuan cost of establishing Irish Water will be recouped. [Minister for the Environment] Phil Hogan talks vaguely of “efficiencies” but the public has a right to know at what date Fine Gael’s political project of centralising water services will start to pay dividends, if ever,” he said.

That issue of savings was also raised by Fianna Fáil’s Barry Cowen and Sinn Féin’s Brian Stanley at yesterday’s hearing of the Oireachtas environment committee, where Mr Hogan presented his department’s estimates.

Both challenged the claim by Mr Hogan that the new utility would achieve €2 billion in savings over the next seven years and asked him to produce a detailed breakdown.

Earlier, Taoiseach Enda Kenny defended Irish Water and its chief executive John Tierney, describing the current provision of water services in the State as unsustainable and saying he has full confidence in Mr Tierney.