Irish Water spends €25m a year on billing, committee hears

Irish Water would save €25 million a year if it stopped billing customers, an Oireachtas committee has been told.

The Oireachtas committee is examining the future of water charges.

It was established last year to consider a report on the charges by an expert commission.

The report proposed that water services be funded by general taxation, rather than by a separate charge, and each household be given an average water allowance, to be determined by the Commission for Energy Regulation (CER) - Ireland’s water regulator.

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On Thursday, Irish Water told TDs and Senators on the committee that the annual cost of billing customers for water charges is €25 million, which includes €13 million for processing bills, €10 million for the contact centre and €2 million in staff costs.

Meanwhile, Michael McNicholas, the chief executive of Ervia, which runs Irish Water, defended the amount the utility spent on consultants, insisting the consultants were “international experts”.

Mr McNicholas said the €73 million spent on consultants was not wasted and was necessary to establish Irish Water.

He said the experts were tasked with building the software and computer systems needed to establish a national water services company.

He said the cost of hiring the experts was “really efficient”.

Water meters

On Wednesday, the CER told the committee that Irish Water should stop installing water meters in existing homes.

It warned that the cost of completion would cripple efforts to improve water quality and supply.

In a submission to the committee, the CER said finishing the programme was not a priority.

“If a decision was taken to complete further metering, then either significant additional funding would have to be made available or a significant level of necessary capital expenditure would have to be deferred from other priorities for water investment for the time period 2017-2018,” the CER said.

The CER also proposed that householders be given the option of installing a meter. The meter would then entitle them to a tax rebate, if they used less water than average.

It also said grants should be given to people who invest in water-saving measures and that the installation of water meters in new houses and estates should be mandatory.

In a separate submission on Wednesday, Irish Water said €13 billion must be invested in Ireland’s water and waste-water services to ensure safe drinking water and proper sewage treatment.

It said it does not believe water services should be funded wholly or largely through the exchequer, since this would put investment in competition with public spending demands. It said guaranteed funding was needed.

It confirmed it would need €714 million in funding this year, to include the annual €475 million subvention plus €239 million in replacement revenue, in lieu of its previous income from domestic billing.