Pat McDonagh claims Irish Water quoted €720,000 to connect motorway plaza

Supermacs owner Pat McDonagh has said that water connection charges are placing a “stranglehold” on commercial development, claiming he was quoted €720,000 to connect a motorway services plaza he is developing.

His comments follow similar criticisms from some politicians and the Construction Industry Federation, which has suggested that Irish Water is seeking to fund its work through high levies on businesses.

Mr McDonagh said the €720,000 quote he received for water and waste water connections for the Kinnegad Plaza at the junction of the M4 and M6 motorways was a multiple of his own contractor’s estimate of €170,000.

He said that after discussions with Irish Water on the standards required, road opening licences and development fees, the two parties settled on a bill of €272,750, with the work carried out by Irish Water’s approved contractor.

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However, Mr McDonagh said he was still concerned about the opaque nature of the process and the gap of almost €450,000 between the first quote and final bill. He said the comparable cost for waste water and infrastructure fees at his Portlaoise Plaza was €292,400, but that the distance for the connecting pipe there was “just five yards” compared to “over 300 yards” at Kinnegad.

“These charges are making people pause. I think it is absolutely a stranglehold on development. People are are putting off commercial developments as they try to see how realistic it is at the moment,” he said, adding that he was concerned about the potential costs of further similar developments such as one in Tuam, Co Galway.

Up front fees

The federation has been critical of the costs involved in Irish Water connections, with a spokesman saying this was particularly the case in housing estates where Irish Water sought connection fees “in full and up front”. He said the requirement was making banks question if some projects were viable.

In a pre-budget submission, the federation called on the Government to increase Irish Water’s funding by €2 billion annually so commercial customers did not carry the brunt of funding the State’s water infrastructure.

A number of members of the Oireachtas Committee on Housing last month criticised Irish Water over commercial connections. Senator Mary Fitzpatrick said she had been “repeatedly told by local authority members, members of the public and stakeholders...that one of the greatest barriers to increasing housing supply is a lack of water and wastewater treatment infrastructure”.

In response, Irish Water said the utility faced a legacy of different charging regimes and standards for connections. Prior to its establishment there were 57 different charging regimes with more than 900 different connection charges across the 31 local authorities.

Charging policy

Irish Water said its national connection charging policy “went live” on April 1st 2019 and this included a single set of standard connection charges for connections of up to 10m from the property boundary, with further charges applying where the distance is greater.

These further charges are calculated based on the average of the utility’s eight approved regional contractors’ rates and “are calculated in an equitable manner based on the construction work required, such as ground conditions, other services or utilities in the area, traffic management requirements, materials required, health and safety considerations and road opening licences and road reinstatement requirements”.

Irish Water said it was working with the construction industry to develop an accreditation scheme for self-lay contractors.

“This will ensure the mistakes of the past are not repeated, avoiding legacy issues like leakage, environmental issues and impacts on the customer.”