Bord Gáis chosen to operate Irish Water

 

MINISTER FOR the Environment Phil Hogan has said the establishment of Irish Water will be the biggest change in the development of utilities in the State since the setting up of the ESB.

Mr Hogan said that the Government had decided yesterday the company will be operated by Bord Gáis Éireann as an independent State-owned subsidiary and would remain in public ownership.

Speaking at a press conference at Government Buildings following yesterday’s Cabinet meeting, the Minister said the programme to install water meters in more than one million Irish households would be “90-95 per cent” completed by the end of 2014.

While the pricing level and pricing policy will be set by the regulator, the Commission for Energy Regulation, Mr Hogan said that households would begin to receive bills from 2014. Households without meters at that juncture would be billed using an assessment of their water usage.

The introduction of water charges is a condition of the memorandum of understanding agreed with the international troika as part of the bailout programme.

Mr Hogan told the conference that the Government recognised the reality where people faced a series of tough budgets, job cuts, higher interest rates, and, in some cases, negative equity.

“I know it will be difficult for some people to find money to pay for this finite resource,” he said.

Setting out the case for the new tax, he said the Government did not want to increase income tax, or to tax business or cut social welfare payments. But he said the considerable annual public deficit of €18 billion necessitated a broadening and reform of the tax system.

“In just 20 years global demand for water will be 40 per cent higher than it is today so Ireland’s valuable water resources will play a vital role,” he said.

“The current system is not sustainable. The funding level is not sustainable.”

He said the leakage levels of 40 per cent were too high; he also said the fact that 34 local authorities were operating separate public water systems resulted in too much fragmentation.

He confirmed that the National Pensions Reserve Fund would lend €450 million to Irish Water to install meters and to establish operations, and that the costs of those would probably be passed on to customers by way of a standing charge over a period of 20 years.

Mr Hogan denied the Government’s response to weekend reports suggesting a €300 upfront charge had been confused and contradictory.

He insisted the reports had been wrong and he could not take blame or responsibility for what had appeared in newspapers.

On the decision to award the tender to Bord Gáis rather than to the other bidder, Bord na Móna, he said that the outside assessors, PricewaterhouseCoopers, had made the decision based on a long list of criteria.

He said 150-200 contracts would be awarded around the country to carry out installation for bundles of 5,000 to 6,000 households. The project would be completed over a period of two or three years, he added. “I expect that installation will start in October and that households will be charged from 2014,” he said.

Some 300,000 households will not be included in the initial phase of the meters, including apartments. He also confirmed the charge would only apply to public water schemes, and those households which are part of private group water schemes would not have to pay water charges.

He said Irish Water would be set up on an interim basis as legislation would be needed to put it on a statutory basis.