Colossal consultancy spend on Irish Water nothing new
Analysis: new State bodies are quickly overrun by armies of consultants
Irish Water’s headquarters in Dublin: the new body spent €50 million in 12 months, before the new utility was even set up by legislation. Photograph: Brenda Fitzsimons
When the ESB was set up in 1927, all it needed was a drawingroom flat in Dublin’s Fitzwilliam Street to provide office space for its full-time chairman and a secretary. The real action was elsewhere, mainly in the construction by Siemens of the Ardnacrusha hydroelectric scheme.
Nowadays, newly established State bodies soon become soakage pits for an army of consultants, as is clearly shown by the €50 million spent by Irish Water last year – before the new utility was even set up by legislation.
After this was branded as scandalous, Irish Water disclosed that the spending included expert advice from the likes of IBM, Ernst & Young, Accenture and Oracle on information technology, billing and customer service as well as financial and asset management systems.
Irish Water’s first chief executive, former Dublin city manager John Tierney, came from a culture in which there was nothing unusual about paying €32 million to engineering and public relations consultants RPS to act as “client representative” for the ill-fated Poolbeg incinerator.
The contract was only terminated after two Sandymount residents, Joe McCarthy and Valerie Jennings, complained to the European Commission, which ruled last November that it did not comply with EU law. So far, €95 million in public money has been spent on Poolbeg.
Two of Irish Water’s senior executives – head of asset management Jerry Grant and head of corporate services Elizabeth Arnett – had previously worked for RPS.
The transport sector has proved particularly lucrative for consultants. Some €50 million was spent on studies, “study tours”, reports and technical advice on the introduction of integrated ticketing for public transport services in Dublin – ultimately producing the Leap card.
The Railway Procurement Agency spent €165 million on Metro North, a largely underground light rail line linking St Stephen’s Green and Dublin Airport – largely on consultancy services to design and progress the project. A further €19 million was spent on the fanciful Metro West.
Both projects have been pigeonholed and may never be built. Dart Underground, designed to integrate Dublin’s disparate suburban rail services, cost almost €44 million – most of which went to consultants. It has also been “postponed” due to the recession.
For years, the National Roads Authority paid consultant engineers for the design of overbridges on motorways. Each bridge had to be individually designed, as if no other bridge had ever existed, rather than having a generic design that could be adapted.
The abortive National Children’s Hospital plan for the Mater site in Dublin – a massive building ultimately shot down by An Bord Pleanála because of its size – cost taxpayers at least €32 million, mainly in fees for design and procurement.
Nama also relies heavily on consultants. Last month it was revealed that it paid out more than €143 million in consultancy fees for portfolio management, legal advice, finance and technology costs and audit reports since it was set up in 2009.
What makes Irish Water remarkable is that it managed to spend €50 million on consultants in just 12 months – although Mr Tierney has insisted this was accounted for by set-up costs and asserted it would pay dividends by putting the right systems in place for water charging.