Q&A: Will Fianna Fáil rue its stance on water charges?

Conor Pope: Few winners as Irish Water proves stumbling in government formation

A standalone water utility now exists and will most likely continue to exist, but it might get a new name. File photograph: Getty Images

A standalone water utility now exists and will most likely continue to exist, but it might get a new name. File photograph: Getty Images

 

How are the government formation talks going?

Not so well. Water is a big stumbling block, despite reports that Taoiseach Enda Kenny and his Fine Gael negotiating team are willing to offer a suspension of the somewhat controversial charges in return for the support of Fianna Fáil for its minority government.

Is that good or bad news?

Oh, that depends on who you are and what side of the water feature you’re sitting.

Remind me again why Irish Water was set up.

Well, back when Irish Water was just a twinkle in the eye of John Gormley (and a previous Fianna Fáil administration), it was about water conservation. It was also considered a good idea to have one body overseeing all investment in water and waste instead of 34 local authorities doing it.

A metered service would show where the leaks were and how we could do our bit to save this precious commodity. Then the crash happened and all the talk was about money and an end to free water – despite the fact we were paying more than €1 billion each year for it out of general taxation.

Anything else?

Yes, another reason Irish Water was set up was to create a utility that would be able to raise money to cover the cost of investment in infrastructure without having to go cap in hand to central government. This is considered useful in recessionary periods, as it stops an underground and largely unseeable water infrastructure competing with highly visible hospitals, schools and old-age pensions for money. And make no mistake: in such a contest, water will always lose – at least while it continues to come out of our taps in a clean and drinkable manner.

So why is Fianna Fáil keen to put Irish Water on the bold step?

Because it promised the electorate it would do so.

Did it make any other pre-election promises?

Ah yeah, but it doesn’t seem as bothered with them which would suggest – to a cynic at any rate – that what is happening now is all down to political expediency.

Enough about them. Will I have to pay my next bill? And what about my last one?

Well, Irish Water insists that under the law it is obliged to continue billing people and people will be obligated to pay all money owed to it, come what may. In the absence of any legislative changes nothing else changes, it says.

So should I pay my next bill?

Only you can decide. More than 900,000 of the 1.6 million households paid a bill in the last billing cycle – which was before the election. We should have new figures soon that will show how many people were talked out of paying their most recent bill because of the political impasse and the promise the utility would be scrapped. I’m no Mystic Meg but chances are the numbers paying will have fallen.

What would happen if the system was suspended?

A standalone utility now exists and will most likely continue to exist, but it might get a new name. The conservation element is likely to be washed away, the meters unused and the ability of the utility to raise its own money for investment will disappear.

But water will be free at last, right?

Oh, no, we will still have to pay for it – and we might even have to pay more for it.

How does Irish Water feel about all this?

It is hard to say as the last thing anyone in the company wants to do right now is do or say anything that might make things worse – or at least attract more negative attention so tight-lipped is the order of the day. But insiders in the utility are, to put it mildly, irked with how things have been playing out. For years they have been demonised – unfairly, in their view – and now it looks as if many of the systems and plans they put in place might be scrapped or, at the very least, put into cold storage in the name of political expediency.

What kind of plans?

For a start, Irish Water has a €5.5 billion business plan for the period 2016-2021. It has plans to address leakages, improve drinking water quality and do something to deal with discharges from wastewater treatment plants. If it is suspended, then who will look after all these issues and more in the years ahead?

And the answer?

No idea. Micheál Martin’s unicorn, maybe? When water was the responsibility of local authorities, they were reliant on State investment. That was often found wanting, particularly when times got tough, which meant services were frequently unacceptable to the consumer. If Irish Water can’t borrow money, that reliance will continue. If it stays on the State’s books, the lovely fiscal space we used to hear about will be constricted.

Who will pay for any short-term restructuring of a reimagined Irish Water?

We will.

And how much will that be?

We don’t really know, but emergency interventions are rarely cheap at the best of times and this is hardly the best of times. But maybe two examples could be used to illustrate any potential cost.

Let’s say Irish Water has contracted a particular service to a private company and it needs to discontinue that service. It will have to pay the service provider off. That service provider would then have to let contracted employees go and – if it was unable to pay them – the cost of their statutory redundancy would have to be picked up by the State – or to use another word: you. The poor unfortunate who was laid off would then have to sign on and the State – you again – will have to cover the cost of their dole for as long as it takes them to find another job.

If the powers that be feel the company could benefit from a name change, a rebranding exercise can be incredibly expensive.

Is there not better things to spend our money on?

There absolutely is. There is a long list of them. Fianna Fáil might rue the day it drew the line in the sand with water.

Does the utility have nothing to say, at least publicly?

Of course, it does. Its message remains unchanged. And despite all the clamouring, protests and political manoeuvring and out-manoeuvring, it is pretty simple. It believes everyone should just pay their bill.

It also believes that if it is supported and allowed to go about its business, we will have a better quality water service which costs less money and requires fewer staff to run. It says the corollary is also true: if Irish Water is frozen, then sewage will continue to be pumped into the seas around Ireland, inefficiencies will continue, water will be wasted and we will all end up paying a much higher price than is now the case.

What about the unions?

Most of the staff at the utility are represented by Siptu or Impact. If any redundancies are to come as a result of any suspension then they will have to be involved. And in the current climate, with all the talk of a summer of discontent coming fast down the tracks (Luas or otherwise), the industrial relations atmosphere in the Republic is as bad as it has been for more than a generation, so those talks may not go as well as some people might like.

So if Irish Water is suspended, who wins?

The people? Fianna Fáil? Common sense? Or maybe the right answer is Paul Murphy.