Kenny challenges Dublin City Council claim of €2bn loss

Taoiseach Enda Kenny has challenged the claim that Dublin City Council will lose some €2 billion in assets following the transfer of its services to Irish Water next month.

The claim was made to Dublin councillors last night by city manager Owen Keegan, who also said the council faced pension liabilities for water services staff of €330 million without the assets to fund them.

Mr Kenny said in the Dáil today the €2 billion estimate was an "unbalanced presentation of the position", adding the legislation provided for the transfer of water services assets to Irish Water and all of the liabilities associated with them, including loans.

On the pension issue, Mr Kenny said local authorities operated a public sector defined benefit pay-as-you-go scheme. Therefore, payments were made from current expenditure when people retired. “So you would have that liability if everybody retired in the morning,’’ he added.

Mr Kenny said there was a major pension problem in respect of the entire public service, which made the city council figure seem relatively modest.

He said the service legal agreement (SLA) provided that Irish Water pay local authorities for existing water services pensioners. When an SLA came to an end and water services staff did not transfer to Irish Water, then the pension liability would rest with the local authority.

The Taoiseach said there was a situation in Dublin city where very substantial amounts of water had leaked through the system, paid for by the taxpayers, for far too long.

He was replying to Sinn Féin deputy leader Mary Lou McDonald, who said it was the normal practice that when a public function was transferred from one authority to another, responsibility for legacy pensions was also moved.

“In this situation, we are witnessing the transfer of major assets, built up over many years by the businesses and people of this city, with no compensation whatsoever for the city council,’’ she added.

Ms McDonald said the Government should withdraw the Bill settinng up Irish Water, step back and review the “utterly reckless water services strategy being pursued by Minister [for the Environment] Phil Hogan’’.