Kenny says current water supply system 'cannot go on'
Taoiseach Enda Kenny appears to have not ruled out cutting off water supplies to households refusing to pay the proposed new charges.
Amid continued speculation that households face an €800 bill for new meters, Mr Kenny declined to give details of potential costs when the new charge is introduced in 2014.
During leader's questions on the Dáil's first day back since the Easter break, Mr Kenny said water was fundamental for life but the Government is not in a financial position to give people a free allowance.
“In respect of people being cut off…these are all matters for discussion about how the system is actually going to work,’’ he told the Dáil today. “If you don’t pay your electricity bill, if you don’t pay your telephone bill, it is cut off.’’
He also said the current water infrastucture needs to be upgraded.
"Clearly, the system here is for everybody to understand that we cannot go on the way we have been going on,’’ he added. “We cannot continue to have 40 per cent of water leaking through systems.’’
The Taoiseach was replying to Sinn Féin deputy leader Mary Lou McDonald, who sought an assurance that he would not “countenance in any circumstances cutting off water supply to homes across this State’’. She said it was a disgrace that Mr Kenny would not rule out the prospect of cutting people off.
Mr Kenny replied: “Don’t say in this House that I said that people would have their water cut off. There will be no bills of any description in respect of water for two years.’’
Mr Kenny said no Vat would be added to the water charges.
He said he had read in today’s newspapers that the cost of the installation of meters could be €30 to €300. “That is all a matter for discussion and a matter for determination by Bord Gáis, when they set up Irish Water, together with the regulator,’’ he added.
Speaking later at an event in Dublin this afternoon, the Taoiseach said the Government wanted to “introduce a regime where prudence and good care and consideration are rewarded”.
He said the Government has yet to decide how much water will be allocated to each household for free. “It’s very important that people understand that good and careful and prudent use of water like that should not result in anybody having to get into difficulty. In other words, if this is handled properly and with proper consideration and care then that shouldn’t happen.”
Fianna Fáil leader Micheál Martin said the country was faced with a “water-metering debacle’’, adding that there was no clear and detailed plan on how the new system would work.
Mr Martin criticised what he said was the Taoiseach’s inability to "give any detail or properly answer questions" about proposals for introducing water charging and dismantling the current water service system.
“Since the Taoiseach and Minister Hogan couldn’t wait for the Oireachtas Committee to complete its report before handing over the multi million euro contract for water and wastewater services to Bord Gáis, we would have been forgiven for thinking that the Taoiseach understood the details of his plan.
“However, the Taoiseach’s inability to answer the questions I put to him this morning demonstrated that the announcement about Bord Gáis has more to do with an attempt to redirect embarrassing questions away from Government than it has to do with creating a better system for citizens," he said.
Minister of State for Natural Resources Fergus O'Dowd said this morning people could control their bills for water usage by using less of it. "There were will be a standing charge of €40 every year, then a free allowance, and after that people will be in control of the water they use. The less water you use, the cheaper it will be for you," he told RTÉ radio.
He said the country's water infrastructure needed to be improved and that the Government hoped to raise €1.2 billion through the charges.
Minister for European Affairs Lucinda Creighton said the plan to charge for water had to be judged against the context that the State was “effectively" bankrupt. “I know that householders are under pressure but so is the Government and we have to deliver a system of water that is fit for purpose,” she said. “We can pretend we have money that we don’t have but it’s a very difficult time in our history.”
Ms Creighton said she knew from her time as a councillor that some 60 per cent of the water being carried was leaking out of pipes in the Dublin City Council area. “It has to be revamped and renewed and this is the only way it can be done - people will have to pay for water. It’s not an infinite resource and it’s one that has been squandered to a large extent in this country and we have to put in place the sort of infrastructure that is required,” she said.
“Unfortunately citizens will have to pay for it. It’s unpleasant but that’s the reality. Every other member state in the European Union has a water meter system and we really are just catching up with the rest.”
The setting up of the new State water utility was announced by the Government after yesterday’s Cabinet meeting. Minister for the Environment Phil Hogan described it as the most significant decision taken in relation to a State utility since the establishment of the ESB.
The Government also announced the contract to run the company has been awarded to Bord Gáis Éireann, of which Irish Water will become a subsidiary. It won the contract ahead of Bord na Móna, the other State agency which submitted a tender.
Mr Hogan confirmed the National Pension Reserve Fund would supply a loan of €450 million to establish Irish Water and supply an estimated one million homes with water meters. He said the funding would be provided at commercial interest rates, but the department last night would not give any details of the interest rate on grounds of commercial sensitivity.
The Minister said the annual repayment for householders would work out at about €39 or €40 per year over 20 years. On that basis, the interest payable on the loan will total €350 million, or €340 for each home over that period. According to a source, the interest on the bond-type loan from the National Pension Reserve Fund could be as high as 6 per cent.
Irish Water will gradually become responsible for supplying all public water in the State, taking over the role currently performed by the 34 local authorities.