WATER CHARGES will be one of the big political issues in the new year – and Minister for the Environment Phil Hogan is set to put them high on the agenda.
Introduction of the charges is required under the memorandum of understanding with the EU and International Monetary Fund, and is a firm commitment in the programme for government. Most houses are to be metered by 2014, and the programme is to be completed by 2015.
How much will consumers be charged? Estimates vary from €250-€400 and even as high as €1,000 per annum, but the department dismisses all these figures as “total speculation”.
There will be an allowance for usage of a quantity of water below which householders will not have to pay charges. The quantity has not been decided, but the principle is established in Hogan’s mind. The rationale is that, if people are paying a flat rate regardless of consumption levels, they will be much more profligate in their water usage.
The intention is to proceed with installation of water meters in every household. This may not be possible at some homes such as apartments or older houses, and in these cases a flat charge based on average usage in similar dwellings will apply.
It is now three weeks since the Cabinet decided to set up a water utility. Their decision was based on a PricewaterhouseCoopers (PwC) report to the Department of Environment, Community and Local Government.
The report’s conclusion is that the current local authority-based model for water supplies is inefficient, and that a single entity would be less costly.
An internal department summary states: “Following a detailed analysis of possible options (including consideration of a range of models in place in other jurisdictions), the report recommends the establishment of a public water utility with all water functions and assets to be assigned to it.”
The process would be carried out over years, on a phased basis. The current model for water services is deemed unsuitable because of the “fragmented leadership” and “duplication of management” involved.
There is an “absence of consumer protection” and a “significant overhead in the management of water services”, given the number of local authorities and the small scale of operations in many of them.
Operational expenditure is “very high” compared with Britain. In our set-up, involving 34 local authorities, “overall staffing levels appear high”.
It is not surprising in this context that some of the raw material goes missing or drains away: “Unaccounted for water is a very significant problem and well above international standards.” The current funding model is “unsustainable” and lacking in transparency. Also, the current collection rates for non-domestic water charges are “very poor”, at an average of 52 per cent.
The Minister compared the scale of the project with the establishment of the Electricity Supply Board in former times.
