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Phil Hogan, TD, Minister for the Environment, Community and
Local Government and Fergus O’Dowd, TD, Minister of State
with responsibility for NewERA have announced a six week public
consultation on a suite of fundamental reforms of the water
sector which the Government are planning to introduce.
Through the water metering programme and a steady level of
capital investment of potentially €600 million per annum,
the water sector will create and sustain 2,000 construction
jobs.
Minister Hogan said - “From tomorrow. members of the public
and key stakeholders will have an opportunity to consider
these reforms and provide their views - which, I am convinced,
will improve the implementation process.”
These reforms include -
- The establishment of a new public utility - Irish Water
- to take over the responsibility for the delivery of water
services from local authorities;
- The introduction of water charges based on metered usage,
with the metering programme to commence later in 2012;
- The introduction of independent economic regulation of
the water sector under the Commission for Energy Regulation.
The Programme for Government committed to the creation of
Irish Water - a State company to take over the water investment
and maintenance programmes of the 34 existing county and city
councils - with the key aim of supervising and accelerating
the significant investments needed to upgrade the State’s
water and sewerage networks. A number of key benefits would
arise from the establishment of Irish Water as a full public
utility -
- Creation of 2,000 long-term construction jobs;
- Specific focus on fixing the current leaks in the system;
- Attracting foreign investment and job creation by funding
the major investments water and sewerage services needed
to support new businesses, industries and jobs;
- It would have responsibility for investment and the delivery
of services;
- Protect the environment and public health;
- Water meters will encourage water conservation;
- Support implementation of River Basin Management Plans.
The local government system has served the country well in
providing necessary water and sewerage infrastructure. However,
the independent assessment highlighted a number of problems
with the current model of water services provision that requires
a fundamental reform on the way the State delivers water services
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- Fragmentation of current structures;
- The inability to achieve real economies of scale in delivery
and operation;
- No independent economic regulation;
- Significant overheads in the management of water services;
- Operational expenditure is very high:
- Full potential for industry standard IT systems for management
of water services is not being exploited;
- Difficultly in development of strategically important
national water services projects, due to funding constraints;
- Unaccounted for water is a very significant problem and
well above international standards;
- Current funding model for water services is unsustainable.
The need for Irish Water to build on the strengths of the
existing system including an experienced and committed workforce
is recognised. Consequently, Irish Water, although a national
company, will have a regional and local focus and a phased
transition is proposed to ensure continuity of service and
the building of a fit for purpose organisation within a reasonable
timescale.
Water services cost over €1.2 billion to run in 2010 - of
which operational costs amounted to some €715 million and
capital costs of over €500 million. The Programme for Government
also provides for the introduction of a fair funding model
to deliver clean and reliable water with the objective of
installing water meters in households and moving to a charging
system that is based on use above a free allowance.
Minister Hogan said - “We are the only country in the OECD
where households do not pay directly for the water they use.
Our current model of water provision, where unlimited quantities
of an expensive product are provided at no charge, is simply
not sustainable. The Government intends to embark on a universal
metering programme with installation of the necessary infrastructure
to commence this year, creating 2,000 jobs each year for the
next three years in the construction industry.
"The aim is to achieve completion of the metering programme
to the highest standards as quickly as possible. Households
who source their water from private supplies will not pay
charges.”
Economic regulation of the water sector will be undertaken
by the Commission for Energy Regulation. Minister O’Dowd said
- “The primary duty of the economic regulator will be to protect
the interests of customers. This will be achieved by having
an appropriate regulatory framework that is clearly enforced
with the aim of ensuring that efficiencies are driven, costs
are reduced and that these benefits are passed on to consumers.
"Cutting costs significantly from their present levels
will be a key objective for the regulator. The Government
will also ensure that policies are in place to address affordability
for those on low incomes or those that have medical conditions
that necessitate a high level of water use.”
Minister Hogan added - “The position paper 'Reform of
the water sector in Ireland' highlights some of the weaknesses
in the current model of water services. Meeting the challenges
of the Water Framework Directive - and requirements for the
treatment of drinking water and waste water - will require
very significant levels of investment and concerted action.
"The high levels of unaccounted for water in some parts
of the country are a serious concern and tackling uneconomic
levels of leakage will be urgently prioritised in the future.
Increased investment in new treatment plants for drinking
water and waste water - together with rising energy costs
and more stringent statutory compliance requirements - will
lead to increased operational costs. It is in this context
that achieving operational efficiencies will be a priority.
“Ireland, which is rich in water resources, can continue
to exploit this natural advantage to attract foreign direct
investment and high end employment and meet the demands of
our existing businesses and communities for high quality water
and security of supply.
“The programme of reforms set out in the paper will ensure
that the appropriate organisation and funding model are in
place to deliver water services to existing and future users,
while also providing the volume and quality of water and waste
water services required to protect public health and support
employment.”
A consultation paper on these issues - and a copy of the
independent assessment which examined the optimal organisational
structure for an Irish water utility - is available on the
Department’s website
Views are being sought by close of business on Friday
24th February 2012.
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