Commitment to keep water services in public ownership welcome

19 November 2014

Statement by Joe Costello

There is no doubt that mistakes were made in establishing Irish Water and that many people have real concerns about its operation. It is important and right that these concerns were listened to and addressed. The opposition complained that the public were not being listened to and now they complain that the public are being listened to. We know that no matter what was announced today that there is a fringe element that will never be satisfied. They are only interested in protesting - peaceful or violent is all the same to them. Achieving a solution is an anathema to them.

I hope that most people will carefully examine today’s measures and decide for themselves whether these changes are reasonable. No one likes to pay extra charges, but the new measures will, I believe, help to ensure that the charges are as fair and as affordable as possible.

The new measures will greatly simplify how bills will be calculated and will bring clarity so that people can be sure how much they will be paying. There will be only be two capped charges - with the Water Conservation Grant, single adult households will pay a maximum of €60 per year and multi-adult households will pay a maximum of €160 per year. These capped charges will remain in place until 2019. There will also continue to be a free allowance of 21,000 litres for each child in the house. Today’s proposals will also mean that a water meter can only reduce the bill for water.

Water services are clearly a natural monopoly and of great strategic importance; therefore it must, as the Government has always indicated, remain in public ownership. The legislation establishing Irish Water always prohibited its privatisation. The Water Services (No. 2) Act 2013 prohibits the shareholders of Irish Water - the Minister for the Environment, Community and Local Government, and the Minister for Finance, and the board of Irish Water - from disposing of their shares. However, there remained concerns that, at some future date, by some future Government, there was a possibility that it would be privatised. Therefore, I welcome the decision announced today that the prohibition on the privatisation of Irish Water will be strengthened. When new legislation is introduced early next year, water services in Ireland can only ever be privatised if the Irish people agree to it in a referendum. It would be a reckless Government that would seek to repeal that legislation. This I believe has the same effect as holding a referendum without the unintended consequences that holding a referendum often have in Ireland and without the substantial cost.

The previous organisation of water services in Ireland did not make use of the natural monopoly that exists, and the 34 separate authorities that operated water services were unable to exploit the economies of scale that are available. It makes no sense to continue operating water services at the county level. Water does not respect county lines. In time, the creation of a unified public utility should result in significant efficiencies. For example, the creation of Scottish Water as a unified public utility resulted in efficiencies that resulted in an almost 40% reduction in operating costs in Scotland.

The opposition is devoid of ideas of how water services should be funded or operated. Their only idea is to continue with the system that has failed us for many years and left us with crumbling water infrastructures and, in too many areas, water supply that does not meet the most basic standards. The establishment of Irish Water will allow the funding required to improve our water infrastructure to be raised off the Government’s balance sheet. This means that the investment so desperately needed will not compete with other pressing demands such as the health or education budget.

Irish Water will continue to have an important role in water conservation. Water conservation enhances our environment, protects drinking water resources, and saves money. While no one wants to see extra costs being imposed on households, the introduction of water charges will result in improved water conservation. If households reduce their water use by 10 to 15 percent, it is estimated half of these household will lower their water bill.

I welcome that there will be a range of easy ways to pay the bills. These payment methods will include direct debits, Electronic Funds Transfer, payment by cash at any retail outlet with a paypoint or payzone sign or at a Post Office, with a minimum payment of as little as €5. The provision to pay bills at the local Post Office will help support the Post Office network, and we are all aware how important Post Offices are to communities across Ireland.

One of the concerns that had been raised by a number of people was the high costs for families were adult children remained in the family home. These children in many cases would be students and have no or very little income. These new proposals address this concern.

Another common concern has been the mandatory provision of PPS numbers to Irish Water. The new provisions mean that this will no longer be required. Moreover, Irish Water will delete any PPS data already collected during the customer registration process.

Water supply and wastewater treatment in Ireland will be transformed in the years ahead. Unfortunately, previous governments underinvested in our water infrastructure. It is now essential that we deliver the level infrastructure we need to meet demographic, economic and environmental requirements in the future. The development of a unified, publicly-owned water utility in the shape of Irish Water will help secure our long-term economic development and enhance water conservation.

There is need to provide a grant-aided scheme to encourage people to harvest rainwater. The cost of a rainwater barrel, the piping and pumping of the water through the house for nondrinking purposes should be subsidised. Such harvesting of rainwater would greatly reduce the consumption of treated water, thus reducing the cost to Irish Water and, more importantly, to the Irish citizen.