Irish Water to run as State-owned Bord Gáis subsidiary

17 Apr 2012

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

United Nations statistics on water and water scarcity. Credit: www.unwater.org

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Environment Minister Phil Hogan has just announced that the new Irish Water utility will be set up as an independent State-owned subsidiary of Bord Gáis.

Irish Water will be established as a wholly owned public water utility and will remain in public ownership.   

Hogan said this afternoon that "the overarching objective" of the Government’s water reform programme is to put in place structures and funding arrangements to make sure Ireland has a water and wastewater infrastructure that meets all environmental and public health standards.

According to the Government, the decision to transfer water services functions from local authorities was based on a comprehensive independent assessment which examined the current system, considered international experience and best practice and took account of stakeholder soundings.  

It said that the reform of the existing model is necessary in order to develop a sustainable funding model to meet the ongoing operational and capital costs. These costs currently add up to about €1.2bn per annum.

The Government said that the reform would also cover water leakages. It said average water leakage levels of more than 40pc in Ireland are well above international standards.

The water reform programme will also look at tackling fragmentation in the existing structures. The Government indicated the aim is to achieve real economies of scale in the delivery and operation of water services.

"We are faced with a substantial investment requirement in future years. The present funding model that is not sustainable, and the current scale of operation is not efficient or effective," said Hogan.

The Government said there will be no up-front charge for the water-metering programme and that the Commission for Energy Regulation will ultimately decide on the funding model.

In the past it has also indicated that the setting up of Irish Water will aim to spawn 2,000 long-term construction jobs by being able to secure additional capital investment in the sector.

When its fully operational, the Government said Irish Water will have the capacity to raise funds on financial markets for capital investment in the same way as other semi-states such as ESB and Bord Gáis.

Other funding will come from income from domestic and non-domestic charges, as well as funding from central Government.

An implementation plan is now being developed by the Department of the Environment, Community and Local Government in alliance with other relevant Government departments, the local authorities and NewERA. The plan will be finalised in the coming weeks with Bord Gáis.

Carmel was a long-time reporter with Siliconrepublic.com

editorial@siliconrepublic.com