Business Irish

Friday 29 August 2014

Siemens cheaper water meter offer snubbed by Minister Hogan

Roisin Burke

Published 22/04/2012 | 05:00

  • Share

Environment Minister Phil Hogan snubbed a private-sector offer to finance water meters that could have saved over €350m.

  • Share
  • Go To

German infrastructure and energy giant Siemens offered to foot the €810m-plus cost of installing meters in 1.3 million Irish homes back in 2010, but Mr Hogan didn't pursue the option when he took over at the Department of the Environment.

One of the biggest players in the British water meter market, Siemens proposed funding the fitting of water meters through an investment to be paid back through savings made in the multibillion-euro cost of providing water services once the meters were installed.

Instead the National Pensions Reserve Fund will be raided for €450m to pay some of the bill. The loan from its coffers will have to be paid back with interest at commercial rates, Mr Hogan has admitted, which would be at least €350m. Added to the estimated €810m installation fee, that brings the national water meter fitting bill to well over €1bn.

In 2010, Siemens Ireland boss Werner Kruckow made the offer publicly and sought discussions with then Finance Minister Brian Lenihan to follow up. Mr Kruckow also proposed that the multinational's own bank finance other energy saving measures in government departments and public buildings.

Mr Hogan's predecessor, John Gormley was enthusiastic about the Siemens offer at the time but it wasn't progressed under Mr Hogan's tenure.

Siemens told the Sunday Independent that no formal offer was made by the department following discussions with officials.

Big utility companies have done such deals in other countries, including Britain, where United Utilities and Southern Water have provided homes with free water meters as part of service contracts with local authorities.

Siemens appears to still be looking for a piece of the action, however, stating: "We are closely following the developments in relation to the formation of Irish Water and will respond to the Government in due course through the normal public sector procurement process."

In other words it's likely to seek tenders in the potentially lucrative Irish water service market. In other countries households pay as much as €200 a month for water where services are metered.

Siemens is eager to expand internationally in this field. Its website says it provides metering services to over 14 million British homes and businesses and has 25,000 public and private sector clients.

A new utility company, Irish Water, to be operated by Bord Gais is to install water meters in homes by the end of 2014, starting this October, according to the Department of the Environment.

The Government estimates that the entire cost of the water services investment programme is €1.8bn. The installation cost is to be borne by households, and spread over 20 years.

Asked why it hadn't pursued the Siemens offer the Department of the Environment didn't supply an explanation, but said it had chosen the Irish Water option after 12 months of discussions with stakeholders as "the optimal organisational form for water services delivery in Ireland".

Sunday Indo Business

Read More

Editors Choice

Also in Business