Upgrade of water network and treatment plants to cost €1.8bn
IRISH Water plans to invest almost €1.8bn upgrading the water network over the next three years, which includes building new plants and removing boil water notices for some 26,500 residents.
But almost €200m of the spending will be incurred in settling commercial disputes between local authorities and private contractors, and carrying out urgent repair works not completed by city and county councils due to a lack of funds.
The company's proposed Capital Investment Plan 2014-2016, to be published today, sets out details of 386 individual projects across the country which will deliver improvements to drinking water quality, reduce leakage rates and treat wastewater.
Environment Minister Phil Hogan said the investment would sustain 15,000 jobs during its three-year term and help to provide water services on lands which could be used for commercial or residential use.
Some €1.2bn is initially earmarked for the investment programme. The bulk of this, €920m, will be provided by the government. Another €210m will be raised by Irish Water from international lenders, and €70m of spending will be made through efficiencies.
The company plans to raise another €570m before 2016 to finance the remainder of the works. Projects already under construction will be completed, Head of Asset Management Jerry Grant said, but others have been re-designed to ensure better value for money.
These include a planned upgrade of the Ringsend wastewater treatment plant which would cost €340m, and include a 9km tunnel out into the Irish Sea, a spend Irish Water said it could not justify.
"We decided we would exploit existing assets to the maximum," Mr Grant told the Irish Independent. "When we looked at Ringsend, we saw a super scheme for Dublin city but the problem was when we looked at the costings. We would need to factor about €340m for the scheme.
"You would be committed to €340m when there wouldn't be an enormous dividend because the water quality in Dublin Bay is so good, and tunneling is a major risk.
"With finances tight, we would be looking at an expensive high-risk scheme and using emerging technologies we could achieve the same result at a cost of €170m."
The bulk of the spend, almost €746m, will be upgrading and building new wastewater treatment plants.
These include 66 schemes where the EU has warned Ireland that it is not complying with water quality rules, and faces fines.
Irish Water said that as much as €7bn was needed to bring infrastructure in line with the EU Urban Wastewater Treatment Directive.
In addition, some €100m has been set aside to complete urgent repair works not completed due to a lack of funding available to local authorities.
Another €95m has been set aside to settle commercial disputes between councils and contractors which completed works.
"We inherited a live capital programme and there's a significant number of contracts, over 100, with balances due or claimed by contractors, some of which are in dispute," Mr Grant said. The overall spend is among the highest in recent years, but Irish Water has previously said that as much as €600m must be invested out to 2025 to deliver a world-class system.
Among the key priorities is addressing leakage rates, where 40pc of all treated water is lost. Some €51m is set aside to fix household leaks between the meter and front door under the so-called 'first fix free' policy.
Irish Water said that while local authorities were "clear" about the priorities in their areas, it was looking at national requirements.
"At the moment we have 59,000km of mains, 2,000 treatment plants and 10,000 sites above ground. We have about 600 projects in the minor capital programme which will extend the lifetime of the asset and allow us to defer bigger schemes," he said.
"No scheme has been cancelled, but some schemes in planning will be re-evaluated."