Business Latest News

Saturday 30 August 2014

Families to face bills of €370 a year for water

Paul Melia

Published 10/01/2013 | 05:00

  • Share
Picture posed. Thinkstock

FAMILIES can expect to be hit with water bills averaging €370 a year when charging is introduced next year.

  • Share
  • Go To

The Government plans to raise €500m by charging for domestic water, which will hit 1.35 million homeowners with hefty bills.

Details of the expected charge are revealed for the first time in official IMF documents.

They say the Coalition has told the European Commission that it expects to collect €500m in 2015 after metered water charges are introduced.

This will result in average monthly bills of more than €30 per household -- totalling €370 a year.

FINAL DECISION

But it is not yet clear when homeowners can expect to receive their first bill, as a final decision has yet to be taken.

In a statement to the Irish Independent, the IMF said it expected charges to be introduced by the end of the bailout programme this year.

"The latest memorandum of understanding envisages the introduction of water metering, with a view to start charging by the end of the EU/IMF programme," it said.

"Although the exact amount of budgetary savings will depend on the parameters of the charging regime -- for example the free water allowance provided to users -- the working estimate of the potential annual savings that could arise is €500m."

The EU/IMF agreement says charging must begin from 2014 but the Government may decide to delay the inevitable until after the local elections that year. This is because there are concerns that homeowners – hit with a full year of the property tax that was introduced last month, plus water charges – will then vote against the coalition government parties of Fine Gael and Labour in the June 2014 elections.

Informed sources said the ending of the bailout programme at the end of this year could give the Government room to delay the introduction of charges.

"Supposing the IMF is gone, that can change a lot," said one. "If they're not making you implement it, it could be (delayed until) after the summer."

Ireland is one of the few countries in the OECD not to charge for water usage, with average bills among member states ranging from €100 to €450 a year. In the UK, bills are about €400 per household.

The Government intends to give each household a 'free' annual allowance of water, which would cover basic needs such as sanitation, after which charges will apply.

The company charged with collecting water bills, Irish Water, expects 90pc of domestic customers to pay up.

However, meters which measure the amount of water used will not be installed in all homes across the State for another three years, meaning that some homeowners will have to pay a flat-rate 'assessed' charge based on average usage.

The metering programme, which is expected to cost €500m, is not due to be completed before summer 2016, with work on installing meters set to begin next summer. Some 300,000 households with a private water supply will not be billed.

Two government departments – Finance and Environment – could not say how the figure of €500m had been arrived at.

Meters

"This department is not in a position to comment on what is essentially a budgetary matter," a spokesman for the Department of the Environment said, adding: "The departments of Finance and Public Expenditure and Reform would be more aware of discussions that have taken place with the IMF and the other programme partners about national budgetary projections."

The Department of Finance said it could not comment.

The charges will be set by an independent regulator, the Commission for Energy Regulation (CER), which will decide how much free water will be given to households before charges take affect.

It currently costs some €1.2bn a year to supply water to homes and businesses across the State.

It costs €500m to maintain and upgrade the network and businesses pay another €200m in charges.

The shortfall will be made up of charges from domestic customers, which will be used to cover operational costs. Households that refuse to pay are unlikely to be cut off, but they will face the prospect of having the unpaid bill registered as a charge against their property or experience a loss of water pressure, meaning that washing machines and dishwashers cannot be used.

Irish Water will write to 1.35 million households from next summer to ask for confirmation of their address so they can be billed.

Irish Independent

Read More

Editors Choice

Also in Business