€10bn bill to repair water system, Tierney warns
Published 12/02/2014 | 02:30
HOUSEHOLDERS will be paying for the repair of our creaking water system for the next 20 years.
It will take €10bn and two decades to bring the water network up to standard and guarantee safe drinking water for more than 1.8 million homes and businesses, a Dail committee has been told.
Irish Water will collect around €500m a year from ordinary consumers and another €200m from business. This money will primarily be used for the day-to-day operation of the network.
Billions more will have to be borrowed from international lenders to help fund the repairs.
The charges will come into force from October.
The latest development comes after Irish Water said the existing network is "not fit for purpose", poses serious health, environmental and economic risks and is putting more than one million people at risk of drinking unsafe water due to "chronic under investment".
Irish Water managing director John Tierney has warned there would be no "quick fixes", and that it would take almost 20 years to overhaul the system.
Speaking to the Dail Environment committee, Mr Tierney outlined the scale of the challenge facing the new utility to deliver a world-class system.
He said there was not enough money currently available to operate the network, and a "lack of information" on the state of water assets including ones deemed to be "at risk".
* It will take up to 20 years to reduce leakage rates, currently at 40pc, to international levels.
* It will take up to 15 years to replace lead supply pipes at homes built in the 1930s and 1950s.
* Almost 40pc of sewerage treatment plans are operating beyond their planned capacity, putting water sources at risk.
* More than 25pc of wastewater plants, or 80, are failing to meet effluent standards and Ireland runs the risk of being hit with fines of up to €120m by the EU.
* A lack of standards to operate plants means that quality varies across the country.
"We are critically dependent on some very old and vulnerable assets which have a high risk of failure," Mr Tierney told the committee.
"The Exchequer does not have the funds required to invest and investment is often ad hoc and suboptimal. Local authorities have had to cope in this environment and struggle to keep services going.
"There are no quick fixes, it is going to take time, substantial investment and a long-term systematic and strategic approach. This is the only viable way to resolve this problem for the country."
This is the second appearance this year by Irish Water before the Dail committee.
Last month, the company defended spending more than €80m on outside consultants to build IT systems needed to operate the network, and yesterday's appearance was designed to set out what was required to upgrade the system.
A number of priority projects have been identified including fast-tracking the upgrading of plants in Roscommon where almost 19,000 are forced to boil water to make it safe for drinking.
In addition, a new water supply for Dublin will be delivered in seven instead of the proposed 10 years; the Ringsend wastewater treatment plant will be upgraded and a new drainage scheme for the capital built.
The committee also heard from regulator, the Commission for Energy Regulation (CER), which said it would set out clear standards which Irish Water would have to meet.
Householders in areas with poor water quality would be expected to pay "somewhat less", Paul McGowan said, but details had yet to be worked out.
Customers who could not pay would only experience reduced pressure as a "last resort", he added, with payment plans expected to be put in place to help struggling families.
The CER also spent €234,000 on consultants last year to prepare for regulating the water sector, and expected to spend another €1m in 2014. This was because expert advice was not in place to develop the regulation model.
Irish Water will submit a document on expected costs at the end of this month, which will be used to determine charges for families.
A consultation paper will be published in April, setting out the proposed structure of tariffs and measures to protect customers, with details of proposed charges to follow in June. Documentation supplied by Irish Water will also be published.
Irish Water will cost €795m to operate this year, much of which is made up of delivering water and treating wastewater. Another €310m will be invested in capital projects, of which €240m comes from the Exchequer and €70m from borrowings.
Paul Melia, Environment Correspondent