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Friday 29 August 2014

Coalition went 60pc over budget in planning Irish Water

Paul Melia and Niall O'Connor

Published 22/01/2014 | 02:30

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John Tierney, MD Irish Water, and Environment Minister Phil Hogan
John Tierney, MD Irish Water, and Environment Minister Phil Hogan

THE controversy surrounding spending at Irish Water deepened after it emerged that the Government went over budget by almost 60pc with a €16m spend on planning the new semi-state body.

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The figure was spent on consultants, engineering and additional staff by the Department of the Environment last year - despite just €10m being budgeted.

The spend by the department is separate to the staggering €180m spent on the utility's operational costs, €50m of which was already paid out on consultants.

Environment Minister Phil Hogan faced criticism at the Oireachtas Environment Committee after confirming that his own department went over budget by almost 60pc in relation to the semi-state body.

REPORT

He confirmed that almost €180,000 was spent commissioning a report by Price Waterhouse Coopers (PwC) and more than €353,000 was spent on mapping services.

The Government has been strongly criticised for the cost of setting up Irish Water, months before water meters are even in operation.

Irish Water chief John Tierney caused shock last week after he admitted that the overall consultancy bill is set to reach €85m.

But Taoiseach Enda Kenny and Environment Minister Phil Hogan yesterday defended Mr Tierney and the level of spending at Irish Water.

"We can't have a situation where thousands have to boil water every day. We can't have a situation where 40pc of what we produce and you pay for is leaking into the ground," said Mr Kenny.

It also emerged last week that a €500m commercial loan from the National Pensions Reserve Fund was provided to Irish Water to cover metering and the overall set-up costs.

Mr Hogan confirmed that the decision to grant the loan was made by the powerful Economic Management Committee (EMC) and did not receive full Cabinet approval.

The EMC, which has been dubbed a 'cabal' by some TDs, is made up of Taoiseach Enda Kenny, Tanaiste Eamon Gilmore, Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin.

Mr Hogan secured permission from the EMC without the knowledge of the wider Cabinet - but insisted this is not out of the ordinary.

He also admitted last night that mistakes were made by his department. Correspondence from the department Secretary General Geraldine Tallon reveals that questions on the overall cost submitted by two TDs were not passed on to Irish Water.

During a sitting of the Oireachtas Environment Committee, Mr Hogan insisted his department was not attempting to withhold information and that the "maximum" amount of information would be provided in future.

'SENSITIVITIES'

"I hid nothing," he told TDs. "The parliamentary question issue was a mistake made. Commercial sensitivities can be taken into account, but I have ordered Irish Water and my department that the maximum possible information will be given to deputies and senators."

Mr Hogan also said that the water network required investment of €600m a year to bring it up to EU standards, and that one million were at risk because they drew their water from risky supplies.

Projects costing €500m were "on hold" because there was no money available to fund them, he added.

But despite the pressure on the system, there was an underspend on investment projects last year.

Irish Independent

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