independent

Friday 18 April 2014

Council fears huge debt load from creation of Irish Water

IRELAND'S largest local authority has expressed serious concern over the impact the establishment of Irish Water will have on its finances.

And the Irish Independent can reveal that businesses in the capital may be hit with higher domestic water charges as a result of the changeover.

Council bosses fear that the creation of the semi-state quango will leave local authorities saddled with massive debts.

There are major concerns particularly over the pension liabilities of water service employees who are due to move as part of the transfer.

A report by the new Dublin City Council manager, Owen Keegan, predicts that the authority faces “very serious financial and operational risks”.

“The outcome will also fall well short of meeting the legitimate objectives set by the council's executive,” he wrote.

The report, seen by the Irish Independent, details a number of concerns, including:

* Whether the council would have to bear the €330m worth of pensions liabilities relating to water services and waste water services staff.

* The Service Level Agreement (SLA), which the council will be forced to remain in for up to 12 years.

* The transfer of €2bn worth of council assets to Irish Water without compensation.

* The lack of an agreement surrounding the transfer of debts owed to the council.

The pension liabilities relate to Dublin City Council only – meaning the overall total for other local authorities is much higher. Mr Keegan also revealed that as a result of the expected introduction of a “uniform national tariff”, businesses in the capital would face larger bills.

The council “will be unable to compensate businesses for any increase in water charges in the event of the introduction a ‘higher' uniform national water tariff”, he added.

Despite his major concerns, Mr Keegan told politicians that the draft plan “probably represents the best deal that can be negotiated given all the circumstances”.

Irish Water, whose chief executive John Tierney is the former Dublin City manager, is due to open a number of regional offices in the coming months.

In a letter to Mr Keegan, Mr Tierney said he wanted to wait until after the publication of the relevant legislation before dealing with any concerns shared by public representatives.

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