Irish Water left with €123m hole in finances - Coveney
Published 19/10/2016 | 02:30
The cost of plugging the financial hole in Irish Water until the end of March is now estimated at €123m, the Cabinet was told.
But even if water charges are re-introduced, this figure will rise significantly.
Housing and Planning Minister Simon Coveney yesterday outlined the shortfall in Irish Water's finances as a result of the controversial decision to suspend charges.
The €110m saved as a result of the abolition of the conservation grant, coupled with €13m from the Local Government Fund, will now be used to make up the shortfall.
The suspension itself is due to run out by April.
By then, a decision will have to be made in relation to whether charges are re-introduced, or else the Government will have to extend the suspension period.
A Government spokesman said the exact shortfall expected beyond April has not yet been established.
But sources say the shortfall will be in the region of €200m by the end of the 2017.
The issue of water charges will be considered by an independent water commission, chaired by Kevin Duffy.
The commission is due to report to a Dáil committee before charges are voted upon by all TDs.
As revealed previously by the Irish Independent in August, Irish Water has warned that it will suffer from shortfalls both next year and in 2018 - even if charges are re-introduced.
The company expects to have to mount a massive public relations campaign if charging comes back into force to 'convince' people of the benefits of paying.
Irish Water plans to spend €5.5bn upgrading the network over the coming years.
The projects being progressed include upgrading water and wastewater treatment plants and sourcing a new drinking water supply for Dublin and the Midlands.
Speaking to reporters on the issue of water yesterday, Social Protection Minister Leo Varadkar said the funding has been set aside until April. "Minister Coveney gave us a detailed briefing on that. The Cabinet agreed we would meet the shortfall.
"That's going to be done a number of ways. Obviously the Water Conservation Grant - the €100 that was paid last year - is not going to be paid this year. That's where most of the shortfall comes from," Mr Varadkar said.
"A small amount comes from the Local Government Fund, funding that wasn't required for a voluntary redundancy programme and another bit from converting a loan to equity.
"Provision is made for the subsidisation of Irish Water up until the end of March but provision isn't made for after the end of March because that's when the suspension is going to end.
"As you know there is a commission on water which will report to the Government and the Oireachtas, and after that the Oireachtas will have to make a decision on what happens.
"In the absence of a decision otherwise the suspension does end. We haven't made provision for the €120m or €130m that would be required to continue the suspension of water charges beyond the end of March."
Meanwhile, Fianna Fáil TDs remain deeply concerned over its own new found policy that charges should be abolished permanently.
Some TDs believe the policy may need to reviewed and say party leader Micheál Martin went too far when suggesting that charges will not return.
Within Fianna Fáil, there is the view that the next general election will be fought over the water charges issue.