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Wednesday 30 July 2014

No one wants to pay the fees, admits Irish Water boss

Paul Melia and Sarah Stack

Published 17/07/2014|02:30

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Michael McNicholas, group chief executive of Ervia, also said establishing the new water company had been “difficult”
Michael McNicholas, group chief executive of Ervia, also said establishing the new water company had been “difficult”

THE head of Irish Water's parent company has admitted that "no one" wants to pay for water.

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Michael McNicholas, group chief executive of Ervia, also said establishing the new water company had been "difficult" – and although research indicated that people were aware of the need to upgrade the network, they did not want to pay charges.

Ervia, formerly Bord Gais Eireann, is the parent company of Irish Water, which was established last year.

The company sold its energy business for €1.1bn as part of a sale of state assets, and has been rebranded Ervia. Ervia controls two companies – Irish Water, and Gas Networks Ireland, which operates the gas system.

Asked about whether some 1.3 million would pay their water bills after charges were introduced this October, he said it was a "huge" issue of public concern.

"It's difficult, it's hugely an issue of public concern. It's a critical public service and no one in these challenging times wants to pay for water," he said at the launch of the Bord Gais Eireann 2013 annual report.

The first bills will land in people's homes from next January.

Almost one-third of the €1.1bn made on the privatisation of Bord Gais Energy will not be repaid to the State for several years, it has emerged.

The sale of the energy side of the company to a trio of investors closed last month for €16m less than management had valued it at, the company confirmed.

Michael O'Sullivan, group finance director, revealed €150m has been paid to the exchequer, with another €480m to be handed over by the end of the year. The balance of the cash is being used by Bord Gais to repay debts.

The company said that it plans to pay the State a dividend totalling more than €300m in the future as a result of restructuring and debt repayment.

"So in total, as a direct consequence of the sale, we are in a position to return up to a billion in total to the State over the next number of years," Mr O'Sullivan added.

Bord Gais recorded a pre-tax profit of €171m in 2013.

Its balance sheet soared into the red to an after-tax loss of €169m when exception charges were taken into account.

The figure includes an impairment of €224m in its energy business, primarily linked to its Whitegate combined-cycle gas turbine plan in Cork.

Energy generation from coal and renewables resulted in less demand for gas, it said.

Irish Independent

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