Wednesday 26 October 2016

Irish Water is left €200m short after bills put on hold

Published 18/10/2016 | 02:30

Simon Coveney will address Cabinet on funding shortfall
Simon Coveney will address Cabinet on funding shortfall

Ministers will today be warned of a €200m revenue shortfall at Irish Water as a result of the controversial decision to suspend charges.

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Housing and Planning Minister Simon Coveney will also argue that if charges remain suspended in 2017, other means of funding the utility will have to be found.

In a memo being brought to Cabinet, Mr Coveney will outline a number of ways in which the revenue shortfall can be addressed.

One of these is providing funding to Irish Water from the local government fund.

The State would also save €110m through the suspension of the conservation grant. The Government suspended charges for nine months from July 1 last until March 31 next year to allow an expert commission to examine the long-term funding requirements needed to operate, maintain and upgrade the network.

Once the commission completes its work, a series of recommendations will be sent to an Oireachtas Committee.

TDs will then decide whether charges are re-introduced.

As revealed 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.

In a statement, Irish Water said the State remained committed to the company's business plan, but refused to comment on the financial projections.

Politically, water charges remain a thorny issue.

Fine Gael ministers believe charges should come back in order to fund water infrastructure and ensure Ireland meets its EU requirements.

But much will hinge on the position of Fianna Fáil.

The party's position before the election was that charges should be scrapped until the infrastructure is brought up to date.

Many Fianna Fáil TDs were therefore surprised after their leader Micheál Martin hardened the party's position.

Fianna Fáil now wants charges to dropped in their entirety and has not said clearly whether they would eventually be re-introduced.

The party has also signalled its intention to introduce a tax credit for the hundreds of thousands of households that have paid their bills.

But neither Fianna Fáil nor Fine Gael referred to the issue in the context of the Budget.

Irish Independent

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