Sunday 22 October 2017

Irish Water staff share €3m bonus despite 'overly high costs' at utility

Other perks include fitness lessons at in-house gym, car allowances and health cover

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Mark O'Regan

Mark O'Regan

Bonus payments, gold-plated family health insurance packages, car allowances and specially funded fitness instructors are some of the perks enjoyed by Irish Water staff.

The Sunday Independent can today reveal that all 675 employees at the under-fire utility were paid bonuses last month, totalling €3.2m.

Staff received between 2.75pc and 19pc of their basic salary. The average payment under the scheme to each employee was €4,799.

Despite the allocation of the pay bonus to the entire staff, the company insisted the award was allowable only for people who achieved "predetermined" company targets.

It said the payment was part of an agreed remuneration structure.

The revelation came as the prospect of a general election edges closer. The bitter row between Fine Gael and Fianna Fail over the funding of water services is threatening the stability of the minority-led Government.

Staff have also received a 2.2pc pay increase, backdated to January, 2016, following a recent Labour Court recommendation. The pay increases will cost the company €1.2m per annum. In a statement, Irish Water confirmed the recommendation was accepted by the company and the groups of unions and has been implemented.

"Irish Water staff are not entitled to salary increments for 2017," it added.

Meanwhile, it has also emerged that top-of-the-range private health insurance cover is being provided to all senior managers and family members at the utility.

New figures reveal that €58,695 was spent on health insurance for 11 senior executives in 2016. This means that, on average, €5,335 was ring-fenced to provide the VHI HealthPlus Choice Plan for each executive. An Irish Water spokesperson confirmed the package covered family members, such as a spouse or partner.

Meanwhile, it has also emerged that €22,328 has been spent on providing specialist fitness lessons for staff who avail of Irish Water's in-house gym. This figure - which covers spending under this heading over the past three years - is used to pay qualified fitness instructors to provide an hour-long "induction class" for employees. The lessons aim to provide office workers with "instructions" on the "correct use" of a range of keep-fit equipment.

As part of the package, staff are also given general fitness and training advice.

The company said the classes are mandatory in order to comply with "health and safety regulations".

Employees pay a cut-price rate of just €20 to join the gym, which has ­state-of-the-art equipment that cost €44,500.

This fee goes towards the maintenance of the facility, which includes two Technogym Run Now treadmills, priced at €12,879, and a Vectra Multigym, worth €8,000.

Meanwhile, a new company car, worth €41,998, was purchased last year for the company's managing director, and eight members of the senior management team also receive an annual car allowance of €10,500. Overall, 32 staff members earn more than €100,000. In a statement, the company insisted its bonus-linked pay structure is designed to reward "individual performance" - rather than the traditional public service increment-based model that rewards length of service.

It added that no performance-related awards were paid to staff in the period between 2014 and 2016. It said bonuses have now been paid as a result of "individual, team and company targets" being met for work carried out last year. Irish Water also stressed that this performance-related award was "directly linked to rigorously assessed ­performance" against particular targets.

Payment is dependent on an assessment of "each ­individual's performance against their own goals, and achievement of predetermined company performance targets". A new pay structure agreed and implemented in Ervia, the parent company of Irish Water, in 2013 involved moving from a traditional increment-based pay model that rewarded length of service, to a model that rewarded performance.

It said the Workplace Relations Commission in 2015 recommended such payments be restored this year. It added that the payments are fully taxable, non-pensionable, and its remuneration model will save €22m in payroll spending over the next five years.

In January, the Commission for Energy Regulation, which oversees Irish Water, said overall costs at the utility remained excessively high.

Following the suspension of water charges last year, the Government is compensating for this loss of revenue by allocating funds from central taxation to the company.

This will pay for a major capital investment programme up to 2021. Overall, the modernisation of our water system will cost billions over the next five years, according to expert analysis. Irish Water was projected to collect around €275m this year and next in domestic charges.

The scrapping of charges will mean the shortfall must be met from general taxation.

The €275m figure equates to almost €60 being taken from every man, woman and child in the country to replace the unpopular charge. The State already pays around €500m a year to Irish Water to fund day-to-day ­operations.

Meanwhile, figures also show €382,110 has been spent on engineering and environmental services, linked to controversial proposals by Irish Water to build a 170km pipeline from Shannon, Co Clare, to Dublin. There are about 500 landowners along the route, which will pass through Clare, Offaly, and Kildare, before ending in Peamount, west Dublin.

Both construction and operational costs are expected to top €1.2bn. Roughly 85pc of the pipeline runs through agricultural land. The company has insisted this scheme is necessary to service the greater Dublin population, which will rise from 1.5 million, to around 2.1 million by 2050.

Irish Water has received 524 submissions on the plan following consultations with relevant stakeholders. The utility needs funding of €8bn ­between 2017 and 2021, made up of €3.9bn to complete the €5.5bn capital investment programme, and the remainder to fund operating costs.

Sunday Independent

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