independent

Monday 21 April 2014

'Watergate' scandal without leaked tapes is just a pantomime

Consultancy firms and Phil Hogan lead the cast of villains in this new morality play, writes Colm McCarthy

The first Irish Water meter being installed in Maynooth, Co. Kildare in August, 2013. Photo: Colm Mahady / Fennells.
The first Irish Water meter being installed in Maynooth, Co. Kildare in August, 2013. Photo: Colm Mahady / Fennells.

The quality of the proceedings at the Oireachtas committees on the Irish Water controversy in the early part of last week and their coverage in the print and broadcast media should leave people unhappy.

The deputies and the journalists, with only a few exceptions, have managed to miss all of the important issues. For example, the suggestion that the Minister for the Environment should resign having failed to 'micro-manage' the new water company is, on a moment's solitary reflection, simply ludicrous. Think about it: government ministers are supposed to be personally responsible for the operational management of large commercial state companies!

The week has told us more about the state of the media and about how little can be expected from parliamentary committees than it has revealed about Irish Water.

The majority of politicians currently in opposition and most of the Leinster House reporters have jointly developed an all-purpose, post-crisis script, which they populate from time to time with a transient cast of characters from various corners of the public realm. The script is essentially a morality play but pitched at the level of pantomime rather than Shakespeare. No great demands are made on the audience and there are clearly identified bad guys, the ones wearing the black hats. The heroes are the scriptwriters, who have written enviable parts for themselves.

This week's first set of black hats were the executives of Irish Water, consultancy firms, the officials at the Department of the Environment and their minister, Phil Hogan. All are cast as villains, with Mr Hogan to the fore; all living high on the hog, protecting one another, milking the 'bonus culture' and wasting public money on a prodigious scale.

The country's current woes, including those brought about by certain scriptwriters in a previous incarnation, are the fault of these horrid people at whom the public are invited to hiss periodically.

The heroes are the brave deputies, tribunes of the oppressed people, demanding confessions, their white chargers tethered on Leinster Lawn ready for a quick dash to the nearest TV studio to expand on the afternoon's sound-bites. The fearless reporters get some good lines too.

The cast of villains in this never-ending production altered seamlessly on Thursday, with the guilty-as-charged Irish Water mob replaced in the dock by the Central Remedial Clinic and those serial offenders, the Health Service Executive. The cast of heroes remains as before.

Thursday's villains may prove to be a more plausible choice by central casting and a proper inquiry, preferably by the competent authorities rather than by the obscurity-averse deputies, appears to be warranted. But the guilt or innocence of the chosen targets is not material: this is pure populist political theatre, unconnected to any practical reality. The public spectacle will run and run. Next week's defendants have yet to be identified. If you have any suggestions, contact the nearest TD or journalist.

In the case of Irish Water, the critical issues relate to policy rather than malfeasance and the incapacity of the hero community to get their brains around policy issues has rarely been so vividly illustrated. The establishment of Irish Water and the manner in which it is to be operated and regulated raises serious issues which would provide plentiful material for media and parliamentary scrutiny if anybody could be bothered. The only, and depressing, conclusion from the wasted week in Kildare Street is that the task of creating effective parliamentary oversight in the Irish system of public administration has yet to commence.

Water supply and waste water disposal in Ireland have hitherto been organised through 34 local authorities, some of which are sizeable operations and some of which are cottage industries. It makes sense to re-organise this substantial business and it should have been done a long time ago. The Indignation Derby at the committees during the week, reflected faithfully in print and broadcast coverage, focused on a series of non-issues.

The first was executive remuneration. There is a bonus scheme at Irish Water, contingent on performance, which is capped at an average of €7000 per annum per employee. Not a penny has been paid and it is entirely possible that the lucky recipients of this largesse could be waiting quite a while before their numbers come up.

Meanwhile, there are people walking around the city of Dublin on six-figure pensions, courtesy of the taxpayers, who have never been identified and have yet to answer a single question from a Dail deputy or a journalist.

There was indeed a 'bonus culture' and it inflicted serious damage. It is further evidence of the infantilisation of Irish politics to identify this with sins yet to be committed at Irish Water.

For the record, the pay system at Irish Water is to follow the set-up at its parent, the gas board BGE, where automatic pay increases and increments have been scrapped and replaced with non-automatic and capped bonuses based on performance. The remuneration system in place and in prospect at Irish Water was shown, in the evidence presented last week, to be fully in compliance with all government guidelines. There are people called consultants who play a colourful walk-on part in the Kildare Street pantomime. You are invited to believe that they do no work whatsoever, get paid vast amounts of money and secure their assignments through secret sweetheart deals with public officials.

The impression was deliberately created last week by people fully aware of the reality that these villains were paid €86m for writing reports destined to gather dust.

The firms engaged by Irish Water, as was explained with admirable patience by the company's chief executive, are more accurately described as labour-only sub-contractors, hired to set up systems for the new business.

Whether they have been paid too much or too little is impossible to tell from the outside. Colm Keena, in Friday's Irish Times, was one of the few journalists to attempt an explanation of how the real world works in these matters.

One of the vituperating Dail deputies objected to the choices of consulting firms, mainly household names, on the basis that some of them have screwed up Irish government assignments in the recent past. Indeed they have, without scrutiny from aforementioned deputies.

All of the consultants hired by Irish Water were given their assignments in full compliance with Irish and EU public procurement rules, to whose design the vituperating Dail deputies have made no contribution whatsoever.

Since BGE pitched for the Irish Water responsibility on the basis of keeping costs down, it is of course fair to ask whether the Irish Water executives have been getting all of the cost economies they expected from BGE.

No light was shone on this interesting question last week. Did BGE secure the Irish Water gig on false pretences?

A deal was done last summer below the radar which will see Irish local authorities continue to provide water supply for the next 12 years, courtesy of an unnoticed committee consisting of public officials and trade unions.

A cynical interpretation is that Irish Water will be no more than a branch office of the Revenue Commissioners, collecting a monopoly tax from the public and failing to realise the promised cost economies. Monopolies are either broken up in pursuit of competitive supply or regulated by statute where this is not possible.

Irish Water is to be regulated by the Commission for Energy Regulation, the CER, an organisation whose achievements include notably high Irish electricity prices and regulated companies (the ESB, EirGrid and the gas board BGE) who complain rarely if at all about the ferocity of its regulatory oversight. Will the CER be a pussycat regulator for water charges?

The apparent asset value of the Irish water industry is €11bn, on which a guaranteed rate of return will in due course be granted to Irish Water.

But if the CER adopts the indulgent formula used to date for the state-owned energy monopolies, the public could discover that this number has been magicked upwards to €20bn or more.

There was no discussion of this critical issue, namely the tolerance for cost-plus regulation of state monopolies, at the Kildare Street panto.

The Beach Boys summed it up better than I can:

I've been in this town so long, so long to the city

I'm fit with the stuff, to ride in the rough

And sunny down snuff,

I'm alright by the Heroes and Villains.

Irish Independent

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