Realpolitik means it's back to drawing board on water
Published 02/04/2015 | 02:30
A year ago, I asked a retired public servant and former CEO of a large energy utility PLC for his opinion on Irish Water (IW).
"It makes no sense, it'd be better to leave revenue collection and water services with local authorities, while introducing charges." I was taken aback. I assumed the commercial rationale of a single, unified, commercial, state company would have benefits of scale, synergy and efficiency. I fear my initial reasoning (and the Government's) is flawed and unsustainable.
The provision of adequate water and nationwide waste treatment is the greatest infrastructural challenge the country faces. €17.5bn is required over 25 years to provide quality drinking water for our growing population, which by 2021 means an extra 90,000 new houses; 23,000 households currently endure 'boiled water notices'. The EPA reckons 940,000 are at risk of contaminated water supply. Lead pipes and leaks are endemic. The Eastern/Midlands region requires a 50pc increase in capacity over 35 years. Previous water outages in Dublin cost the economy €78m per day. Rhetorical notions of free water are absurd in the context the of unavoidable future costs. The challenges posed by our water/effluent are greater than infrastructural provision of a national primary road network or broadband roll-out.
The continued reliance on the Department of Environment and annual Public Capital Programme to meet this challenge is a non-runner and a proven failure. Selection of sanitary service/water extraction programmes is highly politicised. A Cabinet minister in your constituency means political priority trumps independent assessment or the need for a return on investment.
The Coalition takes growing satisfaction from improved poll ratings as our economy recovers. They might do well to remember that the lowest point of unpopularity occurred last December, which coincided with the hottest national protest against water charges. Minister Alan Kelly's ameliorations around affordability, flat rate until 2019 and a €100 subsidy took some heat out of the popular revolt. The abuse by protesters of staff fitting water meters, and their disrespect for ministers and the president was counter productive - alienating middle-ground objectors.
The row undoubtedly will flare up again with the dispatch of 1.7 million bills this week, with farcical new features emerging: 250,000 homes with private water supply and septic tanks are to receive bills of €260 when they actually owe nothing. You see, Irish Water issues bills just in case you might owe them; no credible business behaves like this, knowingly serving invalid invoices. It's ridiculous that these households will receive €100 water conservation grants. They don't need them. It's a waste of €25m, plus €5m administration costs. Such money would be far better used towards another 2.5 hours of resource teaching per week for Down Syndrome children.
The tipping point for Irish Water remains the next general election, not notional registration compliance levels. The reality is every opposition party (FF, SF and Independents) has committed to waiving charges if in government. It's a deal-breaker in future coalition talks. As Government candidates discovered with the discretionary medical cards removal last April/May on national doorsteps; so water bills, like HSE letters, will also be brandished in faces. Systemic district court income attachment orders will be disastrous when ballot boxes open. Having eased up the political pain on one front in the water war, this litigation will be subject to multiple legal challenges and extra bureaucratic costs, opening up another one. Perfect timing to procure a referendum on water coinciding with a March 2016 poll, set to cripple Labour, especially considering previous promises to abolish water charges. Irish Waters's best innovation is the Strategic National Plan for Water Services in Ireland, setting out investment of €5.5bn by 2021 and a further €600m annually.
The National Roads Authority is the most suitable revised model for Irish Water, retaining overarching leadership, and strategic blueprint roles. Irish Water's construct of a billing system from scratch doesn't work. Relying on An Post's address system is woefully inadequate: it fails to distinguish between occupiers, owners and tenants; it doesn't cope with the complexities of commercial and household actualities.
Take my example in Enniscorthy. I've paid a water charge since the early 1980s, via a single meter for a household/farm supply, with an annual bill of several hundred euros. Months ago, I wrote to Irish Water's explaining this liability involved two separate residences; two further commercial tenants, one agricultural, other commercial. I sought four separate meters, so accurate bills could be apportioned to each, crediting the new allowances. Reply? None. Wexford County Council informally says no new sub-supply meters will be fitted until all households have meters.
Irish Water is a monstrous Tower of Babel. Thirty four local councils are better placed to administer/collect revenue for Irish Water. They have in-house data from registers of electors, itemising and validating adult members of every house. They can pinpoint, through the planning system, additional new houses and multi-residential buildings. They had systems of water rate collection for all commercial outlets and records of local authority houses.
It's time to go back to the drawing board. The optimal solution is to utilise Irish Water as an NRA equivalent; setting out targets, designing and overseeing delivery of projects; while local authorities deal with all revenue collection systems.
Kenny and Kelly have vested all their credibility in a top-heavy, platinum-plated quango, happily wasting another €650,000 on advertising campaigns that won't change anyone's mind about Irish Water. The political exit to extricate ministers could be Eurostat. They know the Government's revised charges plan won't raise 51pc revenue relative to the projected expenditure model. Exchequer finance underlies Irish Water's economics and balance sheet; without it they're already insolvent. The NTMA accesses cheaper cash anyway.
The EU can do the Government a favour; get them off a flight plan towards an electoral crash. Irish Water can't deliver acceptable, accurate, conservation-based billing and metering systems - maybe ever - but certainly not before polling day.
Ergo: Kenny and Co are impaled on a lethal hook that happens to be the single issue they could lose power on. Time to think again.