Tuesday 16 October 2018

Irish Water remains on national balance sheet, no change to budget plans - Noonan

Alan kelly
Alan kelly

Peter Flanagan, Ailish O'Hora and John Downing

Irish Water and the costs associated will remain on the national balance sheet following an earlier ruling in Brussels this year.

And the Government budget plans will not change even though the European statistics agency Eurostat has ruled the cost of Irsh water must stay on the Government's balance sheet, Finance Minister Michael Noonan added today.

The ruling has raised fears that future budgets may be more harsh than expect but finance minister Michael Noonan said "nothing will change" as a result of the ruling.

"The Government has planned for Irish Water to stay on the state balance sheet until 2020," he said.

"When we planned Irish Water to be off balance sheet it looked like it would be very significant but that imperative is not the same and we are forecasting a deficit at 2.3pc in 2015," he said.

The pressures to get the cost of Irish Water off the balance sheet are "not there" anymore, Mr Noonan added.

The minister admitted that it would have been good politically if Eurostat had said it could be removed from state accounts but added he was confident Irish Water would prove itself as a semi-state company.

Fianna Fáil has blasted the latest Irish Water debacle as "an unholy mess and an unmitigated disaster."

The party's environment spokesman Barry Cowen said "the government policy is in tatters," adding, "who's taking responsibility for this? Who's going to come out of hiding at answer questions?"

The EU statistics service Eurostat is already treating the Irish Water figures as on-balance sheet and this is reflected in the Spring Statement which was released earlier this year.

Passing a Eurostat Market Competition Test would have cleared Irish Water to borrow without increasing the national debt.

The Government has factored in €600m per year for promised water and sewerage services investment - however the €1.2bn in spending and cuts planned for Budget 2016 will not be affected as it was fully classed as being under the State remit since April.

In line with EU currency membership rules, and in the wake of the 2008 economic collapse, Brussels is to police closely the Government's Budget spending plans.

Refusal is considered a big political blow ahead of the general election, as hopes of rebuilding the image of the embattled public utility would receive another huge setback.

Ireland had made an application to have Irish Water treated under EU State aid rules as operating at arm's length from the Environment Department, as a fully-fledged, semi-State company.

To qualify as a stand-alone entity, more than 50pc of Irish Water revenue has to come from commercial incomes. But Irish Water statistics recently revealed that the payment rate was below this.

In the April Spring Statement, Irish Water and its funding were counted on the State books.

The refusal is a blow to the Taoiseach Enda Kenny and to Environment Minister Alan Kelly, who have fought an increasingly difficult political battle to rehabilitate Irish Water in the public's estimation.

More than 1.35 million households have now registered for Irish Water.

Irish Independent

Editor's Choice

Also in Irish News