Friday 26 April 2019

Water bills on hold for months at €20m cost to State

Suspending water charges will cost the State some €20m, the price of building around 80 local-authority houses. (stock photo)
Suspending water charges will cost the State some €20m, the price of building around 80 local-authority houses. (stock photo)
Paul Melia

Paul Melia

Suspending water charges will cost the State some €20m, the price of building around 80 local-authority houses.

Fianna Fáil's demand that charges be suspended pending an investigation into securing an appropriate long-term funding model to upgrade the network is "unlikely" to exceed €20m, new documents show.

The Water Services (Amendment) Bill 2016, which was published yesterday, suspends the imposition of household charges for at least nine months.

The suspension comes into force from July 1 until next March, but applies from April 1 last. This means that Irish Water domestic customers will only receive a bill for the first three months of 2016.

Earlier this week, it emerged that the Government had sought expressions of interest for experts to join an Expert Commission to examine the long-term funding model for Irish Water.

The commission must report to a special Dáil committee within five months and the issue of funding the network will be put to a Dáil vote.

But the bill allows the Government to extend the period of suspension if the Expert Commission needs more time or if the Oireachtas committee has not finished its work.

"The section (of the bill) also provides that the minister...shall extend the nine-month period of suspension by way of ministerial order for a further period if he or she is satisfied that an Oireachtas committee, established to examine the issue of funding of domestic water services, will not conclude its work by 31 March, 2017," it says.

Under the bill, households which have refused to pay bills to date cannot be hit with additional late-payment penalties as is currently allowed under the charging regime.

A penalty of €30 for a single-adult household, or €60 for a household of two or more adults, is meant to apply to bills that are 12 months overdue.

As the first water bills were issued in April last year, it means that those penalties now fall due.

Irish Water has previously said it would await the legislation to suspend the charges before deciding how to proceed.

The Water Services (Amendment) Bill says that Irish Water cannot bill customers for services during the period of suspension and that the nine-month suspension period cannot be taken into account when calculating late-payment charges.

The suspension of charges will result in Irish Water requiring additional funding from the Exchequer.

The utility, which this week appointed new managing director Jerry Grant at a salary of €200,000, collected €144m in domestic charges last year, around 53pc of the total income due.

Last year, customers were also entitled to a Water Conservation Grant, worth €100, to offset the cost of their bills.

This cost €110m to administer and deliver and the explanatory notes to the bill say the absence of this will reduce the cost of suspending charges.

"The suspension of domestic water charges... will result in customer revenue losses for Irish Water," the bill says.

It adds: "Due to the suspension of the 2016 Water Conservation Grant, for which €110m was originally allocated, the net additional cost of suspending water charges for nine months is unlikely to exceed €20m in 2016."

The Expert Commission is expected to be announced in the coming weeks and will include national and international experts with "professional expertise" in funding and financing of large-scale infrastructure investment and maintenance programmes, economic regulation, water-resources management and environmental law.

Irish Independent

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