On Tuesday the Environmental Protection Agency (EPA) warned about the health risk posed by Irish Water's old pipe network. The agency warned that the slow rate of lead pipe replacement by Irish Water would postpone their replacement by as much as 60 years.
Lead pipes pollute water supplies, which studies suggest leads to brain damage in the young and infants, and in adults may contribute to kidney damage and high blood pressure. Disinfection keeps water free of harmful bacteria, viruses and parasites - but in pipes "lead presents a different problem where the only remedy is to remove the lead network", according to the EPA programme manager speaking on Monday.
The old lead pipes adversely commented upon also have an economic cost as they leak water. The McLoughlin Report on Local Government Efficiency (July 2010) found that 41.2pc of water produced by local authorities in Ireland was "unaccounted for". It never reached the customer. Between the reservoir and the household, 41.2pc of water leaked out of the system. Roscommon had the highest unaccounted for water, with 58.6pc failing to reach the customer.
The EurEau series on water loss across European countries showed Ireland in 2017 losing 47pc of its water. This is double the EU average. It is an increase on the McLoughlin report, at the start of the decade, of 14pc.
In contrast, the best-performing countries in the EU for a low share of waste water are the Netherlands (5pc), Germany (7pc) and Denmark (8pc). Producing expensive water which literally goes down the drain reduces Ireland's competitiveness in relation to our EU neighbours and is bad for our health.
Ireland's water performance is weak by world standards also. Earlier World Health Organisation (WHO) figures list waste water loss at 8-24pc for developed countries, 15-24pc for newly industrialised countries, and 25-45pc for developing countries. The latter figures are significantly lower than in Roscommon.
The belief that customers waste water in Ireland underpinned the policy of water charges. More than €500m was spent on water meters addressing this non-problem. The target should have been the leaking pipes run first by local authority water engineers and latterly by Irish Water itself.
The problem with the local authority sector as a producer of goods and services was identified by the McLoughlin report. It recommended reductions of 30pc in city and county managers, 20pc in directors of services, 15pc in senior and middle managers, 10pc in corporate services staff, and 15pc in senior management in the cities of Dublin and Cork.
Employment in the water sector was protected by a deal lasting to 2026. Economist John FitzGerald estimated that Irish Water had agreed to employ 4,300 county council water service workers when the job could be done by 1,700. Michael Brennan, who wrote a book about Irish Water ('In Deep Water', 2019), cited Irish Independent estimates that this would add €90 a year to water bills.
The increase of 14pc in water waste by Irish Water compared with the local authorities at 47pc under the new regime, as against 41.2pc between 2010 and 2017, must have been an unpleasant surprise to those who believed that Irish Water, a new organisation, would be an improvement on local authorities as water providers.
The normal start-up costs of corporate headquarters, regional offices, corporate logos and so on presumably diverted the new organisation from addressing effectively the serious problem of waste water in Ireland. No net progress has been made in reducing waste water in Ireland in the decade since McLoughlin reported.
The overall increase in water waste since McLoughlin reported in July 2010 raises the question of whether Irish Water is worse than the sum of its parts. Before Irish Water was formed there were several local authorities with low water wastage, such as Limerick County (16.83pc), South Dublin (19.79pc) and Fingal (21.61pc). Their influence on bringing efficiency in the water sector as a whole up to their standards seems to have been limited.
Joining Roscommon at the wrong end of the unaccounted water league were Galway city and county (both over 49pc), Cork City (52.93pc), Kilkenny (56.79), Offaly (50.87pc), North Tipperary (49.52pc), and South Tipperary (55.43pc). The health of those living in these counties is also adversely affected.
The Commission for the Regulation of Utilities Monitoring Report on Irish Water Capital Investment Plan (2017-2021) notes that "Irish Water is reporting that the annual average daily unaccounted for water was higher in 2017 than 2016" (April 2019; Monitoring Report No.2). The increase was 23,000,000 litres per day.
The imposition of water charges as a replacement for direct taxation in the financing of water supplies was seen as regressive by residents of low-income neighbourhoods in particular. Equity, or fairness, is a canon of taxation going back to economist Adam Smith writing in 1776.
When opposition to water charges drew 100,000 opponents onto the streets here in recent years, the onus was on policy makers to examine the incidence of water charges by income group. Water charges thus failed two economic tests. On resource allocation grounds, they attributed water waste to the customers rather than to Irish Water's leaky pipes. On equity grounds, the promoters of water charges failed to show that they would be more equitable than, for example, direct taxation in funding the water sector.
What about the customers in generating excess demands on water supplies? The Irish Water case blames those who shower at length and water their gardens. In February 2020, estimates were that some 3.6pc of Irish Water users would face supplementary charges for excessive use of water and would be levied in 2021. This waste level is far short of the 47pc water waste by local authorities themselves in old leaky lead pipes.
The customer was wrongly targeted by water charges and some €550m was spent on water meters to deal with this non-problem. The money spent on water meters should have been spent on pipes. This would have addressed directly the waste of valuable water in leaky lead pipes and the health hazard to the public posed by the same pipes. An economic and health problem would have been solved simultaneously.
A wrong policy option made Irish Water the biggest water waster in the country. This week we had further evidence from the EPA that the policy is also a major health hazard. Reform is indicated. Health and economics rhyme.
Sean Barrett is an economist and former senator