Guarantee fee only adds to water costs
It seems ridiculous in the extreme that when an arm of the State lends to another, it not only charges interest but also a fee for underwriting the loan.
Yet this is precisely what has happened in the case of Irish Water, the semi-State company which borrowed €300m to fund the meter installation programme from the National Pensions Reserve Fund (NPRF).
As Irish Water had no assets and no income stream, the NPRF was understandably reluctant to lend. It insisted on a guarantee, which the Government stepped in and provided.