Irish Water running up huge debt with little to show in investment
The numbers paying their Irish Water bills has exceeded Environment Minister Alan Kelly's wildest dreams. He's not merely satisfied, he is "beyond satisfied", ecstatic - that just 46pc of people are actually paying them.
Channelling Monty Python's Black Knight - who insisted his injuries were only a flesh wound even as his opponent hacked off his arms and his legs - Mr Kelly was adamant it was the Government's plan all along that most people would ignore their water bills.
In a flurry of media interviews last week, he likened compliance with the water charges to the household charge, which was also dismal - failing to note that fee was ultimately transferred to Revenue, and reborn as a local property tax, because collection rates were so dire.
The analogy was also pertinent for another reason - because a massive chunk of the money that is being collected for the local property tax is now going to Irish Water as part of the Government's annual subvention.
While the new utility may be useless at collecting money from its customers, it is excelling at hoovering up money from the Government and banks, receiving a dizzying array of enormous sums from a range of different sources.
Last year, for instance, its total Government subvention amounted to €439m, which all came from the Local Government Fund. This year the subvention figure that has been pencilled in is €399m, while an injection of €479m is planned for 2016.
The Local Government Fund, which is propping up Irish Water, is financed entirely through the local property tax and motor tax. Given that the local property tax raised around €470m last year, and Irish Water got €439m, it is, in effect, devouring nearly all of that income.
The State's generosity to Irish Water doesn't end there. The Department of the Environment gave it a €240m loan last year while it has also received a €300m loan from the National Pension Reserve Fund.
Meanwhile, an equity investment in the company by the Government has also been agreed for 2015 and 2016, with Irish Water receiving €222m in December 2014 and a further €184 due next year.
Add the €540m cost of the water metering programme, the €130m cost of the water conservation grant and the additional €6m the Department of Social Protection will spend administering the payment, and you begin to get some idea of the amount of money the State has already spent on Irish Water.
The financial problems don't stop there. Despite the vast sums of money being sucked up by the rapacious new utility, it was concerned about its financial position last year.
Minutes of directors' meetings released to journalist Gavin Sheridan at the weekend, after he appealed an earlier refusal to the Information Commissioner, reveal the extent of the alarm.
In July 2014, the minutes note there are issues with "non-payment and late-payment of suppliers" and state the directors' intention to escalate their "dissatisfaction with the current funding position".
The minutes also record Irish Water signing up to a Bank of Ireland overdraft of €50m, a €100m Ulster Bank "revolving credit" facility and a €50m loan from AIB. Separately, the 'Sunday Independent' reported at the weekend that Irish Water had borrowed a further €550m from banks this year, including Barclays, BNP Paribas, Danske, HSBC and Royal Bank of Scotland.
I contacted Irish Water to query whether this €550m was in addition to the €200m of borrowing last year and, while it was unable to confirm the specific amount, it said these "significant" commercial borrowings were a vote of confidence in the company as a "sound investment".
"Utilities use the revenue raised from customers to allow them to borrow money from commercial banks," it said, noting the company was set up with the express purpose of borrowing money in order to invest it into the water and waste-water network.
So, given all of this money sloshing around in Irish Water, the big question is how much is it spending on actually repairing the water network? Is the Government's stated plan, to boost investment, working? No, in fact, investment is down. Documents obtained by RTÉ under Freedom of Information last year revealed that the company's capital spend in 2014 was just €300m. In contrast, between 2004 and 2013, the average annual spend on infrastructure by Government was €430m.
Despite Irish Water hailing the €540m metering programme as a prudent investment to help it detect leaks, the documents also showed the company fixed the same number of leaks last year as it did the year before. Meanwhile, last year Irish Water vowed to eliminate boil notices by 2016, but earlier this year a new target of 2021 was announced - without any acknowledgement that its self-imposed deadline had mysteriously increased by five years. Leaks will not be reduced to an "acceptable level", 20pc, for another 25 years.
Irish Water has stated it eventually aims to invest €600m annually in water infrastructure, but it remains to be seen if this will be achieved this year, given its increased commercial borrowing. Last year, its own capital investment plan earmarked just €410m for investment this year and next, which is also below the average annual spend on infrastructure prior to its establishment.
The reason for this litany of failure, other than historic chronic underinvestment, can be found in the board minutes that were published at the weekend. During the week, an uncharacteristically coy Mr Kelly refused to reveal any targets that Irish Water may have set but, in July 2014, the directors noted the company had set a compliance target of 85pc for December 2014. To date, just 70pc of customers have even registered while just 46pc have paid a bill.
To make matters worse, a farcical situation now exists whereby those who have registered but failed to pay their bill can still apply for a €100 grant - at the same time the Department is cutting payments to lone parents.
Given that no fines or enforcement measures can be imposed until after the next General Election, and a number of opposition parties are campaigning on a policy of abolishing the charge, why would anyone be inclined to stump up when they may find themselves out of pocket with no prospect of a refund?
In the meantime, the onus now is on opposition politicians to explain how they intend to dismantle, or change the funding stream for, Irish Water without costing the Irish people another arm and a leg.