Taxes in the Pipeline

Orla Ní Dhúil


A lot has been written about Irish Water in the last few weeks following revelations that ¤50 million had been spent by the semi-state body on consultants alone. For those of you just joining this story, Irish Water is semi-state subsidiary of An Bord Gáis, answering to the Commission for Energy Regulation (CER) and the Environmental Protection Agency (EPA).

It was created by the Water Services Bill in early 2013 and then further defined two months ago in the second Water Services bill. It will take at least five years to fully set up and is already budgeted to cost the state ¤180 million, assuming it stays within budget. One of the reasons Board Gáis won the tender to set up Irish Water was that they claimed to have a national customer billing network, which could be extended to cover water bills. But in their first year they decided they needed to spend millions of euros hiring consultants, partly to advise them on a billing system.

Not only is the project expensive but the Government has been consistently inconsistent in their statements regarding Irish Water. Minister for the Environment, Phil Hogan, is at the centre of controversy because in November 2012 he told an Oireachtas committee that Irish Water’s set up costs would be ¤10 million. The apparent surprise of political leaders about the spending of ¤50 million on consultants was hardly reassuring. That figure is expected to reach ¤85 million in the next few months. Hogan claimed that the consulting contracts given out by Irish Water were “not my business”, though as he is the Minister for the Environment, it is unclear whose business Hogan believes this to be.

Also not reassuring was the apparent disagreement between Tánaiste Eamon Gilmore and Irish Water chief John Tierney over whether or not water service could be disconnected for those who do not pay the charges. John Tierney told Newstalk that people who did not pay their water bills would suffer disruption to the service but Gilmore claimed he “didn’t see how that could be the case” which is hardly a strong denial. Gilmore went on to say “In any event, the question of what regime will be in place is not yet determined and it’s too early to be speculating.”

But some might hope the Tánaiste would be sufficiently informed that there would be no need for speculation. Especially as there appears to be provisions in the Water Services (No. 2) Bill, which was signed into law only months ago, clearly prohibiting the cutting off water services to homes.  It has been suggested that Irish Water believes they can reduce water pressure to a house to a level where appliances like showers will not work, while remaining technically within the law as the kitchen tap will still work.

“Installing water metres will cost the state half a billion euro, a figure made particularly galling as state investment in water infrastructure has fallen in the last 3 years from €435 million to €286 million.”

 All that could be written off as just the usually inter-department incompetence that is the hallmark of much of Irish politics but the problems surrounding the formation of Irish Water run deeper. Water conservation is an important issue but there seems to be little to no focus from the government on protecting Irish water from pollution from industrial or chemical leaks or of encouraging the public to invest in water saving message such as grey water systems for toilet cisterns or rainwater collection.

In fact, following speculation that water tariffs may need to rise if the public conserves water, questions remain over the effectiveness of this system at all. The money being spent on the installation of meters would have had a very significant long term impact if it had been used on the water system itself, which implies that the creation of Irish Water has more to do with raising taxes without calling it tax, than it does with the environment.

Installing water metres will cost the state half a billion euro, a figure made particularly galling as state investment in water infrastructure has fallen in the last 3 years from ¤435 million to ¤286 million. In Dublin alone there are 800km of water main that are over 80 years old.

“So far, a total 115km of water main have been rehabilitated in the Greater Dublin region and surrounding counties, with 11 million litres of water per day saved”, said Tom Leahy, Executive Manager of Dublin City Council, in a press release in July 2013. He was announcing a ¤3.95 million contract to replace a further 20km of aging water pipe, work that is still ongoing.

If we do a little maths we’ll see that the remaining 685km of old pipes that have yet to be replaced could be losing up to 76 million litres of water every day. The fact that in July last year there were water restrictions in place due to dry weather in a country that floods once a year would lead many to believe water is simply not being collected and stored adequately.

Much of County Roscommon has had a boil-order on their water for over 6 months due to cryptosporidium in the supply. Cryptosporidium was also found in Galway’s water supply in 2007 and again in 2008. Mains water in the Lifford area of Donegal has been periodically undrinkable for a number of years. This is the water that Irish people are expected to pay for?

John Tierney claims that his company will save the Irish taxpayer ¤2 billion by 2021. But this idea of saving the “taxpayer” fails to take into account that “savings” on the state budget are achieved through payment of water bills made by said taxpayers as individual citizens.

These are just the flaws of management. The underlying ethics and precedent set by these events are even more concerning. The water tariff is another in a series of blanket taxes that will affect lower income families the most.  For those on low incomes, a water bill will be a much greater proportion of their cost of living than someone on a high income.  Irish Water is also being set up as a profit-making organisation, which is a dubious sentiment to hold around the nation’s water supply.

The manner in which Irish Water has been created, the management ethos displayed by their early decisions on the use of consultants and their aggressive position on reducing people’s access to water who cannot pay is early evidence that this approach to managing water is all about profit and has nothing to do with conserving water or improving services for Irish people.