Environment - Response to: Consultation on the establishment of a Public Water Utility - Feb. 27, 2012

In response to the DoECLG's request for views on their Water Services Reform, Phase 1, Report and Position Paper (January 2012) the IAE and EI on the 24th February 2012 issued them with their joint "Response to Consultation on the establishment of a Public Water Utility", (i.e., Irish Water). The IAE and EI welcomed the DoECLG's Position Paper and the Phase 1 Report (by PwC). The IAE/EI submission's comments on finance call for a robust and transparent funding model, which includes for the substantial legacy issues on the Local Authorities' books. Exchequer funding for the initial implementation years will be required, for both Irish Water (IW) and the Local Authorities. The complexities of the necessary transfer of assets are highlighted. The avoidance of a legal cost bonanza will require strong legislation to allow the Minister to vest assets in Irish Water. The submission recommends the State Company Incubation Option for Irish Water, contrary to the Phase 1 Report's dismissal of this option, in favour of a Management Partner. The IAE/EI welcome the proposal to transfer the Strategic Planning role for water services to Irish Water. The importance of the early and ongoing conduct of Regulatory Impact Assessments and Risk Analyses is recommended, using the knowledge of the sector and its key issues, resident in existing practitioners. Concerns are expressed on how the water metering programme may be carried out and again recommends the advice of experienced professional practitioners be taken on the approach to be adopted. It also calls for the roll-out to be referred to the Regulator for regulatory impact assessment and risk analysis. Overall programme cost estimates are queried and it is noted that lifetime and recurring costs must be included. The IAE/EI recommend that no "free allowance" be provided when water charges are introduced, with disadvantaged customers dealt with by the Social Welfare system (making payments to Irish Water on their behalf). Finally it is recommended that legacy liabilities are met from the Exchequer, rather than recovery through higher water charges, burdening customers and impacting negatively on national competitiveness. The full submission may be viewed by following the link above