There has been a historical under-investment in water and waste water infrastructure which now needs to be addressed, as well as a requirement to invest for future needs, the Minister for the Environment, Heritage and Local Government told the Dáil.
Speaking during a debate on water services reform, he said the requirement for continued significant capital investment in water services had been estimated at €600 million annually - as compared to about €370 million in Exchequer capital spending this year - together with the provision for the backlog of investment required mainly to meet statutory obligations.
“In the context of our current public finances, this presents a significant challenge which requires an innovative response to develop a sustainable funding model which can deliver these massive investment requirements,” he said. “The existing approach where water services are delivered through 34 water service authorities has inevitably lead to fragmentation in delivery and duplication of functions across authorities which has inhibited our capacity to gain advantages through economies of scale.”
A public water utility offered the best opportunity to build on the strengths of the existing system, improve efficiency and effectiveness of water services delivery, provide access to new funding sources and improve strategic planning and accountability.
“Establishing Irish Water as an independent State-owned company within the Bord Gáis Group will facilitate making best use of existing resources and capacity within the public sector,” he said. “In deciding on this approach, the Government recognised that Bord Gáis Éireann has key capabilities that can be brought to bear in the establishment of Irish Water, including experience in operating as a utility in a regulated environment and a track record in raising finance.”