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Suggestion that Irish Water would not pass 'market test' even if every household was paying charges

The EU's statistics agency has suggested that Irish Water would not pass its so-called 'market te...
Newstalk
Newstalk

13.39 28 Jul 2015


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Suggestion that Irish Water wo...

Suggestion that Irish Water would not pass 'market test' even if every household was paying charges

Newstalk
Newstalk

13.39 28 Jul 2015


Share this article


The EU's statistics agency has suggested that Irish Water would not pass its so-called 'market test', even if every household was paying its water charges.

It is claimed that Irish Water is not receiving 50% of its income from the private sector - and that this would be the case even if every bill was being paid.

It is also claimed that the government has too much control over the pricing structure of Irish Water.

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The government claims it will not change its policy on water charges - but Renua Ireland leader Lucinda Creighton says the government needs to abandon Irish Water as an entity:

The Finance Minister Michael Noonan says Irish Water will not be abolished or changed in any way, despite a Eurostat ruling against it.

The EU body says Irish Water debts and spending have to be considered as part of the government balance sheet, even though the government wanted it treated separately.

This means the national debt looks set to rise by roughly €500m.

The debts will now rest on government books until 2020, putting a major dent in the Irish Water business plan.

Mr Noonan says "there's no crisis" and that the ruling will not force the government to change its plans for the budget.

And he says the plans for Irish Water to upgrade the water network will continue unaffected.

Read the Eurostat ruling here

Environment Minister Alan Kelly said, “the Government believe that the revenue accruing from affordable water charges, coupled with the forecast savings of over €1.6 billion to 2021, mean that Irish Water is a viable commercial utility which will in due course be treated in the same manner as our other utilities and many public water utilities in Europe."

Health Minister Leo Varadkar told Newstalk Lunchtime that the Eurostat decision is “not a hugely significant” setback and “very likely a temporary one.”

“If the decision is that it stays on the books of the State that would be a setback, but it wouldn’t be as significant a one as people think,” he said.

“It won’t change anything in any practical way, we’ll still have the same amount of investment and metering and so on.”

The government anticipated today’s decision, Mr Varadakar says, and made allowances for it in their budgeting.

The Eurostat tests are not permanent, Mr Varadkar pointed out, and the tests could be run at a later date, potentially with a different outcome, he added.

“What will happen is that the market corporatisation test can be repeated. As Irish Water develops, as we’ve better payment figures in time, then the test could be completed and then it could go off balance sheet,” he said.

Opposition TDs have been launching scathing attacks on the government today.

Fianna Fáil leader Michéal Martin called for a comprehensive statement from the Taoiseach about what they plan to do now. 

He said, “the whole debate around Irish Water and the introduction of water charges has been punctuated by mistruths, threatening rhetoric and mismanagement from Government at every juncture.

"The fact that Irish Water has failed to meet the Eurostat test is a damning indictment of the policy that has been adopted and the rush to establish the agency and bring in water charges," he added.

Sinn Féin’s Pearse Doherty saying the news is a "death knell" for Irish Water.

"On this test....I believe the €100 so-called water conservation grant would be seen as a direct subsidy to Irish Water form the government via households", he told Newstalk Breakfast.

"Also to satisfy this test, you actually have to be operational for a number of years and show that the 50% rule - which is where 50% of the proceeds of Irish Water are coming from the charging structure for the product - which is water in this regard".

"That was unlikely to met given the water conservation grant - but also given the non-payment of water charges".

Fianna Fáil’s Barry Cowen told Newstalk Lunchtime that “this is nothing short an unholy mess. It’s an unmitigated disaster. It completely dismantles the construct that is the quango...Irish Water.”

“I would abandon Irish Water, I would abolish Irish Water,” he said.


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