The Managing-Director of Irish Water has defended its spending on consultants and says the government was always aware of its need for outside help.

John Tierney says the Department of the Environment was aware of the bill for consultants last March and has promised that setting up Irish Water will not cost any more than €180 million.

Mr. Tierney also says it is not for him to answer if there was Ministerial approval for €85 million to be spent on consultants.

He is answering questions at the Oireachtas Environment Committee.

Irish Water got approval in the autumn of 2012 for a €180 million start-up budget - including €85 million on consultants.

Fianna Fáil's Barry Cowen says he is certain the Environment Minister would have had to sign off on that.

Mr. Tierney has told the Committee those costs are necessary if Irish Water is to do its job properly.

Senior management from Irish Water are answering questions from the Oireachtas Environment Committee following uproar after it was revealed last week that €50 million has already been spent on various consultancies.

It has since emerged that the total spend on consultants by Irish Water will exceed €80 million by next year.

Irish Water earlier issued a statement insisting all of its contracts fully comply with public procurement rules. The organisation says Bord Gáis and Irish Water have been scrupulous in the awarding of contracts, and in following EU guidelines.

Junior Finance Minister Brian Hayes spoke to Newstalk Lunchtime about the newly revealed €80 million consultancy figure.

The revelations follow claims today that a number of Irish Water contracts never went to tender.

Irish Water executives will also appear before the Public Accounts Committee (PAC) tomorrow.

Political Editor with the Sunday Business Post, Pat Leahy, told The Pat Kenny Show committee members will have questions for management to answer on how the contract system works.

Company statement

Irish Water's statement also says "Bord Gáis and Irish Water have been scrupulous in the awarding of contracts. To ensure value for money and transparency, all contracts have been awarded in line with the guidelines set out at EU level for public sector procurement.

Irish Water was established within Bord Gáis so that the new utility could benefit from the expertise and experience of being part of a world class utility. In practice this means using Bord Gáis’ capability running billing, asset management and utility financial systems. In order to do this, Irish Water has been set up using the same proven IT systems and processes as Bord Gáis. This has enabled Irish Water to save at least €58 million in software licences and also to meet the challenging timetable for set up.

The procurement of software licences with Bord Gáis was subject to a full competitive tender process...

Both Irish Water and Bord Gáis strongly reject any suggestion that the company was not fully compliant with all procurement rules."

Cabinet to discuss

Meanwhile, the Cabinet is expected to discuss the controversial spending by Irish Water s when it holds its first meeting of the New Year today.

Sinn Féin President Gerry Adams says the government handling of Irish Water has been "shameful".

He says it is a "Trojan Horse" for privatisation of Ireland's water supply.