Saturday, December 17, 2016

Tagged under: , ,

The Irish Water Sector – A Sorry Tale

Joe Dalton, a proponent of water charges, makes the case for them in his blog Joe's Water Blog. Joe Dalton has been a Water Engineer/Consultant for the past 16 years and is based in Bahrain.

When it comes to water, Ireland is on a different planet to the rest of the World. The provision of water and wastewater services in the country is in a somewhat chaotic state. Almost uniquely, Ireland (along with Northern Ireland) has not until now had domestic water charges, apart from recent, and some earlier, stalled attempts to introduce them. Speaking as a Water Engineer/Consultant with some understanding of what goes into providing safe water at the tap and safely removing wastewater, I see the case for water charges as self-evident and essential for effective water services provision across the country. Many of my fellow countrymen and women appear to disagree. Today a Special Oireachteas (Parliamentary) Committee holds its first meeting to decide the future funding of the sector. Their deliberations are expected to last three months.

That Ireland in this situation is primarily the result of political failure over an extended period dating back to the 1970s. In this article I hope to make a logical and progressive case for water charges in Ireland and analyse the failures that have got us to this point.


Brief Recent History of Irish Water Sector (1977 – 2008)

To understand what has brought us to this point we have to go back to at least 1977 and the Fianna Fáil government which abolished all domestic rates at that time following their landslide victory in the general election of that year. Until the 2013 establishment of the national Irish Water utility, water services continued to be provided by over 30 separate local authorities across the 26 counties of the Irish Republic. Since 1977 local authorities were in the main funded through central taxation, though in 1983 the Fine Gael-Labour coalition Government reduced centralised funding and gave local authorities the flexibility to introduce charges for local services, including water. Different local authorities took slightly varying approaches. This was never likely to work in the long term, as unless charges were applied uniformly across the board they were not likely to be accepted in one or more particular local authority areas.

In January 1994 Dublin was split into four local authority areas, following which an attempt was made to introduce water charges in the capital city. Councils threatened to cut off households who failed to pay their water bills. They would then face a £100 fee to reconnect. This led to a determined campaign of grassroots resistance in the form of the Dublin Anti-Water Charges Campaign (DAWCC) who encouraged non-payment of bills and obstructed attempts to cut off supplies. In December 1994, in the middle of this protracted dispute, there was a change in Government, though without an election, from a Fianna Fáil-Labour coalition to a “Rainbow” coalition of Fine Gael-Labour-Democratic Left.

With non-payment rates high, the decisive turning point in defeating this attempt to introduce water charges was the strong performance, 23.7% of the vote, of leading DAWCC and Socialist Party member Joe Higgins in the Dublin West by-election of April 1996, where he came within 370 votes of taking the seat from Fianna Fáil. With a general election the following year, and the Governing parties (especially Labour and Democratic Left), fearing this new electoral challenge, the Labour Party Environment Minister Brendan Howlin announced the abolition of all local authority domestic water charges on 19 December 1996 and gave effect to it through legislation shortly before the general election. Regardless of this, Joe Higgins was duly elected in the four seat constituency in the general election of 6 June 1997, at the expense of the Labour Party, with 17.1% of the vote becoming the first Socialist Party Teachta Dáil (TD). The newly elected Fianna Fáil Government, which was to remain in power (with varying coalition partners and independent supporters) through successive elections until 2011, didn’t embark on the politically risky path of attempting to reintroduce domestic water charges until after the global financial crisis of 2008, which I will go into below.
The Case for Water Charges

Water and wastewater infrastructure is a very capital intensive industry. There are massive costs associated with connecting households even before a single drop of water is supplied. An effective water utility is essential for the health of the nation, especially for the most vulnerable (much more important than the Health Service Executive). Therefore it is stating the obvious that it needs substantial funding. The challenge is how to make this funding effective, equitable and efficient. The funding model needs to be viable so that it will continue to deliver the required service well into the future. Importantly it also needs to be transparent so that the Irish taxpayer/rate payer has confidence that all expenditure is justified.

The costs of running a water utility can be essentially broken into three components:
Operation and Maintenance (Basic Utility Running Costs)
Capital Maintenance (Existing Asset Depreciation)
Capital Infrastructure (Construction of New Assets)

Operation and Maintenance encompasses the day to day running costs of a utility. These costs have to be met, otherwise households may receive a poor quality service or suffer from supply interruptions. A goal should be for a water tariff structure that creates a predictable revenue stream that meets as much of these essential running costs as possible. Essential services would then not be put at risk by political budgetary constraints of the time. This is a common problem when water services have to compete for funding with multiple Government spending priorities.

Having the tariff cover the running costs assumes that the utility is operating at an efficient level. As Irish Water is early in its journey, in the short term the tariff would only contribute a relatively small portion of the running costs and will need supplementing from the taxpayer. Over time it should become more efficient. Transparency is the key here and any supplement should be justified to the regulator acting on behalf of the taxpayer. The goal should be for Operation and Maintenance costs to be covered by the tariff. The expectation of endless hand-outs from the taxpayer does not help foster an efficient and productive utility. The current Irish funding model, general taxation with water free at the point of use, is certainly equitable. But I would argue not effective or efficient and has not delivered for the Irish people. Nor has it anywhere else in the World.

Ensuring water services remain available and affordable to the poorest in society is a crucial duty of a national water utility. Indeed it is the primary justification for such an organisation to exist. As recommended by Engineers Ireland[1], a payment from the Department for Social Protection to Irish Water on behalf of the most vulnerable households who cannot afford to pay would ensure the human right to water and sanitation for all. It would facilitate the predictable revenue stream to allow us engineers to budget accordingly and get on with the job of running the utility.

Anti-water privatisation activists generally regard the notion of “cost recovery” from tariffs as anathema. The Right to Water campaign in Ireland would allege that all of the above are a pathway on the road to the ultimate goal of privatisation. Though I have no inside knowledge, I would be perfectly preferred to speculate that many Irish and European civil servants would like to see some sort of water privatisation. Personally, I am not ideologically hung up on the whole public versus private issue. I am more interested in something that works, whether public or private. What I would strongly oppose is any attempt to impose water privatisation, against the wishes of the Irish people, by any institution involved in imposing the unjust austerity burden, of which I elaborate on below.

It is a fact that the more successful Irish Water becomes as a utility organisation, the more attractive it would become to a potential private operator. However this does not make privatisation inevitable or even desirable. It is a very weak argument that keeps water services dysfunctional just to guarantee that there will be no privatisation. My own preference is for an effective public utility.
Water Charges and Metering in the rest of the World

For the rest of the World paying for water services is a normal part of life, including for publicly owned utilities (the vast majority of global water utilities are public). The practically universal pattern around the World is for water services provision to be transferred from municipal authorities to a specialised utility provider operating on either a national, regional or water catchment basis. Most countries, both developing and developed, made this transition some decades ago. Though there are voices within the water activist movement that argue that water should be free at the point of use, these are far from universal and have mostly not been acted on. This is reflected in the European Citizens Initiative for the implementation of the human right to water across Europe, who state “What we promote are social tariffs. The more you use the higher the price per m3”[2]. This differs from the free at the point of use position taken by the Irish Right to Water movement.

In the 1990s there was a strong belief among international funding agencies, such as the World Bank and others, that some form of privatisation, or public-private partnership (PPP), was the answer to improving water service delivery in the developing world. Some high profile privatisation failures, such as in Cochabamba, Bolivia in 1999/2000, led to the birth of the global water activist movement to resist privatisation of which the Right to Water movement in Ireland would be a part. As societies have largely rejected the notion of private control of water, the global trend over the last decade, with some exceptions, has been very much of not renewing PPPs once their term expires and of not initiating new water privatisation schemes. As water services are brought back under public control water charges have remained however, though now accountable to a public body. Even at its height in 1997, privatisation always constituted a minority of global water utilities. The majority of global utilities that always remained public continue to have domestic water charges and metering.

Domestic metering is an issue that has proved particularly controversial in Ireland. As someone who has worked on helping several utilities around the world to reduce their water losses, I see meters as both a revenue raising instrument, but also importantly as a water management device. A goal of global water utilities, whether public or private, is to maximise their level of customer metering. The more metering, the higher the accuracy of information related to consumption and therefore the more accurate leakage can be calculated and localised. It is this, rather than water conservation, that makes metering desirable from an engineering point of view. In the UK there is approximately 50% customer metering, with flat rate charges for those unmetered. This results in an artificial “increase” in leakage calculations in the summer months when “actual” unmeasured consumption is higher. Much research, and therefore money, is put into creating accurate seasonal user allowances for unmetered customers. Having universal metering facilitates the localisation of leakage. This point is often lost in Ireland where calls are regularly made to simply fix the leaks. The leaks have to be found before they can be fixed. Metering is one of the tools that assists this process.

However, to go from zero to universal metering is indeed costly. Part of the business case for it is the greater data certainty that it provides, from a water management as opposed to revenue raising point of view. In terms of priority the larger users should be metered first. The current level of customer metering in the UK was achieved gradually over several years through steps such as, compulsory on new builds, then on change of occupation, then in water resource challenged areas, then encouraging households to voluntarily have a meter installed. That no domestic metering was installed in Ireland during the housing construction boom that existed over the previous two decades was an act of gross engineering negligence.

Two of the most celebrated success stories in the developing world in recent years of public water management were the National Water Supply and Sewerage Company (NWSC) of Uganda and the Phnom Penh Water Supply Authority (PPWSA) in Cambodia. Both are examples of how utility success can be achieved without privatisation and have been cited approvingly by anti-water privatisation activists. Both involve water charges and domestic metering as a central part of the services delivery model. Indeed the account by their former Managing Director William Muhairwe of how the Ugandan utility achieved their remarkable success Making Public Enterprises Work: From Despair to Promise: A Turnaround Account (IWA Publishing, 2009) has become a classic among global water practitioners. It is a truly inspirational read and comes highly recommended.

This is not to say that water and sanitation services provision around the World is without its challenges. Far from it. But the notion that water should be free at the point of use is not widely argued never mind implemented even in the most challenging circumstances. For example in Detroit, Michigan where a submission by a group of anti-water privatisation activists to the United Nations Special Rapporteur on the Human Right to Water and Sanitation reported that due to the dire financial situation of the city governing authorities, the public water utility aggressively targeted the non-payment of bills. This resulted in the disconnection of some of the most vulnerable households. What is noticeable in the context of the Irish water charges controversy is that while the report decries the appalling situation for the poor of Detroit it does not call for the abolition of water charges. In their key recommendations they call for respect for the human right to water and sanitation but anticipate this to allow for a “sustainable financing plan and rate structure”, “fair water rates for the residents of Detroit” and call for the implementation of a “water affordability program”[3].


Water Framework Directive – Article 9

The most important piece of European water sector legislation, the Water Framework Directive (Directive 2000/60/EC[4]) sought to achieve “good ecological status” of all water bodies by 2015, a very challenging goal. As regards water charges, the issue is touched on in Article 9 of the Directive. This is often quoted unconvincingly in support of a contention that Ireland is legally obliged to introduce water charges.

As water charges are a fact of life for every other party to the Directive there is little doubt that were it not for Ireland, the language in Article 9 would be much clearer in articulating an obligation for water charges. Because of the unique approach taken in Ireland, the Irish negotiators ensured that Article 9 was ambiguous and open to interpretation. Paragraph 1 of Article 9 states that “Member States shall take account of the principle of recovery of the costs of water services” in accordance with the “polluter pays principle”. The words “shall take account” could mean almost anything.

It then proceeds to state that “Member states shall ensure by 2010 – that water pricing policies provide adequate incentives for users to use water resources efficiently” and “an adequate contribution of different water uses, disaggregated into at least industry, households and agriculture, to the recovery of the costs of water services” and “taking account of the polluter pays principle”. These words are often used by supporters of water charges to imply that Ireland had a derogation of charging for water until 2010 and that this derogation no longer applies.

Paragraph 1 ends with stating that “Member States may in so doing have regard to the social, environmental and economic effects of the (cost) recovery as well as the geographic and climatic conditions of the region or regions affected”. This is often used by opponents of charges to argue that negative social effects of introducing water charges mean that they should not therefore be introduced.

The real get out clause comes in Paragraph 4, with Irish finger prints all over it, which states that “Member States shall not be in breach of this Directive if they decide in accordance with established practices not to apply the provisions of paragraph 1” as long as “this does not compromise the purposes and the achievement of the objectives of this Directive”. There has been a continuing discussion in Ireland on what are the “established practices” as referred to here. Some supporters of water charges, such as the European Commission and those Irish politicians who defer to it, argue unconvincingly that once they were introduced they became “established practice” and that removing them is now a breach of Article 9. Opponents argue that charges never became “established practice” and that Ireland has a legal right not to impose charges in line with the “social” effects and the previous “practice” of not having charges.

For reasons I go into below, I believe the above argument is a distraction from the failure of Irish officials to develop and articulate a water policy in the best interests of the country.
Austerity and Water Charges – Post 2008

Following the general election of 2007 the Government was still led by Fianna Fáil but this time in coalition with the Green Party, which was ideologically more supportive of water charges in line with their environmentalist and conservationist principles. The issue only came to the fore following the global financial crisis of 2008 and the infamous bank guarantee. Executives from privately owned banks, that happened to be based in Ireland, persuaded the Irish Government to transfer financial liabilities of over €60 billion, to their creditors and corporate bondholders, onto the Irish taxpayer. Most of these liabilities were to European institutional investors and manifested themselves as huge losses following the bursting of the Irish property bubble. This massive liability led in 2010 to control of Ireland’s finances being handed over to the “troika” of the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF), a humiliating moment in modern Irish history. Attempts by the Fianna Fáil Minister for Finance, the late Brian Lenihan TD, to relieve the Irish taxpayer of some of this debt burden, particularly the unsecured institutional investor debt, were vetoed by the troika for fear of a contagion impact on European banks. The troika made further Irish Government financing conditional on the Irish taxpayer accepting this financial liability and the associated austerity program required to meet it.

Preparation of Irish budgets became exercises in how to fleece Ireland of as much money as possible. A whole host of revenue raising devices were created, higher income taxes, new charges such as the universal social charge and cuts to public spending. Unfortunately, this mixed needed improvements with bad motives. There were undoubtedly areas where sensible reforms were needed in order to eliminate waste, improve productivity and achieve greater efficiency in the spending of taxpayer’s money. That it took the troika to do this is an indictment of successive Irish Governments. That these improvements were only being implemented so that unsecured European investors could be covered for their poor investment decisions was galling.

Yet the Irish taxpayer appeared to take their austerity medicine mostly without complaint, with only a few resisting voices such as the dignified weekly protest by the people of the village of Ballyhea in County Cork, a protest I wholeheartedly admire. The tipping point that finally brought a critical mass of the people onto the streets in protest was the imposition of water charges. This turned out to be one charge too far. This eventually manifested itself in the form a national Right to Water movement that believes water should be free at the point of use for domestic users. Frustratingly, while I admired their energy and sympathised with many of the sentiments expressed, I could not agree with the protestors.


Irish Water and the rise of the Right to Water Campaign

As part of the troika initiated programme of reform, in 2010 the Fianna Fáil – Green Party coalition agreed to the introduction of domestic water charges by 2013 and to the establishment of a national water utility which would take over the responsibility of water services provision from the 34 local authorities. Fine Gael in opposition pledged to oppose any flat rate charges. Labour pledged to oppose water charges and vowed to stop Fine Gael from introducing them if as expected their support was needed for a coalition Government after the next election. As expected, due to the catastrophic state of the economy, Fianna Fáil was massively defeated in the general election of February 2011, which saw a Fine Gael – Labour coalition take power.

Once in power the coalition took a very different tune, with the Fine Gael Environment Minister Phil Hogan announcing a program of change for water services provision that was staggering in its ambition. It is worth reminding ourselves of it:
Change from local municipal to national utility control
Installation of universal domestic metering
Introduction of domestic water charges
Semi-state utility to be removed from national balance sheet
All the above to be achieved within 18 months

Decades of poor water sector governance was to be rectified, and recent history turned on its head, in less than two years. Each one of the above constitutes a major change. That these changes were only being implemented after the Irish taxpayer was already being fleeced in every conceivable manner, and at the behest of those doing the fleecing made it all the more ambitious and assumed the continued acquiesce of the Irish people.

Irish Water was duly established on 27th July 2013 as a subsidiary of Bord Gáis, the state owned gas utility. The main argument in favour of this arrangement, as opposed to starting anew with a brand new organisation, was the gas utility’s experience of domestic billing. This argument was rendered moot when the gas retail division, along with the Bord Gáis name, was sold off to the private sector in 2014 to reduce the national debt burden (and pay off those European investors), with encouragement from the troika. Given this precedent it was hardly surprising that eventual water privatisation would rear its head as an ultimate goal.

As it was Irish Water was established as a state owned entity, now a subsidiary of Ervia (the renamed state owned part of Bord Gáis), and appointed former Dublin City Manager and career civil servant John Tierney as Managing Director. In light of the stated ambitious objectives for the reform of the water sector, and the recent history, a top priority should have been making the case to the public for the need for these changes and providing justification for expenditure along the way. Unfortunately, this does not appear to have been prioritised. John Tierney was a controversial appointment as he had presided over the Poolbeg incinerator project on behalf of Dublin City Council. This project had been criticised by the Local Government Audit Service for ineffective controls in the spending of over €95 million of taxpayer’s money.

Setting up a national utility, almost from scratch, would have significant start-up costs. I can certainly empathise with Irish Water management and staff regarding the scale of this challenge. However there was a strong case for transparency when spending this money. The default reaction of Irish Water management was to hide behind commercial confidentiality when questioned on expenditure. While I can understand some confidentiality, especially when encouraging competitive bids from external service providers, complete blanket confidentiality was most unwise. It wouldn’t have been acceptable to a private shareholder, it certainly shouldn’t be acceptable to the Irish taxpayer.

When questioned on national radio on 9th January 2014, Tierney, after first trying to evade the question, stated that €100 million had been spent on start-up costs with about 50% of that on external consultants, with no explanation on what exactly the consultants had been doing. Following this calamitous interview Tierney was brought before the Oireachteas (Parliamentary) Public Accounts Committee after which it emerged that €85 million had been spent on consultancy. Further public relations blunders occurred when Irish Water management claimed they didn’t have bonuses but instead had something called “performance related pay schemes”. Given the immediate history of an excessive bonus culture in the banking industry, whose loses the Irish taxpayer had covered, and the higher echelon of the public sector this not surprisingly did not go down well with the public.

It was in this context that Irish Water attempted to introduce domestic water charges. It will certainly be an interesting case study for future water policy researchers on how not to do things. The Government attempted to entice households to accept water charges though an annual €100 “water conservation grant” they would receive in return for registering with Irish Water. In reality it had nothing to do with water conservation and was quite simply a tax rebate to persuade people to register.

Local grassroots opposition to water charges, and to the installation of domestic metering, eventually manifested itself through 2014 in the form of a national Right to Water movement. History was to repeat itself. Just as a by-election was to prove crucial in the Dublin anti-water charges campaign of the 1990s, so it would prove to be in 2014. Paul Murphy, Joe Higgins’s colleague in the Socialist Party, contested the Dublin South-West by election for the Anti-Austerity Alliance. He successfully managed to make opposition to water charges the issue of the campaign. He was helped by the shambolic manner that Irish Water and the Government had attempted to introduce charging, uncertainty about what the charges would actually be, Government talk about economic recovery when the austerity burden remained high and having a clear unequivocal message of opposition to water charges as an unjust burden on the already stretched Irish taxpayer who had paid enough to cover failed European private investment decisions. This, along with genuine community anger and determined trade union activism, provided the platform for the growth of the Right to Water movement, which held a series of mass attended demonstrations and protests, becoming a formidable political force[5].

The impossibility of achieving the ludicrous timescales of Minister Hogan was confirmed by Eurostat, the statistics office of the European Commission (Hogan had since become Agricultural Commissioner with that body), in their letter of 24th July 2015 to the Irish Central Statistics Office[6]. This caused a big media story in Ireland at the time, with the Government describing the Eurostat view as erroneous, Hogan in his new role staying silent in compliance with his oath to the European Commission, and the Right to Water campaign claiming the Government water strategy was now in tatters. I could scarcely see what the fuss was about. As far as I was concerned Eurostat were merely stating the obvious. Attempts by the Government to placate public hostility by setting low tariffs (including accounting for the €100 “water conservation grant”) and making the utility independent of the state by moving it off the national balance sheet are contradictory objectives. Eurostat quite correctly found that Irish Water is not independent of the state.


The Current Situation

The Government and Irish Water ploughed on until the next general election of 26th February 2016, which resulted in a hung Dáil with Fine Gael still the largest party but with greatly reduced representation and a resurgent Fianna Fáil as the second largest party. During the election campaign Fianna Fáil had pledged to have Irish Water abolished and replaced with some new entity and vacillated between suspension and abolition of water charges.

Sinn Féin were the third largest party and, ever since being out flanked by Paul Murphy TD in the Dublin West by-election, had adopted a more hard-line stance against water charges. They were joined by the Anti-Austerity Alliance, People Before Profit and independent groupings who were unequivocal in their opposition to water charges. This meant that, including Fianna Fáil, a majority of deputies elected to the Dáil (Parliament) were in favour of the immediate removal of water charges.

The Dáil arithmetic eventually resulted in a “Confidence and Supply Arrangement” whereby Fine Gael would continue in Government without a majority. Fianna Fáil would be in opposition but would not bring down the Government, subject to agreed upon arrangements, one of which was the suspension of water charges for an initial nine-month period and the establishment of an Expert Commission to examine the funding of the water sector. Thus water charges were suspended on 1st July 2016.

The Expert Commission delivered its report[7] at the end of November 2016. To briefly summarise, it stated that water charges and metering represented the best practice in funding a water utility. However, due to the lack of political support in Ireland, and the alienation of the Irish people by the multitude of public relations blunders referred to previously, it was not practical to retain them. Funding would revert to central taxation.
What should happen now?

While I firmly believe in water charges I realise the hostility that exists in Ireland to them right now. The recommendations of the Expert Commission might well mean the end of them for the time being. The Commission’s recommendations will now be considered by a Special Oireachtas (Parliamentary) Committee. I do not believe that the challenge of effective water services provision will be solved by abolishing water charges for the third time in recent history.

What I would like to see is more politicians, policy makers and practitioners passionately articulating the need for water charges as being in the Irish taxpayer’s best interest. One of the most singularly unimpressive aspects of the political contribution to this debate is the manner in which the Irish political establishment defers to the European Institutions. I would paraphrase it thus “We have to charge you for water, otherwise the mean people in Europe will be angry and might punish us”. Given the unjust austerity burden imposed from that source I can hardly think of a less persuasive case for water charges. Endless legal arguments about whether or not Ireland is obliged to introduce water charges utterly fail to persuade anybody. The case for water charges exists on its own merits and needs to be articulated. The views of European civil servants should be secondary to that. Indeed a period of silence from them would be welcome.

While there are many legitimate criticisms that have been made of Irish Water, and they should continue to be scrutinised, I must also empathise with their staff working in such an uncertain political arena. In many respects they have gone about their tasks diligently and systematically. They have commenced much needed infrastructure improvements, expanding and upgrading water and wastewater treatment plants, replacing lead pipes and putting in place leakage detection programmes, consolidated asset records from the local authorities (uncovering duplicates and gaps in asset information) and yes, embarked on the metering programme. Consolidating water services in a single national utility organisation remains the right thing to do.

Utility information, education and communication strategies with the public are a good thing. It is a balancing act however as they inevitably cost money. I have empathised with Irish Water staff being accused of patronising the public by telling them things they already know and in the process wasting taxpayer’s money. It is a challenge to get the balance, and especially the tone right. But educating the public on water issues and how they can do their bit is definitely worthwhile.

It is a fundamental law of physics that systems deteriorate naturally over time. Therefore unless money is spent maintaining and upgrading capital infrastructure, it will gradually fall into disrepair. Population growth, changing demographics and more stringent environmental obligations creates the need for new infrastructure. For the time being, and given the politically charged nature of the debate, I cannot see how Irish Water can raise the necessary financing for such infrastructure projects and be independent of the state. Indeed, being such a capital intensive industry, the public utility should be able to take advantage of the state’s ability to borrow money at low interest rates. The Irish people should not be expected to reward private sector lenders for what are very low risk investments. That is a clear lesson from experience in the UK.

Over time, as Irish Water improves its service, I hope that political interference could reduce and the people come to appreciate its service. Eventually Irish Water could be able to operate autonomously of the state, while still being publically owned, similar to the Electricity Supply Board (ESB) whose assets and liabilities do not appear on the national balance sheet. Indeed ESB has a thriving international division which helps other country electricity utilities build capacity and improve service providing a further revenue stream for the exchequer. That Irish Water could in time do something similar would be something worth striving for.

The Right to Water campaign claims victory with the removal of water charges, but the challenge of water services provision remains. It is a job that never stops. A real victory would be a successful national water utility that the Irish people are happy with and proud of.

Making the utility case to the Irish people, and obtaining their support, is not an inconvenience to the job, it is a fundamental part of it. Having said that, I would like to see a complete stop to opportunistic politicians using Irish Water as a stick with which to embarrass the Government of the day. The same poisoned chalice will be theirs to inherit if and when they next get into Government. And let’s stop running to Europe to avoid our responsibilities. This is something we need to resolve ourselves.

[1] Engineers Ireland Available at https://www.engineersireland.ie/EngineersIreland/media/SiteMedia/communications/publications/DeliveringIrelandsWaterServicesforthe21stCentury.pdf?ext=.pdf

[2] Right2WaterEU, available at http://water.ttp.eu/node/45/

[3] Available at http://www.blueplanetproject.net/wordpress/wp-content/uploads/Detroit-HRTW-submission-June-18-2014.pdf

[4] Available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02000L0060-20141120

[5] For an insider account of the Irish Right to Water movement read Brendan Ogle’s From Bended Knee to a New Republic, How the Fight for Water is Changing Ireland (Liffey Publishing, 2016)

[6] Eurostat Available at http://ec.europa.eu/eurostat/documents/1015035/6761701/Advice-2015-IE-Classification-of-Irish-Water-UpdateIII.pdf

[7] Available at https://www.docdroid.net/qxLiz2f/report-of-expert-commission-on-domestic-public-water-services.pdf.html

19 comments :

AM said...

A lengthy and strongly argued piece which TPQ is pleased to carry. The type of case made here is what opponents of water charges - of which I am one - have to overcome. Good that the author asked for it to be carried on TPQ - an acknowledgement of our commitment to the free flow of ideas and the freedom to express them.

Henry JoY said...

The malfeasance of successive governments, of most political organisations and groups a party to the current water debacle is lamentable. Their repeated and consistent failures to develop and implement a sustainable and cost effective water service is a reflection of the dishonesty and immaturity that permeates the southern state. But hey, how can we expect much else from a state that refuses to unpick it own founding myth ... inherently dishonest shibboleth unabashedly represented yet again in this centenary year of the 'Rising'. Lies perpetuated ad nauseam.

How can we expect maturity or honesty from either citizens or leaders given such adherence? How can we expect rational reasoning about such important matters when the collective national psyche is so screwed and twisted?

Water, like debt, will eventually be paid for by someone. Denying to oneself that one isn't or won't be that 'someone' is akin to a form of death denial. If viable measurement isn't achieved neither will effective management of delivery systems and costs. The longer the delay the greater the bills accruing.

Though I doubt his opinions will hold much sway with the roaring hoards, at least not in the immediacy I complement Mr. Dalton's well reasoned and well presented article.

larry hughes said...

I think the problem with the water charges is endless austerity, criminal bankers and political leaders who are still filling their own pockets while people see no light at the end of the tunnel a decade on. EU money wasted for decades and hospitals and public services neglected to the point of threatened privatisation. Why was EU money not used for water infrastructure upgrading? It is illegal now to bore your own well or catch rain water for personal usage. I also find it interesting we are being lectured from Bahrain while we sit looking out at Irish Rain on a daily basis. Just like Desmond the tax dodger has his company putting in internet broadband to all our housing estates at the moment. Big changes coming here at home for certain and Irish Water is way down the list!

Christy Walsh said...

Joe

"My own preference is for an effective public utility."

Who is in disagreement with that? It is the view of everyone whom I know.

Having given a brief political historical account of why IW is dysfunctional you then go on to shift blame onto peolple's fear of privatisation as, "a very weak argument that keeps water services dysfunctional just to guarantee that there will be no privatisation." So now it is the peoples fault for being concerned or distrustful of the politicians for creating the mess in the first case.

Throughout you confuse 'tariffs' and 'taxes' to mean different things when they both mean essentially the same thing -making the public pay for public services. This is maybe the biggest weakness of your argument because nobody is under any misconception that the problems with IW water services needs immediate public funds to solve the problem.

Government's approach from the outset was to eventually establish privatised services and people have disrupted those attempts and are now trying to ensure that Irish water services are safe from privatisation -none of this in anyway is contrary an effective public utility which you seem to suggest.

DaithiD said...

"...Making Public Enterprises Work: From Despair to Promise: A Turnaround Account (IWA Publishing, 2009) has become a classic among global water practitioners. It is a truly inspirational read and comes highly recommended..."

I loved Alan Partridge for lines like that, i really really mean it as a compliment. I like the detail in the peice, on an otherwise emotive topic.

Joe Dalton said...

Christy,

As you point out there are some who want to privatise. I'm just making the point that I am not among them. Though I do see merit in the private sector providing services and expertise to the water sector, I am in favour of public control.

I think there has been fault all round in the sector but the primary fault is political. For example Phil Hogan, after he had joined the European Commission, defended his role stating that he was just doing what was required under the troika. By this logic if the troika had told him to privatise he would have tried to do so regardless of what was in the interests of the country. The people are right to be mistrustful of such a person.

Tariffs and taxes just signify the method of funding. They are two of the three Ts in OECD jargon, along with transfers (which usually refer to multilateral funding of water services in developing countries). I think we all agree that water services need substantial funding. The argument of the Right2Water campaign would be that all that was required was for more taxpayer's money to be pumped into water services under the previous regime. I believe this would have been inefficient and a recipe for the squandering of taxpayers money.

My point is that having a utility operating on a commercial basis, while still publicly owned, would be more effective and provide more value for money to the taxpayer/rate payer than funding solely through taxation. Having to worry about whether budgets for essential services will be approved by the next government is an engineer's nightmare.

I have no problem with opposing privatisation. The politicians now fear people power and that is a good thing. I believe there were some in Government who wanted to have option to privatise but wouldn't think the view was universal. Some of them probably didn't know what they wanted and were making it up as they went along or doing what they thought the troika wanted.

I think the opposition to privatisation has gone too far in that what I would regard as good engineering practice is considered a sinister step towards privatisation. I do think the current trajectory is a recipe for inefficient water services in Ireland for the foreseeable future. This is both an embarrassment and a tragedy.

Christy Walsh said...

Joe

I took you too literally on privatisation. I follow all that you say -and would agree that simply increasing budgets is not enough but a full structural rework of all water networks is crucial. The politicians created an additional financial burden by trying to force through a metering system without any idea of what sort of end result would be left in place -the whole thing has been ill-conceived.

Privatisation can reduce costs but that does not mean it is better for the country -for instance I would not support privatsation of the bus services but can see that could save some money in the short term. Same thing with water it should be a nationlised service in public hands.

Joe Dalton said...

Thanks for the comment Christy. The politicians tried to force through two decades of change in two years. That was practically guaranteed to fail. Glad you agree that simply pumping money in isn't enough on its own. The challenge is to ensure that all money pumped in is spent wisely and adds value.

Daithi,
Yes I do remember that line from Alan Partridge. I suppose I walked into that one.

Larry,
I completely share the sense of injustice of having the Irish taxpayer cover the losses of Irish and European private bankers. That a consequence of this was a ham-fisted attempt to reform the water sector is all the more frustrating. In terms of me lecturing you from Bahrain, trust me there is no comparison between me and Mr Desmond. There are literally thousands of Irish people of all ages living and working in this region.

Henry Joy,
Thanks for the kind comment.

And thanks again to Anthony for publishing my article which goes against most coverage on TPQ on this issue. It shows that this website is a great source of open discussion and debate.

Mavis Davis said...

The WFD does not introduce or compel individualised water pricing.

Rather it recommends that pricing practices already established at the time of writing, 2000, shall, by 2010, be sectorally proportionate and transparent and should incentivise conservation )as opposed to gouging domestic users in a vacuum).

The proposed charging regime in Ireland, focusing purely on household charging and consumption, in complete isolation of other sectoral usage, contravenes rather than complies with the WFD.

Secondly, Ireland, a country supposedly "out of step" with every other country which charges for domestic water, has a significantly lower personal consumption rate than countries which do charge for water.

http://www.newstalk.com/Average-Irish-person-uses-half-the-water-previously-estimated-says-Irish-Water


It would be ironic if subsequent to the introduction of any domestic charges our personal consumption rose, to be more in line with the "other countries ".




Joe Dalton said...

Mavis,

I am not a lawyer but am more persuaded by the legal interpretation of the Water Framework Directive by the anti-water charges campaigners than that of the establishment politicians. My point is that I believe the arguments for or against water charges should be made on their merits for the country, not on what we think the European Commission obliges or doesn’t oblige us to do. I think their interventions in this debate have been unhelpful and undemocratic. Indeed, their arrogant approach is why the EU is in the mess that it is.

Ireland has had commercial water charging for many years but as highlighted by the Expert Commission Report the commercial charging regime hasn’t been consolidated meaning we still have 34 separate commercial charging regimes. It also highlighted almost 50% non-payment of commercial water bills, which was lower than payment levels for domestic bills despite all the controversy. Sorting this out should be a top priority.

There is no supposedly about it, Ireland is out of step with the developing and developed world in not having water charges. The claim that Ireland has lower per capita usage than countries that charge for water is a claim that Ireland has the lowest per capita usage of water in the World. What evidence we have for this claim is based on data collected from domestic meters that were recently installed. Bearing in mind that meters have been in place for a relatively short time, that large sections of the country resisted meter installations and that customer usage typically reduces following meter installation, when they know they are being measured after which it reverts back to normal, I don’t think the evidence is strong enough to assert it confidently. But regardless of all this the argument for metering should never have been focused on conservation. It should have been on equitably charging for water and increasing knowledge of water usage, losses and distribution patterns in the network.

Mavis Davis said...

The initial Water Consumption Project published by Irish Water (again focusing solely on domestic consumption) returned a 111 litres per person consumption rate, a figure officially accepted by the CER/ Government for the initial charges plan.

That was from an initial survey of less than 2000 survey participants.

The later 80 litres ppps figure was determined by ongoing analysis from 780,000 meters.




"The figure for domestic water usage for July 2016 258 litres per day, which is the most up to date data that is available, as our meter teams collate and process readings on a quarterly basis to track usage through our metering programme.

We are now collecting readings from over 780,000 homes, and usage in the 93% of homes without leaks has remained at an average of 250 litres over the last 18 months, with a slight seasonal variation of + / - 5% on the average. It has gone up a little in the summer and down again in the winter but within a very narrow range. The usage is not published in a specific document but is used to inform many elements of Irish Water's work."

http://touch.boards.ie/thread/2057647655/1/#post101916476

Talk to Irish Water, on social media.

More like pulling teeth with Irish Water; )






Joe Dalton said...

Mavis,

Given the absence of data in Ireland until recently due to lack of metering, using an initial survey combined with international data was a reasonable approach to estimate water consumption in Ireland. The evidence collected from the meters installed suggests that usage is less than what was thought and that therefore network leakage may be higher. This illustrates perfectly a benefit of domestic meters – improved knowledge of the usage and water loss patterns in the network and the facilitating of the correct strategy to be put in place to deal with it. I would love for this to be acknowledged by the anti-water charges campaigners.

larry hughes said...

Joe Dalton

I think the contempt and timing of water charges was the last straw. As for you being in the Middle East, MORE POWER TO YOU. If I had a relevant skill set I would be two steps ahead, never mind behind you in that regard. Hope 2017 is a healthy and prosperous one for you and all our fellow Irishmen and women there for employment.

Joe Dalton said...

Thanks Larry. Yes I totally agree the timing and manner that they were brought in was the last straw for many people. Very frustrating for someone like me. I wish the people had gotten angry over something I could have supported, like opposition to the bank bailout.

To give you an idea of how many Irish are out here have a look at footage from the Bahrain Gaelic Games held in October.

https://www.youtube.com/watch?v=W9YesihVk8M

larry hughes said...

Joe Dalton

Bloody hell, ask around there if anyone needs a cleaner and/or general dog's body.

Mavis Davis said...

This illustrates perfectly a benefit of domestic meters – improved knowledge of the usage and water loss patterns in the network and the facilitating of the correct strategy to be put in place to deal with it."

Domestic meters are of no benefit in identifying water loss patterns in the network, district meters do that job.

We have yet to be given a cost benefit analysis on the decision to spend €.57bn on domestic meters.

They need to be financed, maintained, read and ultimately replaced.

All at a cost, for a benefit that no one can demonstrate.

A 10% reduction in domestic consumption delivers nothing in terms of cost reduction.

In fact if we were to eliminate domestic consumption entirely we'd drop overall consumption by just 23%.

We are mistakenly (as happens when water utilities call the shots) being conditioned to think that the domestic sector is using all the water.

The CER has this week suggested that metering should be "parked", presumably on "economic" grounds.

A little late in the day to be raising concerns if you ask me!

Joe Dalton said...

Mavis,

District metering plays a very important role in localising water losses which I am glad you recognise. But I can assure you that domestic metering plays its part as well. There are on average about 1,500 connections in a typical District Metered Area. The difference between district and customer metering constitutes the volume of water lost.

No domestic meters mean allowances have to be made for different categories of property. Usage patterns vary seasonally as well as for various other reasons. Some properties may be unoccupied or have varying levels of residency. Domestic metering reduces this uncertainty and increases confidence in the water loss calculations. It also provides useful information on usage patterns which can assist the planning of future water infrastructure requirements. As I have said all along conservation should never have been the primary argument for having them.

You are right that they are costly. That is why it was such an act of short-sighted negligence that the cost of installation was not put on the private developers during the construction boom of the so called “Celtic Tiger”. We would have been well on the way to a high level of domestic metering which would have reduced the current financial burden.

The CER did indeed recommend the “parking” of domestic meter installations in light of possible policy changes following the Expert Commission Report. I would agree with them only in as far as there are some issues that are higher priority, such as dealing with critical water quality issues and environmental discharge risks. In the case of limited funding, issues like these should take priority over domestic metering. But that doesn’t change the clear desirability of having universal metering if it can be achieved.

I totally agree with the importance of highlighting commercial usage. It is a total farce that so far the Chair of the Oireachtas Committee on Water Services has sought to block scrutiny of this aspect of water funding.

Mavis Davis said...

The thing about universal metering is that those proposing it can't demonstrate the value of what they're supposed to be saving in terms of costs of producing water they're allegedly saving.

They're always on the back foot.

Remember, no other water utility company has ever been given tax payer funding to purchase water meters on the premise that they're necessary for finding leaks.

They're not, and what they've "saved" is miniscule in the grand scheme of the scale of things.

Joe Dalton said...

Mavis,

Have you been following proceedings of the Oireachtas Committee on water? Thanks to the domestic meters a total of 28,000 leaks have been repaired so far within household boundaries, equating to a saving of 77 million litres of water a day. Certainly not a miniscule amount. And with more savings to come.