Failure to pass Eurostat test sinks Irish Water’s plan – Cowen

Fianna Fáil Spokesperson on Environment and Local Government Barry Cowen TD has cast serious doubt over the viability of the business plan outlined by Irish Water today.

Deputy Cowen commented, “Today’s plan is a complete fiction. There are two huge holes in it. Firstly the failure of the Eurostat test has undermined its ability to borrow on the open market and secondly the abysmally low compliance rate has undermined the company’s projected revenue stream. The Eurostat test exposed Irish Water for what it is, a part of the government. Failing that test, which was the main reason Irish Water was set up in the first place, completely undermines today’s plans.

“While the government is able to borrow money at just over 1% Irish Water on the other hand will be forced to pay far higher rates. It simply will not be able to borrow money cheaply to fund its €5.5bn plan. This raises the fundamental question as to why Irish Water was set up in the first place.

“In addition the low compliance rate scuppers the €2bn payment projection that forms the basis of their future funding. They claim an 80% compliance rate while in reality payment rates are currently 51% or €1.3bn. However even this ignores the costs of billing, the water grant and water meter financing.

“In total, after all the furore water charges will make the government a net €10m over the course of a year. Over the course of seven years the government will make a new profit of €70m. The only reason it may actually make that amount is because of the extremely low take up of the government’s complicated Water Grant Scheme which elderly people in particular are struggling to access. Irish Water has run out of ground with its accountancy tricks and the reality of delivering its €5.5bn investment is in serious doubt.

“The loss of 1,200 jobs at Irish Water a time when others will receive bonuses exposes something rotten at the heart of the super quango. Despite all the government’s promises bonus payments will be issued to Irish water staff. All the while 1,200 workers across the country will lose out. Today’s announcement is another reminder of why its time to stop throwing good money after bad and call a halt to the Irish Water super quango.

“We need proper investment in our water network. However Irish Water is not the answer considering it will not spend an extra cent above the €550m spent by Fianna Fáil on the water infrastructure.”