Major investment projects needed to position the economy to take advantage of an economic recovery and protect vital public services now face being held hostage because of the Government’s botched handling of Irish Water.

Minister Howlin is now warning that funding for the health service, new schools and housing could be seriously impacted if the funding of Irish Water must continue to be shouldered on the State’s books.

Fianna Fáil Spokesperson on Environment Barry Cowen has said the case for retaining Irish Water is draining away every day. Deputy Cowen commented: “The fact that major investment projects expected in housing, health and education in the coming years now hang in the balance because Fine Gael and Labour want to retain Irish Water is indefensible .This failed political project from Fine Gael is threatening to undermine key frontline public services without improving water infrastructure at all.

“The warning from the Department of Public Expenditure and Reform on the continued financing for Irish Water means that the €5.5bn planned investment by Irish Water is no longer guaranteed and instead poses a clear and substantial risk to other investments needed in the economy.

“Despite this enormous taxpayer funds given to Irish Water by the Government this year it will spend less than €300m on fixing water infrastructure in 2015, compared to €500m in 2010 under Fianna Fáil. To put this into perspective, this year alone 33% of all motor tax receipts collected will go towards establishing Irish Water. This is on top of €850m that the super quango has borrowed, €540m of which is being spent on installing water meters that will not be used.

“How can Ministers credibly say the Eurostat decision on Irish Water will have no impact on budgetary policy? That is a disgracefully dismissive and arrogant attitude to take. Fianna Fáil wants to put in place a major capital investment programme over 13 years from 2015 to meet targets on water quality and leaks. This will be funded through a mix of Strategic Investment Funds, private bond issues, the European Investment Bank and general taxation. But instead an estimated €1.08bn has been diverted from general taxation to the subvention of Irish Water to date and not an extra cent of this is being invested in infrastructure over and above what was already planned.

“The Government needs to come clean with the public. Fine Gael and Labour need to admit they really don’t know what the full extent of the Eurostat decision will be on the spending plans in the forthcoming budgets or what impact there will be on public services because we now have to shoulder the burden of their bogus super quango while trying to invest in health, education and housing.”