For most of my adult life I have paid for water, so I value it as a resource. I have no objection to the principle of paying for water, but I am opposed to the Irish Water model that the Government has imposed on this country by legislation. It was rammed through the House at the latter end of the previous session.
I also believe in the importance of local democracy and the principle of subsidiarity, so I am opposed to stripping this function from local authorities. This action in itself has created an issue of accountability for the public. It has certainly damaged the perception of the acceptance of water charges across the country. As the Minister of State responsible for the NewEra project, I am sure that Deputy O’Dowd will agree with what I am going to say. In any venture of this kind, trust in the fairness of how it was established is essential for securing public support. However, recent events have damaged public confidence in Irish Water.
I have multiple concerns about this legislation and its implications. I wish to focus on the tendering process for the treatment of waste water. My concerns arise as a consequence of disturbing representations that were made to my office during the winter holidays. Contractors who have contacted me were too nervous to contact Government Deputies about their concerns with respect to the success of the tendering process. They raised matters with me that they felt they were unable to raise with the Department or with local Government Deputies.
The Minister of State may be aware of the multiple supplier framework provision of waste water management. It specifically laid out the conditions that would have to be met by contractors who wished to tender to provide services. Those tendering services were clearly set out by the environmental impairment liability insurance scheme, and a motor insurance scheme to a maximum indemnity of €6.5 million.
The Minister of State also knows that an online question and answer section existed, and that the only means in which an applicant was permitted to submit a query was online. All tenderers later had it clarified that the insurance would have to be in place first, prior to the tender being considered and the application being submitted.
It is a fact we can verify with documentation. Applicants had to incur considerable expense in putting in place the insurance. Up to €60,000 was required from financial institutions prior to Christmas to meet the upfront cost of meeting the tender requirements. It is important for the Minister of State to note that many contractors were put off applying because of this upfront cost.
The Minister of State will be aware that the deadline for submission of tenders was 29 November. Two weeks later, contractors received correspondence confirming that the insurance requirements had to be in place and that they had to revalidate that affirmation. On 18 December, a communication was issued that indicated that the requirement for the Environmental Impairment Liability Insurance was to be dropped. Furthermore, the maximum indemnity limit for the motor insurance was to be reduced from €6.5 million to €1.3 million. Four days later, a communication indicating the successful tenders to be designated for consideration was issued. I find this timeline curious and have a number of questions for the Minister of State with respect to the decisions made. Why were the changes made? The Minister of State will have heard the Latin phrase Cui bono? Who benefited from those changes to the tender process? What company, which failed the original criteria, was successful following the changes that were made in Irish Water? How many potential tenderers decided not to participate because of the onerous insurance requirements set out on 18 December? How many of them decided not to proceed with the tender process because they could not secure the capital to secure the insurance premiums?
I cannot answer the foregoing questions but I am sure that the likely beneficiaries of any changes were companies that relied entirely on subcontractors to provide their services and who failed to satisfy the original criteria of the tender. Oddly enough, there is only one company that fulfils the nature of that characteristic. Coincidentally, one of its former managers is now responsible in Ernst & Young for the tender process we are now discussing. There has been much talk about the critical importance of securing public trust. I would be grateful if the Minister of State would comment tonight on the oddity that a consultant that has been provided for from the €50 million being bandied about is formerly of an operator who is uniquely in a position to fulfil the criteria that was amended within the timeline set out and is now in fact the consultant who works in Ernst & Young and makes the decisions on these contracts.