Irish households and businesses will pay €500 million a year in water charges within two years despite the installation of water meters in fewer than half the 1.3 million eligible properties by then.
The information about the expected revenue from water charges was disclosed by the Government to the “troika” of international lenders – the European Central Bank, European Union and International Monetary Fund (IMF) – late last year and is referred to in the IMF’s latest staff report.
The news came as it was announced yesterday that Dublin city manager John Tierney will become the new managing director of Irish Water, the utility company that will take over the running of water services from 34 local authorities. Dr Tierney, a native of Tipperary, has been in his current position for six years and will be paid a salary of €200,000 a year.
Bord Gáis subsidiary
Irish Water is to be a subsidiary of Bord Gáis and Mr Tierney will report to a new chief executive expected to be announced in the next week.
With businesses already paying €200 million a year in water charges – although there are shortfalls in collections – it raises the prospect of householders paying as much as the €100 annual household charge from next year, with the vast majority based on an “assessed” charge because of the absence of water meters.
This gives rise to the possibility of protests and boycotts similar to those surrounding the household charge last year.
However, Minister of State at the Department of Environment Fergus O’Dowd, who has responsibility for Irish Water, has insisted the experience around the household charge will not be repeated.
He told The Irish Times there would not be a flat charge. “There will be an assessed charge that is fair and transparent until water meters come in.”
It is believed it will be based on average use but the final figure will be decided by the regulator, the Commission for Energy Regulation.
Charging mechanism
Irish Water is expected to have a charging mechanism in place by January 2014, by which time only about 160,000 of the 1.3 million properties will have been metered. However, as a political expedient the Government may delay the introduction of charges until the middle of next year to soften the impact, as they have done with the property tax.
In its latest staff paper, the European Commission has been critical of the progress. It has said the implementation of the water reform strategy has so far been slow.
“Concrete steps have been taken slowly. Among other things, progress towards the installation of water meters has lagged,” is said.
“The full roll-out of meters is likely to take years and extend well beyond the scheduled date for the introduction of water charges, which will create additional difficulties regarding the pricing mechanism.”
Mr O’Dowd challenged this view, saying installation would begin in July and proceed at a rate of 27,000 water meters per month with the project completed within three years.
