A heated row has broken out between the Central Statistics Office and Eurostat over the EU agency's ruling on Irish Water.
The CSO alleged there were a number of factual inaccuracies in the Eurostat report which said the utility company must remain on the Government’s balance sheet.
In a letter, it claims Eurostat “exaggerated” the role of local authorities in its findings and did not consider the Commission for Energy Regulation’s influence in determining the price paid for water.
The correspondence, according to a source, questions “much of the rationale” of Eurostat’s decision.
In a stark assessment issued on Tuesday, the EU agency ruled Irish Water must remain on the Government books after it failed the market corporation test.
The ruling said Irish Water was an entity considerably controlled by Government and should be classified as such.
Control
Minister for the Environment
Alan Kelly
said he fundamentally disagreed and would be seeking a review at the earliest opportunity.
“This ruling from Eurostat is not written in stone,” he claimed. “We will carefully review the issues raised, as will the CSO.”
The Eurostat decision is a huge blow to the Government and could jeopardise the distribution of the €100 water conservation grant.
A Government spokesman insisted this would proceed as planned and said householders would be written to over the coming months.
The Coalition insisted there would be no budgetary effect or changes to water charges paid by customers.
In its long-awaited ruling which will be published in full on Thursday, Eurostat said the Government had “considerable control” over Irish Water, in particular over appointments to the board and its operation.
It said there was significant and continuous Government support in the form of grants and operational funds.
Eurostat also raised concern about the decision to introduce a price cap for domestic water charges. It said 70 per cent of households would be “protected” by the capping of fees and there was a lack of “economically significant prices”.
The ruling went on to question the failure of the company to raise more than half of its income from non-government sources.
Charges
Minister for Finance
Michael Noonan
confirmed the national debt and GDP ratio would be affected by the decision. “Of course the Government would prefer it was off balance sheet and it would be a good political announcement.
“But because it has no adverse budgetary effects, I still have €1.2 billion-€1.5 billion for increased expenditure and tax reductions. That doesn’t change.”
However, Opposition parties called on the Government to abolish Irish Water and scrap the introduction of charges. Fianna Fáil's Barry Cowen said it was a damning indictment of Government policy. Sinn Féin leader Gerry Adams said the ruling would lead to the scrapping of the conservation grant.
