Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/678345
UTILITY WEEK | 13TH - 19TH MAY 2016 | 23 Operations & Assets Analysis S ince national utility Irish Water (IW) was formed on 1 January 2014 it has, with 31 local authorities in Ireland, begun a programme of work that could trans- form Ireland's water services into a system fit to support a growing modern economy. But it has a problem: the attempt to intro- duce the customer charges necessary to sup- port this transformation was botched. With water charging at the centre of a row dominating Irish politics, Utility Week Intel- ligence has produced an in-depth report, Water in Ireland: The Outlook for Investment in Mapping and Modernising Ireland's Water Services, looking at the country's water sector. Although water professionals are beaver- ing away to establish the basis for a sustain- able, secure, and cost-efficient water supply, the people of Ireland have not bought into the project. Many people never registered with IW's new billing system, and those who did have in some cases paid inconsistently or only partially. In October 2014, more than 50,000 people marched in Dublin against water charges – it was one of the largest political protests in the country for many years. By the final quarter of 2015, the third quarterly period for which IW issued a bill, only 61 per cent of 1.52 million water custom- ers paid up, raising revenue of €42.3 million. Details of payments in the first quarter of 2016 are yet to be released, and rumour has it the delay in publication may reflect a fall in the number who have paid. If true, it is undoubtedly the result of political uncertainty over the organisation's future. The call to abolish water charges was adopted by politicians campaigning for votes in the country's general election of February 2016, and the issue is now being kicked around in post-election negotiations between the two main parties. The biggest party, Fine Gael, wants to keep IW and water charges, but the second largest, Fianna Fáil, would prefer to abolish the organisation, a manifesto position on which many of its 44 MPs to the Dail were elected. A tentative agreement has been reached to turn IW from a semi-state body into a full state agency, and to suspend water charges until a new consumption-based system of charging is introduced. It is estimated that once concessions for the elderly and welfare recipients are factored in, only 60 per cent of households will pay water charges. Tom Collins, chair of the Public Water Forum, a customer panel set up in 2015 with a view to improving the quality of public engagement on charging, believes a signifi- cant shi in attitudes is needed before a sta- ble payment system can be established. "People think they've already paid in their taxes. They don't relate to IW as cus- tomers, and there is concern over the threat of privatisation of water services. I have been surprised by the depth and intensity of feel- ing out there. It has been a very poorly struc- tured dialogue." So what model might emerge to take for- ward the work of upgrading Ireland's water services? Water in Ireland We present an executive summary of the latest report from our premium information service, Utility Week Intelligence, looking at Ireland's attempts to modernise and finance its water sector. IRISH WATER PLANNED RESTRUCTURE AND STAFF CUTS n Payroll €370 million, 33 per cent n Contracting €170 million, 15 per cent n Consumables €150 million, 14 per cent n Overheads €160 million, 14 per cent n Cost of repairs and maintenance €260 million, 24 per cent © Utility Week Intelligence | Windsor Court, Wood Street, East Grinstead, West Sussex, RH19 1UZ | +44 (0)1342 332000 | www.utilityweekintelligence.co.uk S ince national utility Irish Water (IW) was formed on 1 January 2014 it has, with 31 local authorities in Ireland, begun a programme of work that could transform Ireland's water services into a system fit to support a growing modern economy. But it has a problem: the attempt to introduce the customer charges necessary to support this transformation was botched. Although water professionals are bea ver ing away to establish the basis for a sustainable, secure, and costefficient water supply, the people of Ireland have not bought into the project. Many people never registered with IW's new billing system, and those who did have in some cases paid inconsistently or only partially. In October 2014, more than 50,000 people marched in Dublin against water charges – it was one of the largest political protests in the country for many years. By the final quarter of 2015, the third quarterly period for which IW issued a bill, only 61 per cent of 1.52 million water customers paid up, raising revenue of €42.3 million (see box). Details of payments in the first quarter of 2016 are yet to be released, and rumour has it the delay in publication may reflect a fall in the number who have paid. If true, it is undoubtedly a result of political uncertainty over the organisation's future. The call to abolish water charges was adopted by politicians campaigning for votes Water in Ireland: The outlook for investment in mapping and modernising Ireland's water services MAY 2016 in the country's general election of February 2016, and the issue is now being kicked around in postelection negotiations between the two main parties. The biggest party, Fine Gail, wants to keep IW and water charges, but the second largest, Fine Fáil, would prefer to abolish the organisation, a manifesto position on which many of its 44 Teachtaí Dála (TDs) were elected. A tentative agreement has been reached to turn IW from a semistate body into a full state agency, and to suspend water charges until a new consumptionbased system of charging is introduced. It's estimated that once concessions for the elderly and welfare recipients are factored in, only 60 per cent of households will pay water charges. Tom Collins, chair of the Public Water Forum, a customer panel set up in 2015 with a view to improving the quality of public engagement on charging, believes a significant shi™ in attitudes is needed before a stable payment system can be established. "People think they've already paid in their taxes, they don't relate to IW as customers, and there is concern over the threat of privatisation of water services. I have been surprised by the depth and intensity of feeling out there. It has been a very poorly structured dialogue." So what model might emerge to take forward the work of upgrading Ireland's water services? WATER CHARGES COLLECTED BY IRISH WATER Quarter sum collected % of customers paying Q4 2015 €42.3m 61% Q3 2015 €38m 55% Q2 2015 €30.5m 44% WATER IN IRELAND — THE BIG NUMBERS 625 Irish Water staff 3 , 900 Local authority water workers 1.52m Water customers Utility Week Intelligence members are able to download the full report by visiting: i.utilityweekintelligence.co.uk/ Ireland's water challenge, as at 1 Janu- ary 2014 (improvement as of April 2016) • 49 per cent of drinking water never makes it to the taps (47 per cent); • 33 per cent of water lost through customer- side leakage; • 75 per cent of sewer network needs fixing • Dublin had less than 2 per cent spare capac- ity (10 per cent); • 23,000 people on boil water notices (3,000) • 121 water treatment plants at risk of quality failure; • 472 drinking water plants fail World Health Organisation water safety risk tests; This article provides a snapshot of the Water in Ireland report. To access it in full, simply log into you Utility Week Intelligence account. For more information on Utility Week Intel- ligence, including a free trial promotion, con- tact Peter Bissell, Utility Week membership, on +44 (0)1342 332057 or email peterbis- sell@utilityweek.co.uk.