Report reveals Irish Water consultancy overspend

Sunday 12 January 2014 22.09
1 of 2
The Oireachtas Environment Committee is set to quiz Irish Water over consultants' fees
The Oireachtas Environment Committee is set to quiz Irish Water over consultants' fees
John Tierney revealed last week that €50m had been spent on consultants during Irish Water's set-up phase
John Tierney revealed last week that €50m had been spent on consultants during Irish Water's set-up phase

A confidential report obtained by RTÉ's This Week shows the Government expected Irish Water would be established using Bord Gáis' "existing operational capacity" in the specific areas of IT, asset management, customer billing systems, and other key functions.

The unpublished 20-page report, which was drawn up in September 2012, sets out how Irish Water would be implemented over the following five years as a subsidiary of the Bord Gáis Group.

However, it makes no reference to any use of external consultants to create or operate key IT or other systems.

It went on to declare the current Government's "determination" that the use of such existing capacities in the State sector was a central element of any new functions being taken on by public bodies.

Irish Water boss John Tierney last week revealed the agency has spent €50m on consultants during the agency's set up phase.

Lucrative contracts were awarded to consultants including IBM, Accenture, and Oracle, it emerged.

The unpublished report marked “confidential” was drawn up by the Irish Water Consultancy Group, the inter-agency group set up by the Government, which included the Department of Environment, Bord Gáis, and local authority employee unions.

The IWCG also had a remit to report on progress directly to the Minister for the Environment Phil Hogan.

The report, which is a roadmap for the implementation of Irish Water, was created just six months after the Government decided to create Irish Water as a subsidiary of Bord Gáis.

The report sets out how the Government anticipated at that time that Bord Gáis "will support the establishment and operation of Irish Water through leveraging existing operational capacity in areas such as asset management, capital programme delivery, networks management, customer service and billing, finance, IT".

"The Bord Gáis Group has ... specific skills from its own experience of transformation, customer relations, network management, metering and utility operation that can be deployed to assist in the successful establishment and operation of Irish Water," according to the report.

"The approach also reflects the Government's determination to use capacity and competencies that exist in the State sector in undertaking new functions," the report states.

However according to tender documents published on the European tendering system, the Official Journal of the European Union, the services that Irish Water has acquired from external consultants includes asset management services, customer services, and other IT functions.

The tenders were advertised by Bord Gáis just months after the Government's decision to place Irish Water under their remit and the contracts were awarded in late 2012 and early 2013, with Irish Water saying that these mostly went to the major companies that it has named - IBM, Accenture and Oracle.

Mr Hogan has said the money spent would be examined by the Commission for Energy Regulation when it assesses Irish Water's submission on water prices shortly.

Meanwhile, the Oireachtas Environment Committee said it will quiz Irish Water over the amount spent on consultants when they appear before the committee on Tuesday.

Chairman of the committee Michael McCarthy said Irish Water will have to explain the spending of €50m.

Speaking on the This Week programme, Mr McCarthy said the meeting between representatives of Irish Water and the Oireachtas Environment Committee next Tuesday should show accountability and transparency.

"I think it's reasonable to assume that given the fact that Bord Gáis were very much the midwife of Uisce Éireann that the resources and capacity that they had would, in so far as practicable, facilitate the creation of Irish Water.

"That's the purpose of Tuesday's meeting to find out, once that's the reasonable assumption, why then do you spend money on consultants?

Keywords: irish water