Irish Water facing into two days of committee questioning

Tuesday 14 January 2014 22.16
Irish Water will be asked to explain its €50m spend
Irish Water will be asked to explain its €50m spend

Just 14 days after Irish Water officially took over responsibility for the country's water services, executives will face their first round of questioning from politicians about how they spent €50m in consultancy fees.

By Political Correspondent Martina Fitzgerald


At 2.15pm in committee room four tomorrow, members of the Joint Committee on Environment, Culture and Gaeltacht will each take their turn and their time to probe the expenditure, which has raised concerns and eyebrows inside and outside of Leinster House.

On Wednesday evening, management at Irish Water will have their second outing in Leinster House when they will appear before the Public Accounts Committee. Representatives of the Commission on Energy Regulation will also attend.

For most politicians, how this controversy has emerged is equally surprising and a source of some annoyance to say the least.

Leinster House was quiet last week; there were more journalists than politicians roaming the corridors (as the Dáil returns this week). Then the first political controversy of 2014 erupted last Thursday morning.

Irish Water Chief Executive John Tierney was being interviewed on RTÉ's Today with Sean O'Rourke and was asked about the costs of setting up the utility; a question many politicians say they had previously asked.

Since then Mr Tierney's answer has dominated newspaper headlines and radio and TV news bulletins. And the political reaction was swift and from all sides. Fianna Fáil said it was "scandalous", Sinn Féin called it a "national scandal" and the Tánaiste said he "trusts Irish Water will be able to demonstrate that it represents value for money". And it just grew from there.

Irish Water has issued numerous statements indicating that the fees were on short-term specialist services, the majority of the costs included IT, billing and customer services, financial management etc. They also pointed out that Irish Water would save €2bn by 2021. But pressed further to give a breakdown of the fees on Friday, an Irish Water spokesperson said it was "commercially sensitive".

The reply has not and will not travel well if repeated at the environment committee.

Since then, Irish Water has issued a statement saying "the maximum amount of detail will be disclosed to the Oireachtas Committee on Tuesday but Irish Water will have to have due regard for any commercially sensitive information".

The political reality is that Irish Water executives are going to have to give a lot more details on how they managed to spend that €50m at the committee meeting. They will face further questions to list all the companies involved: Were there any overruns? What oversights are in place regarding this expenditure? And should and could this work have been done without consultants at all?

This is sure to be probed after an unpublished report obtained by RTÉ's This Week pointed out that Irish Water would be set up using Bord Gáis' "existing operational capacity". It pointed to the specific areas of IT, asset management, customer billing systems, and other key functions.

Irish Water will also face questions about its future budget on consultants and the level of political and regulatory oversight, ie Irish Water's relationship with the relevant ministers.

Minister for the Environment Phil Hogan and junior minister Fergus O'Dowd have both said they did not know that €50m was spent on consultancy fees.

Irish Water's relationship with the energy regulator, which is tasked with reviewing the body's expenditure, is also likely to come under scrutiny. Minister of State Fergus O'Dowd has said the regulator decides what costs can be legitimately considered for inclusion in the water charges. So what if the costs were not legitimate?

But while members of the environment and public accounts committees will get an opportunity to probe Irish Water executives, Fianna Fáil has tabled a private members' motion this week for Irish Water to come under the Freedom of information Act.

The FOI bill is currently awaiting report stage in the Dáil and Minister Brendan Howlin has promised to bring it under the act "as soon as is practicable".