Uisce Éireann has warned that if the River Liffey is ever polluted, "85% of the water into the greater Dublin area would be gone".
Executives from the water services utility are appearing before the Oireachtas Committee on Infrastructure and National Development Plan Delivery.
Seán Laffey, Asset Management and Sustainability Director with the utility, warned of an overreliance on water from Dublin's main river.
He said that Uisce Éireann takes 40% of the flow in the Liffey into its pipes every year and 85% of the greater Dublin area water comes from Liffey.
"If anything ever happened to the Liffey, a pollution incident, 85% of the water into the greater Dublin area would be gone. That's the issue, it's about resilience," he said.
Fine Gael TD John Clendennen asked whether the target for reducing leakage to 25% by 2023 was sufficiently ambitious.
Mr Laffey said leakage was a complex area and Ireland's water network of 65km in mains pipes was very long relative to the population served.
He said what is called leakage also includes "unaccounted for water" which could be secondary connections or other connections the utility is not aware of.
He also said that fixing leaks is not simple, as water pressure then rises, leading to higher water usage and faster leaks.
Chief Executive Niall Gleeson also warned that the greater Dublin area is facing serious water supply and wastewater capacity challenges.
He said in his opening statement that this is related to water services infrastructure struggling to keep pace with population, housing and commercial growth.
"These are not just Dublin problems; they have significant implications for Ireland's competitiveness and population. The region and counties therein are home to a large number of our citizens and a base for economic activity - and they are growing," he added.
Uisce Éireann needs €2bn to help reach Govt housing targets
Earlier, Uisce Éireann told TDs and Senators that it requires an additional €2bn to deliver the water services capacity needed to reach the Government's revised housing targets.
Mr Gleeson said the new higher housing targets of 300,000 new homes by 2030 means it requires additional ringfenced funding.
Uisce Éireann's funding plan for 2025-2029 has already set out a funding requirement of €10.3bn investment for capital infrastructure and assets.
But Mr Gleeson said that €2bn additional funding is needed between 2025 and 2030 to support this level of housing growth.
In the utility's opening statement, it said this additional funding would focus on ensuring the appropriate water and wastewater infrastructure is in place to facilitate new housing in areas prioritised for new development under the National Planning Framework.
Mr Gleeson also called for more certainty around its funding and the Government's investment commitments.
He said: "Many of our stakeholders across the supply chain have highlighted the challenges in being able to meet demands without clarity as to our funding programme and the provision of one-off investment.
"Additionally, the annual allocation of funding to Uisce Éireann creates further uncertainty year-on-year. An effective solution is to align our funding allocation to our overall investment programme through a multiannual funding structure so we can better plan and deliver long-term projects, maximise efficiencies and provide greater certainty to our supply chain."
