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The Government has today agreed to establish Irish Water as an independent State owned subsidiary within the Bord Gáis Eireann (BGE) group.  

Irish Water will be established as a wholly owned public water utility and will remain in public ownership.

Welcoming this decision, Environment Minister Hogan stated

The overarching objective of the Government’s water reform programme is to put in place structures and funding arrangements that will ensure we have a world class water and waste water infrastructure that meets all environmental and public health standards.

Minister Hogan said that there will be no up-front charge when the water metering progamme is introduced and that a newly appointed Water Regulator would ultimately decide on the funding model.

Reform of the existing model is necessary to:

• Develop a sustainable funding model to meet the ongoing operational and capital costs which currently amount to about €1.2 billion per annum;
• Reduce levels of leakage which are a very significant problem. Average water leakage levels of more than 40% in Ireland are well above international standards;
• Support the development of strategically important national water services projects which will be delayed due to funding constraints if a new delivery structure and funding mechanism is not established;
• Ensure ongoing compliance with public health and environmental standards;
• Address fragmentation in the existing structures and achieve real economies of scale in delivery and operation, leading to significant reductions in the overheads in the management of water services;
• Exploit the full potential for industry standard IT systems for management of water services;
• Introduce independent economic regulation of the sector.
• As the value of water increases due to global shortages, ensure that we can use our rich water resources as a strategic asset to the Irish economy.

The Minister added:

Quite simply, we are faced with a substantial investment requirement in future years. The present funding model that is not sustainable, and the current scale of operation is not efficient or effective.

Minister Hogan spoke to MerrionStreet.ie earlier:

Listen to Minister Hogan's opening statement at the press briefing today: