Irish homes face further hidden costs on top of a €160 charge to bankroll a controversial new water utility company, experts have warned.
Taxpayers will have to plug a massive gap between money expected to be raised from the water charges – the cheapest in Europe – and the cost of developing a modern water system, they claim.
Sebastian Lennox, of international analysts Global Water Intelligence, said the shortfall will run into hundreds of millions of euro.
“The true cost of water is not being conveyed to the population,” he said. “Going on the tariffs announced, there’s no way Ireland will be able to cover the costs of operating and maintaining a water system and cover the investment costs of new infrastructure.
“It will still have to be subsidised, which is not an ideal situation.”
Describing the new rates as a major backtrack, Mr Lennox said the shortfall will have to come out of the public purse.
“It’s got to go in the budget somewhere,” he added. “Based on the massive infrastructural needs that Ireland has after years and years of underinvestment, the tariffs will just not cover it.”
Further uncertainty has been heaped on the future of Irish Water with the threat of a major boycott as part of what campaigners say is a mass mobilisation against the latest austerity tax.
Confirming the revised charges, seen as a major U-turn in the face of increasingly heated street demonstrations, Environment Minister Alan Kelly said bills would be start dropping on doormats next April.
Householders will be be liable for charges of €160 for single adult homes and €260 for all other homes.
Water conservation grants of €100 a year mean the effective costs will be €60 and €160 respectively.
The charges, liable from January 1, will remain the same for four years, before a review.
Originally, the Government had signalled the levy would be up to €600 a year for some families.
Amid widespread protests targeting government ministers, Irish Water and contracted metre installers, Mr Kelly admitted the Fine Gael/Labour coalition’s role in the country-wide confusion and upset.
“We as a Government have made mistakes but now we face a critical choice,” he said. “Put simply, we now have a choice that is based on either short-term emotion and anger or long-term prudence and common sense.
“Anger is never a good starting point for a key decision.”
But describing the new charges as a “massive climb down” by the Government, Barry Cowen, Fianna Fáil environment spokesman, accused the coalition of arrogance and defiance towards citizens.
The setting up of Irish Water was an unmitigated disaster and the latest in at least 10 major U-turns over last year, he said.
The Dáil had to be suspended for a time after a walkout sparked by Mr Cowen in reaction to Mr Kelly and Taoiseach Enda Kenny leaving the chamber without listening to Opposition reaction to the levies.
Gerry Adams, Sinn Féin leader, urged further protests against the charges.
“The Government hasn’t got the message yet,” he said. “They say they have been listening to the people opposed to water charges.
“If they were listening they would know that the people are demanding the scrapping of water charges and not a package to sweeten the deal.”
Under the scheme, householders who do not pay the water charge face late payment penalties of €30 for single adult homes and €60 for others.
Those who don’t register for the levy will not qualify for the water conservation grant and will automatically get a €260 a year bill.
Other measures include:
:: Properties who have either their own water supply or their own sewage services will be liable for half the charge.
:: During periods where drinking water is declared unfit for consumption, householders will not be liable for drinking water fees but will continue to have to pay for sewage treatment.,
:: Those who choose to have their water usage metered – around half a million metres have already been put in place – will be charged €3.70 per 1,000 litres.
:: Children will get a free allowance of 21,000 litres a year.
:: Occupiers, including tenants of rental properties rather than their landlords, will be liable for the charge.
Mr Kelly said he will bring in legislation that requires a referendum before any future plans to privatise the utility.
Right2Water, an anti-water charges umbrella organisation backed by five trade unions, said people power had won major concessions but its campaign for complete abolition of water charges is now in the “home straight”.
A national demonstration is being organised for Dublin on December 10.