Sadly, warnings to politicians on the huge costs of years of under-investment have not been heeded and Irish Water needs to get its ducks in a row financially, writes Kyran Fitzgerald
After an aged water pipe gave up the ghost last week, bringing havoc into the lives of 70,000 people in the North East, the website Waterford Whispers suggested that the burst main was “too rural to fix quickly” while advising those affected to “seriously think about moving closer to Dublin”.
The website predicted that a new pipe could be in place by the time the TDs and Senators return from their holidays in September.
Flippancy has its place. Laughter is good for the soul but, really, after decades of neglect of this most basic of services, the joke is surely on all of us.
Irish voters have really been slow on the uptake when it comes to politicians who come calling, offering freebies.
We think we are sophisticated. “Those politicians are all the same!,” we scream. In reality, all too often, we will fall for any electioneering ‘medicine man’ with a magic tonic in his knapsack.
The debate on water charges is over for the foreseeable future. Those who sought to argue for a system of household charges based on consumption have been shouted down, but the underlying issues cannot be shoved so easily away.
Now comes the day of reckoning as the bill for the neglect of investment in our water supply starts really to fall due. Jerry Grant, the managing director of Irish Water, has provided little in the way of comfort.
He acknowledged that the Louth-Meath emergency was a “real failure”, telling RTÉ that “all we can do is offer an apology”.
There could be many more on the way to other communities around the country. Mr Grant warned that there are simply no guarantees. A generation of asbestos pipes that came onstream since the 1960s are reaching the end of their lives. Many are brittle and could fail suddenly, he warned.
This state of affairs is the consequence of bad planning and neglect, as well as base political cowardice.
Politicians queue up to cut ribbons on roads and buildings. No-one wishes to be seen near a sewer.
Such work is best left to lowly types with hard hats. But take a trip back to the 19th century and you will discover that the groundwork for huge improvements in mass health was laid by the planners and engineers of our water and sewerage systems.
Our ancestors left us a grand capital investment legacy which has been largely frittered away. There is now real concern about the prospect of major failures in our water infrastructure as many reservoirs reach the end of their useful life.
Irish Water is planning a €80m investment in a new reservoir but that is only the start. Ageing lead pipes are badly in need of replacing.
According to Mr Grant, 860km of pipes have been replaced in the past three years. There are 25,000km of water pipes in Ireland.
As Irish Water itself acknowledges, the average age of water pipes here is much older than across Europe, while we are losing half of our clean water through leaks.
The equivalent leakage figure for the UK is 23%. The superior performance is due to an investment of over €145bn in the period since privatisation in 1989.
Water companies plan to invest at least €5.65bn a year over the next five years.
Of course, there is a downside in that households in England and Wales pay on average almost £400 (€447) a year in charges whether as owners or tenants. What this means is that there is a guaranteed flow of income into water companies, an income stream which can be used to attract further investment from the private sector.
Irish Water published a seven-year business plan, in October 2015, in which it committed itself to an investment of €5.5bn over the period 2014 to 2021.
Critics suggest that this is less than a half of what is actually required.
However, Housing Minister Eoghan Murphy, who — lucky man — is charged with tackling this issue, has not provided much in the way of reassurance.
He told Morning Ireland that Irish Water is getting the funding it requires this year.
As for the €640m it seeks for 2018 and the €700m in 2019, this will have to be fought for in cabinet, he warned.
One has to wonder about peoples’ senses of priorities when ministers prattle on about building new cities from scratch and plan for metros on the rather shaky basis that almost every other EU big city has one.
It may be time for Mr Murphy, admittedly fresh to the cabinet table, to display a bit of mettle.
The problems do not end with rusty pipes and aged reservoirs. Irish Water has warned that raw sewage is being pumped into 44 locations, including at the Lower Harbour in Cork.
As a top official at the Irish Water holding company, Ervia, once put it: “This is ridiculous.”
The country is already faced with EU infringement proceedings across four fronts over breaches of waste water directives.
Irish Water has taken over from 44 local authorities and has moved to make annual operational savings that it hopes can reach €272m by 2021. But, as the infrastructure expands, new costs, in turn, will be incurred.
The company has called for the establishment of a UK-style drinking water inspectorate. It could be making a rod for its own back. Think of the HSE and Hiqa.
The health and safety issues are very real, with rural consumers faced with pesticide contamination while city dwellers cope with accumulated lead in ageing pipes. The Government needs urgently to ring fence money while stepping up the level of accountability and transparency in relation to the ongoing spend.
Outside investment can be leveraged through the pension and savings industry.
Already, water has been identified by many in the investment as a good source of long term financial return.
Other jurisdictions are taking action as water shortages grow. The State of California, faced with long term drought, has approved €890m in incentives for recycled water projects.
In the City of London, investors scent opportunity. The Pictet Water fund has produced some spectacular returns as worldwide demand for water and decent waste treatment outstrips supply.
The United Nations has warned that by 2025, two-thirds of the world’s population could be experiencing water stress.
Irish Water could be a reliable outlet for investors seeking a steady return and, these days, money is available at cheap rates by historical standards.
But Irish Water needs to get its ducks in a row financially if it is to attract such long-term funding.
In 2012, Engineers Ireland cautioned that “financial burdens should not be placed on Irish Water which will effectively kill it at birth”. It added that the legacy costs of years of under-investment in basic infrastructure should be recognised in its financial model.
Sadly, this warning has not been heeded.
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