Hogan was never told of €50m to be paid in consultants’ fees

Environment Minister Phil Hogan was never told by the department of the €50m set to be paid in consultants fees by Irish Water — despite the fact it was informed of the sum in March last year.

It also emerged last night that staff at the commercial State company cannot be disciplined and cannot be fired, Irish Water said.

Managing director John Tierney also confirmed that if the regulator refuses to add the company’s start-up costs into charges for customers — due to inefficiencies — that Irish Water will still ask the Government to foot the bill.

Department secretary general Geraldine Tallon told the Public Accounts Committee that the broad amount in costs, €150m and a contingency of €30m, was originally outlined to the minister. TDs heard how the department was made aware in March last year of a “ceiling” of €50m for consultants or external services.

But Ms Tallon admitted that, despite getting monthly updates from Irish Water, she did not “interrogate” the figures being provided. She said she did not separate the external or internal costs for the firm’s set up.

Ms Tallon said she “didn’t speak to the minister” in specific terms.

Department official Maria Graham admitted that the “amount [the €50m] included in the totality of the costs was not shared with the minister”.

Sinn Féin TD Mary Lou McDonald said she was astonished that the minister was not given the specifics.

She also said that she was shocked over €4m that was spent on “brand development” and “customer engagement”.

The company could not explain the cost on the spot but said it related to the complex set-up of Irish Water.

The committee also heard Irish Water workers cannot have their pay reduced or be dismissed, even if they under-perform. Company programme director John Barry told TDs that workers could only be moved in their position, but added that disciplinary procedures could be used if necessary.

Asked by Independent TD Shane Ross if they could be dismissed, Mr Barry said no and only that the company could move workers and “try and improve their performance”.

Mr Ross said he regarded the arrangement as the “bonus culture returning”.

The committee heard Irish Water has 200,000 customers already on its books, including mainly businesses and local authorities. It had received €190m from these sources so far, it said.

Energy regulator Paul McGowan admitted, however, that if efficiencies or value for money was not shown. that the set-up costs could not be eventually passed onto consumers through water charges.

Mr Tierney then admitted to TDs that if this was the case, the company would still ask the Government to pay for the start-up costs.