Irish Water suffers €139m loss

Irish Water has confirmed it suffered a loss of €139 million in 2014 as both the chairman and the chief executive of its parent company, Ervia, admitted “mistakes” were made in how the water utility evolved in its first year in operation.

Ervia, in its latest annual report, said the loss suffered by Irish Water last year is “in line with start-up expectations”, as its financial results were pending the introduction of domestic water charges from January of this year.

The €687 million in revenue it did generate in 2014 comprised of €248 million from non-domestic charges and €439 million from Government subvention.

However, its operating costs came in at €794 million. A further €10 million went on “defined benefit actuarial losses”.

The report shows Irish Water managing director John Tierney was remunerated to the tune of €248,000. That was made up of €200,000 in basic salary and €48,000 in “other benefits including pension costs, cost of company car and health insurance”.

“Establishing a new national utility is a major undertaking. Doing so while also introducing domestic charges adds to the challenge,” said Michael McNicholas, Ervia chief executive. “We have acknowledged that we have not got everything right in the set up of Irish Water, and that mistakes were made.

“The scale of the undertaking, and the pace at which we set about making it happen were contributory factors but we also fell short of what was required in communicating the need for this change and the benefits that will be delivered from a national utility focused on fixing our water services.”

For his part, Mr McNicholas had a basic salary of €250,000 in 2014, to which was added €84,000 in “other benefits”.

Ervia chairman Rose Hynes apologised on behalf of the board of management “for issues that impacted customer confidence during the year”.

“I remain certain that Irish Water is the right approach for the country to deliver the water infrastructure and services that are crucial to the well-being of our customers and economic growth in the future,” she said.

Earlier this week, in an address to the MacGill Summer School, Mr McNicholas acknowledged the utility would not be able to survive without public support as he conceded the company may not be around after the looming general election.

Meanwhile, Ervia itself, which is also the parent company of Gas Networks Ireland and publishes separate results to Irish Water, had a profit of €137 million for 2014. That was down €22 million or 4% on the previous year, a drop which Ms Hynes blamed on “increased operating costs and depreciation charges associated with an increasing asset base”.