Irish Water 'will cost €180m'

The total set-up cost of Irish Water is expected to reach €180m, its chief executive has revealed.

John Tierney said the Government has given the budget the green light and insisted that once it is up and running the national utility will have saved the state €2bn by 2021.

The under-fire businessman, who sparked fury last week when he revealed that €50m of the total set-up cost was taken by external consultants, confirmed that figure is likely to grow over the next two years.

IT giant IBM will have been paid €44.8m by 2015, Accenture €17.2m, Ernst & Young €4.6m and KPMG €2.2m.

“This entire programme and associated budget as well as the approach to resourcing and staffing the programme was rigorously examined and approved, by both the internal Bord Gais governance and approval processes, and by the relevant Government departments,” Mr Tierney said.

The Irish Water boss confirmed the spend under questioning by the Oireachtas Committee on the Environment, Culture and the Gaeltacht.

He will appear tomorrow before the Public Accounts Committee to explain and justify the costs behind the organisation, which is funded by the taxpayer.

The company has insisted that all contracts it has awarded are in line with European rules on public competition.

As the state monopoly faces calls to explain how it spent €50m on external consultants, it has also been forced to clarify that IT companies were hired under strict guidelines.

It claimed it saved €58m in software licences by using the same IT systems and processes as Bord Gais for billing, asset management and utility financial systems.

Parent company Bord Gais said it and Irish Water had been scrupulous in the awarding of contracts.

“To ensure value for money and transparency, all contracts have been awarded in line with the guidelines set out at EU level for public sector procurement,” it said in a statement.

It added: “Both Irish Water and Bord Gais strongly reject any suggestion that the company was not fully compliant with all procurement rules.”

Mr Tierney said he had never spoken directly to Environment Minister Phil Hogan regarding Irish Water.

However, he said the Government was always aware outside help would be needed to get the utility up and running, in the form of external consultants.

“From the very outset Bord Gais advised Government that this type of support was critical to deliver this programme and achieve the targets set in the demanding timeframe,” Mr Tierney told the committee.

Mr Tierney insisted the organisations at the centre of the consultants' fees controversy were brought in out of absolute necessity.

“These service providers have joined our team temporarily to help us build a hugely valuable asset,” he said.

“We did not bring in experts to tell us how to build Irish Water. We brought in contractors to help us build the systems and processes necessary to run the business. This is standard practice in utility businesses.

“In our case we simultaneously built five major systems and procured global specialist expertise to ensure that the most efficient industry practice is being deployed.”

Mr Tierney said “these weren’t people producing reports”, but rather vital experts drafted in to help build a national utility within 18 months.

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