New company Irish Water 'will not be sold to private sector': Hogan

The minister insisted that the firm will remain in public hands even if the parent company is sold off in a disposal of state assets.

“Legislation will be put in place to ensure Irish Water remains in state ownership in relation to the sale of state assets,” Mr Hogan said.

It costs about €1.2bn to supply all Irish homes with clean water, yet about 40% of supplies are thought to be lost through leaks. Ireland is the last country in the European Union, and among the OECD states, to charge for water.

Hundreds of millions must be spent on plumbing the network and replacing leaky pipes.

Announcing the new company, Mr Hogan gave assurances that the public will not be forced to make upfront payments for meters – a must-have before charges come into effect by the end of 2014.

It is estimated that they must be installed in about one million homes. Critics have warned there is not enough time between now and the end of next year.

Mr Hogan said he was confident between 90% and 95% of houses will be metered by the deadline.

It was also stressed that under the control of Bord Gais Irish Water would have the capacity to raise funds for capital investments on the financial markets in a similar fashion to the ESB.

In a statement Bord Gais said the new utility is an opportunity to establish a commercially successful infrastructure company and a valuable asset for the State.

The Government will first finance the installation of water meters with a €450m loan from the National Pension Reserve Fund.

It emerged over the weekend that householders could have to pay for the meters themselves, which were priced at around €350.

There is speculation that householders could be forced to make annual payments of around €39 over 20 years – to cover the meter costs, but Mr Hogan said these were details that had yet to be ironed out.

“The decision will be made in 2014 when the full implementation of the water metering programme is complete,” Mr Hogan said.

“There will be a standing charge like there is in any other utility bill included at that stage. That will be a matter for Bord Gais and the regulator to work out.”

Mr Hogan insisted that no repayments will be required before the water metering programme is complete.

The metering plan is also forecast to create 2,000 construction jobs.

'Separate entity

A Government spokesman later confirmed that a seldom-used law will put Irish Water on a similar basis as the foundation of the ESB. This means that while the utility company will be operated by Bord Gais, it will remain a legally separate entity.

The Government made an agreement under the terms of its EU, IMF and European Central Bank bailout deal to introduce water charges.

Sinn Féin leader Gerry Adams rejected the idea that making small annual payments to cover the cost of installing water meters would be less burdensome on householders than forcing them to fork out a lump sum.

“The fact is, people pay taxes,” said the Co Louth TD.

“Straws break camels’ backs. We know that people can’t afford the septic tank charge, can’t afford the household charge, can’t afford VAT increases, and they can’t afford the hike in public transport.”

Yesterday, Taoiseach Enda Kenny insisted that any decisions made about water charges and payment methods would be fair.

The introduction of water charges and hints that householders could have to pay for meters comes on the back of months of controversy surrounding the household charge, which was also introduced by Mr Hogan.

A group of left-wing TDs have warned the Government could face a mass revolt over the impending water tax and related charges – similar to that seen in the run-up and aftermath of the household tax.

Meanwhile, a Labour councillor in Wicklow has threatened to leave the party if the Government does not reverse its water plans.

Jimmy O’Shaughnessy, who has served the party for 60 years, said: “I didn’t agree with us entering the coalition with Fine Gael.

“But we have become the whipping boy for Fine Gael and the rest of the country. Any bad decision that is made comes back to us.”