IRISH WATER IS likely to face questions from the Dáil’s Public Accounts Committee (PAC), the public spending watchdog, over news that it has spent some €50 million on consultancy fees in the last year.
The revelation from John Tierney, the chief executive of the State’s newest utility company which will be overseeing water charges, has caused controversy with a number of PAC members calling for Irish Water to appear before the TDs “immediately”.
In a statement this afternoon, Irish Water defended the spending saying the initial cost of setting it up has to be seen “in the context of long term cost savings”.
Environment Minister Phil Hogan also defended the cost telling KCLR that it while it is “a lot of money” it is “required to set up this company” and added: “This is going to be a very cost effective and lean operation.”
Fine Gael TD Simon Harris said that news of the consultancy fees, which went to large firms including IBM, Accenture, Ernst and Young and Oracle, is “very unsettling to hear”.
“It is absolutely essential that they come before the Public Accounts Committee (PAC) and provide detail of what the €50 million was spent on… to ensure that taxpayers’ are getting value for their money,” he said.
Labour TD Gerald Nash echoed these calls saying that the spending is “astonishing”: “This is a breath-taking sum of money in anybody’s language. The public have a right to know exactly how this money was spent and how, if at all, it can be justified.”
Nash admitted on RTÉ’s News at One that “we are operating in somewhat of a vacuum at the moment” as more information about the consultancy fees has not been made available.
Politicians also want the regulator, the Commission for Energy Regulation, to appear before it given it is the body tasked with overseeing expenditure by Irish Water.
Sinn Féin’s environment spokesperson, Brian Stanley, went even further in a statement today describing the developments in Irish Water as a “national scandal”.
Meanwhile, Fianna Fáil has tabled a Dáil motion aimed at bringing the utility company under the Freedom of Information Act.
Irish Water said that the total cost of delivering water services in 2011 was €1.2 billion and based on this, over the next 10 years, €100m represents less than one per cent of the cost of providing water services.
“The initial upfront investment in creating Irish Water must also be seen in the context of the long term cost savings. By 2021 the efficiencies generated by having a single national water utility, rather than 34 separate water authorities will be in the region of €2 billion,” a statement said.
It also said that the majority of spending so far has been on hardware and software costs to develop IT systems aimed at “the development of billing and customer service systems” as well as financial and asset management systems.
The statement continued: “These set up costs involve procuring short term specialist services that typically would not be required in the long term operation of a water utility.
“Setting up a utility on the scale of Irish Water is a significant undertaking and there are costs involved in this. The approach taken to establishing Irish Water within Bord Gais is most cost efficient.”
Yesterday, Tánaiste Eamon Gilmore said that the €50 million does “seem to me to be a high figure” and said that the utility company would have to account for the expenditure and show that it has been necessary.
Irish Water has indicated a willingness to come before Oireachtas committees and is due to appear before the Environment Committee in February.
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