Updated: 12/12/16 : 07:35:56
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€2bn State bill for Irish Water

Irish Water will have cost the State over €2bn by the end of the year, according to government projections, writes Joe leogue.

Figures released to the Irish Examiner show the controversial utility will cost the State €844m in 2016 alone, when its operating subvention, capital contributions and the replacement revenue — provided by the State following the decision to suspend billing customers — are taken into consideration.

The State gave Irish Water €678m and €621m in 2014 and 2015 respectively in operating subventions and capital contributions, bringing the total cost to €2.143bn over the past three years.

The operating subventions from the Government were paid in respect of concessions Irish Water was to pass onto customers, such as free allowances for children.

The Department of Housing, Planning, Community and Local Government released the figures following a request for the total cost to the State in establishing Irish Water to date.

“The provision of State funding to Irish Water is made up of a number of elements,” a department spokesperson said.

“Only those elements which do not have an expected return are counted for the purposes of calculating the cost to the State. For example, Irish Water received borrowings and not subvention for the costs of the domestic metering programme.

“No exchequer funds have been provided for the establishment costs of Irish Water.”

In 2014, the State provided a €439m operating subvention and €239m in capital contributions or equity. Last year, its operating subvention dropped to €399m and capital contributions came in at €222m.

However, 2016 has proven to be the costliest year to date. While capital contributions dropped to a low of €184m, the operating subvention rose to a high of €479m.

Furthermore, in 2016, the State gave Irish Water €181m in replacement revenue.

“Following the Government decision of 18th October 2016, it was agreed to provide Irish Water with an additional subvention of up to €181m to allow Irish Water meet the shortfall in its projected revenue stream that arose due to the suspension of domestic water charges,” the department said.

The figures are revealed as the 20-member Oireachtas committee on the future funding of domestic water services meets tomorrow for the first time since the publication of the Duffy report on charges.

The committee is expected to be divided on the contentious subject of unpaid water bills, with some members due to argue in favour of refunds for those who paid their Irish Water charges prior to the suspension of billing earlier this year.

Irish Water said 989,000 households (nearly two thirds) had made a payment to Irish Water over the utility’s first five billing cycles, covering usage from January 2015 to March 2016.

Over that time, Irish Water says it has collected €162.5m from customers who have paid some or all of their bills — a figure some ministers and TDs have said should be refunded to households.

Some 533,000 customers have yet to make any payments to Irish Water.

However, department figures show it forecasted an income of €271m from domestic billing in 2015, but collected just €144.2m.

Its domestic revenue from the fifth and final set of bills was €18.3m, down from €33.4m paid over the last three months of 2015.

This article first appeared in the Irish Examiner.