Ireland’s water problem just keeps on dripping

The new government is already drowning on the water issue.

Last week this column described the new Cabinet here as a pathetic, ramshackle mishmash, cobbled together by Enda Kenny so he could remain as taoiseach. This involved giving ministerial posts to a motley crew of independents with no coherent policy. And it involved giving senior ministerial posts to Fine Gael deputies with no experience.

We said last week it was "the worst effort at putting a government together we have seen here in a very long time." Maybe that seemed harsh, and several people were in contact to tell us so.

But now that we know the full details of the 160-page program agreed between Fine Gael and the independents, which was finally published last Thursday, there is no reason to change our initial assessment. If anything, the situation seems worse.

The document sets out how this administration will inflate its annual budget by around €10 billion over the next five years, with two-thirds of that going in extra state spending and one-third in tax cuts.

To be fair, much of this is down to what Fianna Fail wants as its price for not voting against the government rather than to just giving the independents what they want. In fact when you add in the earlier understanding reached with Fianna Fail, the total cost is even higher. But the important point is that all of this is supposed to be financed by growth in the economy.

In other words, it's a plan to spend money we don't have. If Brexit happens, global growth remains flat, and our state finances are undermined by the huge pay increases now being demanded by tens of thousands of state workers, it's money we may never have.

The danger is that we will slide back into massive borrowing to make a lot of things happen that we can't really afford. Already it looks increasingly unlikely that we will meet the upcoming targets for balancing the books and finally putting a lid on our national debt. That's the big picture and it's worrying.

On the micro level, things are just as alarming when you look at individual issues, for example what is now being proposed to meet two of the most contentious challenges we face. These are, of course, water charges and the housing crisis. We will be looking at the housing problem in this column in the coming weeks, but let's begin with the water issue because nothing else demonstrates so well the incompetence, opportunism and cowardice of our politicians and particularly of the new administration and its Fianna Fail facilitators.

The new government began by giving us a laugh on the topic. No sooner had it been formed than it was revealed that one of the independents sitting at the cabinet table had failed to pay his own water charges. The new Junior Minister for Health Finian McGrath (another junior schoolteacher!) was the culprit. To the amusement of the whole country he then consulted the attorney general about his position (you have to admire the hubris) before relenting and agreeing to pay up.

Finian McGrath will pay water bill to avoid ‘distraction’ https://t.co/O9ihZCyAIy (GM) pic.twitter.com/yI058Gqkts
— Irish Examiner (@irishexaminer) May 14, 2016

This would be funny if it wasn't so serious. The whole water issue is now such a catastrophe that it is eroding the respect that the general public are supposed to have for the government, an essential component in making a democracy work. And that is dangerous territory.

The present position, largely forced on Fine Gael by Fianna Fail, is that water charges will be suspended for at least nine months. This is to give time for an "expert commission" to look into the entire issue, including water funding, water infrastructure, and the future of the Irish Water authority. But no one is expecting that commission, which still has to be formed, to report in less than a couple of years.

So the can has been kicked way down the road. And it gets even better.

When the commission does eventually report, its findings will go to a parliamentary committee which will consider the report and eventually decide how much of it to recommend to the Dail and the government for action. With any luck that could take months.

That is why Fianna Fail are already quietly saying that water charges are gone and they're not coming back. And Fine Gael, desperate to hold on to power, are saying nothing to contradict this.

As far as the politicians are concerned, the mess they made on water has been submerged and it will stay that way for a long as possible. But it's not as simple as that.

Providing acceptable water services here has now become an enormous problem that won't go away. It will eventually drag them all under the surface and before too long they won't be waving, they'll be drowning.

The first problem for the new government is the 60 percent of law abiding citizens who, however reluctantly, have already paid their water charges and who now feel like fools.

In fairness, they should be given their money back, but so far there is no proposal to do this. Instead, the government's position on achieving fairness is an insistence that all those who have not paid must still do so, including a late payment penalty, even though the charges are going to be suspended in a few weeks. Making them pay up now seems like an impossible task, not least when you think of the example set by a government minister.

People who have not paid their water charges bill 'will be pursued' - Simon Coveney : https://t.co/BZ6fS9vf6C pic.twitter.com/87a9FWjRiR
— Independent.ie (@Independent_ie) May 16, 2016

Then there is the problem of the EU Water Directive. The deal agreed between the parties is a clear violation of this and there will be serious (and expensive) consequences for the government and for Ireland.

The directive requires all European states to conserve water by getting users to pay, and it also lays down standards for water quality and for how waste water is to be treated. To its shame, Ireland is the only country in the EU refusing to comply with this sensible policy which was agreed 16 years ago by all EU countries.

It's not like we don't need it. As we explained here before, our water infrastructure was built by the British two centuries ago and is now in serious need of upgrading, with major problems in supply and in waste water disposal.

More than 40 percent of fresh water is lost from leaking pipes in the Dublin area. Many towns around the country do not have adequate waste water treatment and pollute rivers, lakes and coastal waters.

This problem is mainly due to the fact that, unlike electricity or gas, water has been provided here by 34 local councils around the country with little coordination between them.

When the crash happened, the EU put pressure on the last Fianna Fail government to start charging for water to pay for upgrading the system. And although Fianna Fail prefers to forget this now, the late Brian Lenihan, who was then the Fianna Fail finance minister, told the Dail that in future consumers would have to pay for water, after a basic allowance had been exceeded.

When Fine Gael and Labor took over, they created the new utility called Irish Water to start this and to deal with upgrading the system on a national level. But the way this was done enraged the public, with huge amounts of money spent on setting up the new utility and installing water meters before any money was spent on fixing the leaking system. Left wing parties called it double taxation and the campaign of non-payment began, with protest marches around the country.

Fantastic day of action against water charges in Limerick yesterday. Together we can finish off Irish water. pic.twitter.com/HGcpiNYeML
— Cian Prendiville (@cianpaaa) May 15, 2016

Seeing their opportunity, Fianna Fail then cynically switched sides and started demanding an end to water charges until a major review of Irish Water had been completed. But the last government pushed ahead, spending a few hundred million establishing Irish Water and around €500 million (so far) putting water meters outside every home.

The protest movement grew to alarming proportions and as a result, in a desperate attempt to get people to accept the new system, the last government capped the annual charge at €260 until 2019.

Not only that, but all households who registered with Irish Water got a €100 "conservation grant," further reducing the bill to €160 a year. And they got this whether they paid their water bill or not!

The government also responded to the emotional anti-charges campaign by promising that families would not be left without water. No non-paying house would have water cut off or have pressure reduced, and there would be no action of any kind against non-payers until a house was sold, when the charges would be deducted from the sale. This made it even more difficult to collect the charges.

We are now at the end of the first year of water charges and, as we said above, 60 percent of people have paid despite the mess the politicians have made of it. No one seems to know what is going to happen in the future. What we do know is that vast amounts of money have been wasted setting up the new quango with only a fraction of the leaking pipes being fixed.

Irish Water is now regarded as an embarrassment by many people here, although clearly it is the politicians who are most to blame for the mess. They are the ones who capped the charges, making the water meters that cost half a billion euro redundant.

They are the ones who gave away the €100 "conservation grant" even though there is no incentive to conserve water -- with capped charges you can run your taps 24/7 and you will still be charged the same as someone who uses water responsibly. And now water charges have been suspended, or abandoned altogether, depending on who you believe!

The whole thing at this stage is a national joke, and one can only wonder what our EU partners must think of us. Meanwhile we have been left with the problem that was there when this sorry saga started -- a national water system that is a disgrace and a new Irish Water national utility wasting vast amounts of public money on plush offices, consultants and call centers when it should be fixing pipes.

Looking back now, it seems obvious that a system of charging for water based on house size and/or family size could have been introduced at a fraction of the cost of installing meters. And that half a billion euro that has been blown on installing unused meters all over the country could have been spent on hospitals or schools, for example.

We are still going to have to find money for the massive investment that is needed nationally to bring our water services up to an acceptable standard. If there is to be no charging, then the €20 billion-plus that is needed will have to be borrowed, which will have serious implications for the state finances and borrowing costs, as well as making us miss the targets for balancing the budget agreed with the EU and the IMF.

It really is pathetic that charging for water based on usage or family size, a principle that is accepted in all European countries and in the U.S., is not accepted by so many people here. The quango behavior of Irish Water has not helped but this is really a political failure, a failure to engage the public and convince them of the necessity.

The main opposition was based on the spurious claim that water charges are double taxation and that free water is a right. The much parroted slogan that "water is a human right" and therefore must be free does not stand up to scrutiny.

Treated water costs a lot of money to produce and that has to be funded. So if someone does not pay, someone else has to pick up the bill.

The double taxation line does not stand up either. It is true that back in the 1970s when the old "rates" (local taxes) which used to fund water services were abolished as an election gimmick, the cost was transferred to central government which raised VAT (sales tax) to compensate. Central government was supposed to give back enough funding to local councils for local services. The trouble is that over the years the money was used to finance many other things that voters wanted rather than updating water services.

The reality is that the money that should have gone into water was used for improvements in schools, the health service and so on, things that those now refusing to pay for water were demanding. So no, there is no double taxation. We just spent the money on other things and we now have to deal with the consequences of under-investment in water over many decades.

Just how far we have fallen behind was illustrated by one economist here recently who pointed out that the Republic has 856 water-treatment plants, whereas Northern Ireland has just 24 (the difference is the ones in the North are bigger and more efficient). Losses of treated fresh water from leaking pipes are 49 percent in the Republic, almost double the 28 percent in Northern Ireland.

Water quality here is so poor in many areas that "boil water" public notices are common. And we have a serious pollution problem that we don't like to talk about because it might affect tourism.

As a country we need to grow up. But we're stuck with the politicians we have (some of whom are on a 1916 jaunt in the U.S. this week, which is a lot more entertaining than facing up to a problem like water at home). You would not put them in charge of a garden hose, never mind a national water system.