Chambers Ireland - National Water Authority

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Presentation to the Dublin Chamber of Commerce's Infrastructure & Transport Forum by Sean Murphy, Chambers Ireland, on plans to create a National Water Authority and how it could work best.

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  • Dun Laoghaire-Rathdown County Council, for example, introduced a ‘pay by weight/presentation’ refuse collection for domestic users in January 2005. Over a period of six months this has helped reduce its dependency on landfill by 30pc.
  • Chambers Ireland - National Water Authority

    1. 1. How a National Water Authority might work Seán Murphy
    2. 2. Funding Challenges <ul><li>Business is paying locally for the problems that we encounter daily due to the inadequate provision of funding at a national level. </li></ul>
    3. 3. Water <ul><li>One of the core building blocks of an FDI proposition </li></ul><ul><li>Taxes </li></ul><ul><li>Talent </li></ul><ul><li>Location </li></ul><ul><li>Electricity Supply </li></ul><ul><li>Water Availability </li></ul>
    4. 4. Pharma and BioPharma <ul><li>Particularly important for this sector </li></ul><ul><li>Wyeth in Grangecastle EUR1.8Bn invested in developing </li></ul><ul><li>Pharma is strong in Cork for the same reason </li></ul><ul><li>Clean Water Supply was a crucial Component of these decisions </li></ul>
    5. 5. Major investments made <ul><li>1994-2006: EUR4.4Bn invested in Water upgrades </li></ul><ul><li>Yet upwards of 30pc of treated water is still being lost. (It was 43pc on ave in 2008 (Forfás) and some areas still exceed 50pc) </li></ul>
    6. 6. Charging is the crucial element <ul><li>To fund infrastructure investment </li></ul><ul><li>Cut Demand </li></ul><ul><li>Incentivise better use </li></ul><ul><li>(A toilet scrappage scheme with replacement of single flush to dual flush system would cut 15pc of total household usage – at a cost of EUR25m!) </li></ul>
    7. 7. More Investment is Needed <ul><li>2007-2015 EUR 4.75Bn? </li></ul><ul><li>NDP was based on year on year growth rates!!! </li></ul><ul><li>What now? </li></ul>
    8. 8. Apply User Pays Principle <ul><li>Ireland is virtually unique in not charging for domestic water use. </li></ul><ul><li>Water Services Act 2007 contains an absolute prohibition on domestic charges! </li></ul>
    9. 9. It has been done before <ul><li>Domestic Waste Charges resulted in a dramatic decline in waste to land fill </li></ul><ul><li>While water is free at tap it in fact costs EUR1.2Bn per year to deliver (Comhar) </li></ul>
    10. 10. Charges Work! <ul><li>European Environment Agency (EEA) reports that ‘Water consumption by households has actually decreased in all regions of Europe in the past decade. </li></ul><ul><li>This reduction can be directly linked to the water pricing and metering measures put in place to ensure the price of water better reflects its true costs </li></ul>
    11. 11. Sliding Scale <ul><li>‘ Standard’ Access/Use charge incremented according to use </li></ul><ul><li>This would drive our efforts to contain water use and fund infrastructure roll out. </li></ul><ul><li>See: </li></ul><ul><ul><ul><li>Aurora, Colorado </li></ul></ul></ul>
    12. 12. Aurora, Colorado <ul><li>2000-2005 severe drought </li></ul><ul><li>2002 Introduce a sliding scale of rising charges – with a five-fold spread between the cheapest and most expensive block. </li></ul><ul><li>This subsidised the availability of ‘smart meters’ for households that showed them how much they were using as they used it </li></ul>
    13. 13. Aurora II <ul><li>Provided rebates for water-efficient indoor appliances. </li></ul><ul><li>($100 for one low-flow toilet to $400 for one water-efficient washer and two dual-flush toilets.) </li></ul><ul><li>Almost immediate reductions in total annual deliveries of 8 per cent and 26 per cent in 2002 and 2003 respectively relative to the 2000-2001 period. (Comhar) </li></ul>
    14. 14. Commission on Taxation <ul><li>Recommends that water charges be introduced. </li></ul><ul><li>Water charges should come in two types: Flat rates for those without meters, and </li></ul><ul><li>Volume-based rates for those with meters. </li></ul>
    15. 15. Commission on Taxation II <ul><li>If flat rate set at approximately the average volume-based rate, then a substantial fraction of the population would have a reason to install a meter. </li></ul><ul><li>If the flat rate is then adjusted to the average volume-based rate OF THOSE WITHOUT METERS, meters will soon be installed everywhere. If not, there will be a subsidy flow from those who save water to those who do not.(Tol) </li></ul>
    16. 16. € 175 Flat Rate Fee <ul><li>Not ideal...Does not incentivise conservation. </li></ul><ul><li>But </li></ul><ul><li>It established User Pays Principle </li></ul><ul><li>Vital underpinning to a National Water Authority model </li></ul>
    17. 17. National Water Authority I <ul><li>Needs a Revenue Line </li></ul><ul><li>As a Semi State it will be able to raise funds for infrastructure investment </li></ul><ul><li>Can achieve Scale </li></ul><ul><li>Strategic Vision </li></ul><ul><li>Cheaper storage of vital equipment </li></ul><ul><li>Separation of resources between fresh/waste water maintenance/operations </li></ul>
    18. 18. National Water Authority II <ul><li>Ireland as a whole is no bigger than any of the water Companies in the UK </li></ul><ul><li>As with all infrastructure companies – size matters </li></ul><ul><li>Scale also allows for prioritization of investment to locations with the greatest return potential </li></ul>
    19. 19. National Water Authority III <ul><li>Must be on as regulated asset base model a la BGÉ or ESB </li></ul><ul><li>Could bypass bureaucratic challenges to get approval for a water investment programmes </li></ul><ul><li>NWA must also ensure that resources are prioritised </li></ul>
    20. 20. Conclusion <ul><li>There is a good case for a National Water Authority </li></ul><ul><li>Judicious use of incentives will drive take up and roll out of meters </li></ul><ul><li>Implement the Commission on Taxation Recommendations... And secure cost savings from scale! </li></ul>
    21. 21. Questions <ul><li>[email_address] </li></ul><ul><li>01 400 4308 </li></ul><ul><li>086 819 8766 </li></ul>

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