TÁNAISTE EAMON Gilmore has rejected claims the introduction of water charges will result in the privatisation of water services.

People Before Profit TD Richard Boyd Barrett told the Dáil any revenue-generating tax would become subject to normal competition rules within the EU under treaty regulations.

Mr Gilmore told his Dún Laoghaire constituency colleague, however, there was no point “trying to find a big bad wolf where none exists”.

But Mr Boyd Barrett insisted it was “clear as day” under article 106 of the treaty on the functioning of the EU, that water-metering and charges would result in the privatisation of water.

Quoting the treaty he said: “Services of a general economic interest or having the character of a revenue-producing monopoly . . . shall be subject to the rules contained in the treaties, in particular to the rules on competition.”

Mr Boyd Barrett asked: “How does the installation of water meters decontaminate water or rehabilitate the decrepit pipe infrastructure?”

He said the only effect of meters was to allow the Government to charge people for the provision of water. Mr Boyd Barrett asked the Tánaiste: “Why are you going to waste a year and a half installing water meters instead of putting thousands of people to work rehabilitating our water infrastructure?”

Under the treaty rules, he said, “private companies will be able to take this Government to the courts if it does not allow for open private competition in the area of water services, if it becomes a revenue producing service”.

But Mr Gilmore said one of the main purposes of the meters was to conserve water. “The Government’s decision is on the basis that water will remain in public hands. That is the way in which the legislation, which will establish the water company, will be framed.

“Water is not being privatised,” he said. “It’s not going to be privatised and there is no question whatever of this.” He pointed to the contamination of water in Galway and questions about the adequacy of supply to the greater Dublin area.

“We have to make provision so that we can ensure there is an adequate supply of water delivered to households and businesses over the next 20 years or more,” said the Tánaiste.