Household charges will be a fundamental feature of the future funding model for water services, according to Minister for the Environment Phil Hogan.
Speaking at the Institute of International and European Affairs (IIEA) in Dublin this morning, Mr Hogan said providing households with unlimited qualities of water free of charge was not sustainable.
"The Exchequer does not have the capacity to fund capital programmes at existing levels. Other ways of funding programmes through charges or access to the financial markets must therefore be considered," he said.
Mr Hogan said reform of the water services sector was one of the most important challenges facing the Government. He said the present funding model for water services included three main sources of revenue: the Exchequer; local authorities' own resources and income from charging the non-domestic sector.
"New approaches are required to ensure a quality water service into the future…Water charges will be a fundamental feature of any future funding model," he said.
Mr Hogan said Ireland had a very diverse water supply system, with over 950 public water supplies producing over 1,600 million litres of water daily through a network of 25,000km of pipes.
In comparison to other EU member states, Ireland had better than average water quality but continued improvements were needed.
Mr Hogan said Government had provided €435 million in Exchequer capital for the water services programme this year. The funding available for next year would depend on the outcome of the Government's review of capital programmes, he said.
The programme for government had proposed the establishment of a new State-owned water company, 'Irish Water'. The EU-IMF programme of support committed Ireland to undertaking an independent assessment of the establishment of a water utility. PricewaterhouseCoopers were appointed to undertake the assessment.
"I can confirm that PwC have now submitted the first phase of their assessment to my Department and I will be bringing proposals to Government very shortly in relation to this matter," Mr Hogan said.
He said Ireland was the only one of the Organisation for Economic Co-Operation and Development (OECD) countries which did not charge for water services.
"The OECD has stated that this policy gives households no incentive to save water. The OECD have also concluded that metering is unequivocally the fairest way to charge for domestic water usage, and it incentivises households to use water sparingly."
