IRISH WATER’S €20K A DAY ON CONSULTANTS

And that’s on top of John Tierney’s infamous €86m

IRISH Water spent almost €20,000 per day on consultants in the first eight months of 2015 – and that’s on top of the €86m it initially budgeted for external help to set up the company.

There was controversy two years ago when Irish Water CEO John Tierney let slip that €86m of the €172.8m setup costs for the utility was being spent on consultants.

Crucially, in 2014 Mr Tierney insisted those costs would fall once Irish Water began ‘hiring in’ expertise. But the company is continuing to shell out millions of euro

on consultants. The company calls these fees ‘ongoing costs’ and insists they are different to their ‘establishment costs’.

However, the figures involved are substantial: figures released to the Irish Mail on Sunday under the Freedom of Information Act, show that the fees break down to some €9,000 a day in 2014 – and almost €20,000 a day for the first eight months of 2015.

In January 2014, John Tierney told RTÉ’s Seán O’Rourke that the outlay on consultants had a built-in end date.

‘Once it establishes itself as a business, obviously the establishment is still ongoing and will be until the end of 2015, but Irish Water as a business will have very limited expenditure on consultancy because we have hired in directly the

‘Cash that could have been spent on infrastructure’

expertise to… bring about the efficiencies associated with consultancies,’ he said.

He later told an Oireachtas committee that Irish Water would spend about €86m on consultants, contractors and legal advice as part of an overall budget of up to €180m to establish itself.

At the time, the figures shocked a nation trying to adjust to austerity.

Now a Freedom of Information request submitted by the MoS has revealed that Irish Water’s spending on consultants – apart from the €86m setup costs – has more than doubled. The FOI documents show that Irish Water has spent €8.1m on consultants since January 2014, not including the €86m setup figure.

The additional €8.1m – which represents 10% more than the consultant costs previously known about – covers the 20-month period from January 2014 to August 2015. The company has denied this figure is an overspend and insisted it is merely part of its ‘ongoing costs’ which are separate to its ‘establishment costs’.

And this ‘ongoing’ spend on consultants shows no sign of slowing down. The company spent €3.32m in ‘ongoing’ consultant costs in 2014, which breaks down as €277,175 per month.

But it spent a further €4.77m between January and August last year, already surpassing 2014’s total in just eight months. This breaks down as €597,458 per month, or more than double the previous year’s monthly spend.

This breaks down to €9,112 a day in 2014 and €19,669 each day to the end of August 2015 – the latest date for which figures were available.

The figures also show that as the spend on consultants as part of the setup of Irish Water decreases, the ‘ongoing’ spend increases to take its place.

For example, the total average monthly spend on consultants in 2014 – combining ongoing and establishment – was €1.46m.

The same figure for last year is remarkably similar at €1.31m – this is despite the ongoing costs more than doubling and establishment costs dropping.

This appears to cast doubt on Irish Water’s claim that ‘ongoing costs’ and ‘establishment costs’ are not related to one another. The total spend on consultants – combining both ‘establishment’ and ‘ongoing’ costs – is an astounding €28m since the start of 2014. However, it remains unclear what the difference between ‘establishment costs’ and ‘ongoing costs’ is.

For example, the documents released under FOI state that A&L Goodbody was paid about €25,000 in July 2014 for legal services as part of the establishment of Irish Water. A&L Goodbody was also paid an additional €41,000 in the same month, also for legal services, and this spend is listed under ‘ongoing costs’. A company spokesman said: ‘In addition to the setup costs, Irish Water has required the services of third-party external service providers as part of the ongoing operation of a national utility.’

She argued that the company needed to call on third-party expertise – and that this was normal for a company of its size.

‘We have 1.52 million domestic and approximately 250,000 nondomestic customers, more than 7,000 asset sites, 150 major and more than 200 minor infrastructure projects at construction stage with a similar number at planning and procurement stage.

‘As such a large utility we could require advice, technical assistance or third-party support in a wide range of areas at any given time,’ she said.

Other consultants being paid by Irish Water include Arthur Cox & Co., Ernst & Young, and RPS Engineering Services, where Irish Water spokeswoman Elizabeth Arnett worked prior to her Irish Water role.

Irish Water declined to say whether it expected to continue spending €600,000 per month on consultants this year and beyond.

Fianna Fáil environment spokesman Barry Cowen said: ‘These revelations are truly shocking and further highlight how Irish Water is little more than a super-quango.

‘The Government tried to assure us that the setup costs of Irish Water would be minimal, but these figures paint a different picture.

‘To date, the Irish taxpayer is €800m worse off as a result of the establishment of Irish Water.

‘This is money that could have been invested in water infrastructure in order to stop leaks and conserve water.’

Contacted this week an Irish Water spokeswoman argued that it was unfair to focus on one element of its expenditure without looking at the big picture. A spokeswoman said its overall spend had reduced by 7% in the last year and would continue to drop.