From RTÉ One’s Six One last night

Environment Minister Alan Kelly, who is on holiday, spoke to Sharon Ní Bheoláin on RTE’s Six One last night via telephone, following the Eurostat/Irish Water/Exchequer balance sheet brouhaha.

In summary, Eurostat decided, ‘Irish Water is a non-market entity controlled by government and should be classified inside the government sector’ for five main reasons:

1. There has been ‘considerable government control’ over the body, and especially in regards to board appointments and ‘pricing parameters’.
2. Irish Water ‘merely re-organises previously non-market activity carried out by local government, with local government assets being transferred to Irish Water and a large majority of Irish Water staff remaining local government employees’.
3. There has been ‘significant and continuous government funding and support to Irish Water’.
4. A ‘lack of economically significant prices, concerning in particular the capping of fees for households’.
5. The so-called ‘50% test’ – where sales cover at least 50 per cent of the production costs over a sustained multi-year period – has not been met.

Further to this, Mr Kelly said Eurostat’s decision would make no impact at all.

Sharon Ní Bheoláin: “It’s evident that the Government has been putting a brave face on this all day long. They’re saying ‘nothing to be seen here’ but, to the man and woman watching at home, this is really the latest chapter in the omnishambles that has been Irish Water.”

Alan Kelly: “I wouldn’t agree with that at all Sharon. Straight up, this has no immediate impact because in the Spring Economic Statement, we provided for it to be on balance sheet. It doesn’t change anything, it doesn’t change our plans for investment, it doesn’t change the structure of Irish Water and, for that man and woman you speak about, it doesn’t change the charges system that’s in place.”

Ní Bheoláin: “No change from a budgetary point of view, minister. But a sea change from the Government’s position. It wasn’t so long ago that we heard the Tánaiste say that she was confident that the Government would pass this Eurostat test, only today, [Finance Minister] Michael Noonan saying, it was embarrassing. Now do you agree with Michael Noonan?”

Kelly: “I don’t agree with that statement. I haven’t even heard him say it to be honest, but I don’t agree with that statement. The simple fact of the matter is that there’s a number of issues which have been raised by Eurostat. The CSO will actually, I believe, be challenging some of the comments and some of the statements by Eurostat and, by the earliest opportunity, we will be looking to see this reviewed and I believe that, into the future, in 12 months time or so, this should be reviewed and looked at again and I believe it will be cause essentially I believe, in the future, it will be off balance sheet but in the short term…”

Ní Bheoláin: “Can I just…because the Eurostat…minister…”

Kelly: “This has no impact whatsoever.”

Ní Bheoláin: “The Eurostat statement is here and it’s quite stark. It talks about the lack of economically significant prices. It refers to the capping of fees, it’s quite clear that they are of the view that you priced water too cheaply.”

Kelly: “I’ve read their statement and I’ve read their statement in detail, I disagree fundamentally of course with some of the analysis and it’ll be up to us and working through the CSO to challenge that, into the future. They have said that, from a forward-looking point of view, they would look at this again and we’re going to ensure that that happens because, into the future, I believe they should be off-balance sheet but let me just repeat here: this doesn’t change anything. In the Spring Economic Statement, we provided for this. We were prudent as a Government and we provided for this in all our figures, in all our budgetary analysis, all the way out, that this would be on balance sheet…”

Ní Bheoláin: “I want to ask you minister, just before, because time is against us, what will you be bringing to the table when you do go back to Eurostat and ask them to reevaluate their position.”

Kelly: “Well essentially, I think there were a number of points which the Central Statistics Office which is an independent body, they have issues with a number of the comments that have been made by Eurostat and the analysis. Essentially, some of their comments in relation to structure, in relation to the funding model, and also in relation to the role of local authorities, I think they’re all issues that need to be re-looked at. But, ultimately, once Irish Water is bedded down in this country – and I don’t think there is another alternative – in fact I know there isn’t another alternative. Once this is bedded down, I believe this will be off balance sheet. But In the short-term, this decision doesn’t have any impact from a budgetary point of view whatsoever.”

Right so.

Watch/listen back here

Read the Eurostat’s decision here

Previously: Contains Impurities