1. Annual Conference October 2011 Water Services Training Group 15 th Annual Conference Water Services in Ireland – Organisational modernisation and new challenges 13 th October 2011

2. Annual Conference October 2011 Irish Water Independent Assessment – Overview of Current Provision and Options for Reform; International Models Dr Cormac McCarthy Water Strategy & Infrastructure Consultant McCarthy Strategy & Mgt Ltd PwC Pat Kelleher Director, PwC

3. Background to the Study  Programme for Government  EU/IMF progress reviews  Study awarded to PwC  In association with McCann Fitzgerald  Started work mid June 2011, final report soon  Work in progress  Overall economic/fiscal context  Desire for long term view Annual Conference October 2011

4. Extract from the Terms of Reference The Programme for National Recovery 2011-2016, indicates that the Government will create Irish Water, a new State company that will take over key water/waste water functions from the 34 existing local authorities. This independent assessment, will guide the implementation of this strategy, identifying the optimum role and functions of the proposed company. Against the backdrop of the Government decision to establish Irish Water, the assessment should determine the most effective assignment of functions and structural arrangements for delivering high quality competitively priced water services to customers (domestic and non-domestic) and for infrastructure provision. The study will be undertaken in two parts. Part I to identify the optimum organisational structure and Part II to examine in detail the legal, financial and organisational issues together with an implementation timetable. Annual Conference October 2011

5. Methodology  Set the Context  Assess current provision of services, SWOT analysis  Describe selected relevant international models  Define Options for Reform  Consultation  Develop Evaluation Criteria  Evaluate Options  Recommend Optimal Arrangement  Implementation Issues Annual Conference October 2011

6. Overview of Current Provision of Water Services  Legislative Framework  Regulation  Leadership & coordination  Operations  Asset Management & Capital Programme  Customer Service & Billing  Finance  Staffing  Marketing & Communications  MIS/IT Annual Conference October 2011

7. Current Provision Annual Conference October 2011

8. Regulation Technical/Environmental Regulation Technical/Environmental Regulation EPAEPA Changing role of Local AuthoritiesChanging role of Local Authorities Drinking waterDrinking water WastewaterWastewater RBMPRBMP Economic Regulation Economic Regulation Customer Voice Customer Voice

9. Strengths & Weaknesses  Local aspect, close to customer/ consumer  Experienced workforce, familiarity with assets  Track record in delivering capex  Mobilise resources in times of need  Accountability Fragmentation (34 Local Authorities) and benefits of scale Fragmentation (34 Local Authorities) and benefits of scale Historic under investment in assets Historic under investment in assets Funding model Funding model Matching Funds Matching Funds County boundaries vs River Basins County boundaries vs River Basins Non-domestic water charges Non-domestic water charges Annual Conference October 2011

10. Two Basic Options for Reform ‘And Variants thereof’ A water company which would be a self-financing water utility in a regulated environment, responsible for operation, maintenance and investment in all water services infrastructure, customer billing, charging; and A company charged mainly with investment in the sector (strategic planning, delivery of projects of a regional/national priority, national metering programme) with local authorities operating as agents of the company, retaining their operational responsibilities and for delivery of smaller scale investment. Annual Conference October 2011

11. International Examples  Scottish Water  England & Wales Water Sector  Northern Ireland Water  Germany Berlinwasser  Models of PPP from France  Netherlands – combined water and roads ministry  South Africa – Johannesburg Water  Flemish Region Wastewater  Flemish Region – Pidpa Water  Australia - Non metropolitan New South Wales  Bulgaria – Sofia Water Annual Conference October 2011

12. Non Metropolitan New South Wales NSW outside of Sydney NSW outside of Sydney Huge land areas, under populated, water resources under stress Huge land areas, under populated, water resources under stress Similar process of consideration of reform Similar process of consideration of reform Able to contrast our methodology with other recent study Able to contrast our methodology with other recent study

13. Flemish Water – Pidpa Intercommunal water company serving multiple municipalities around Antwerp Intercommunal water company serving multiple municipalities around Antwerp Mixed shareholding including participating municipalities and AWW Mixed shareholding including participating municipalities and AWW Clear corporate identity Clear corporate identity Free allowance for water Free allowance for water No free allowance for wastewaterNo free allowance for wastewater Standing chargeStanding charge

14. England & Wales Mid 1970’s Regional Water Boards Mid 1970’s Regional Water Boards River Basin structuresRiver Basin structures Early 1980’s – failed attempt at privatisation Early 1980’s – failed attempt at privatisation 1989 Major Reforms 1989 Major Reforms Privatised statutory water companiesPrivatised statutory water companies Independent Economic RegulatorIndependent Economic Regulator National Rivers Authority/EPANational Rivers Authority/EPA Major focus on asset managementMajor focus on asset management

15. Scottish Water 1996 Transfer from municipal function to three regional authorities 1996 Transfer from municipal function to three regional authorities 2002 Merger of three regional authorities to single national structure 2002 Merger of three regional authorities to single national structure Independent economic regulator Independent economic regulator Customer representationCustomer representation Significant efficiency gains Significant efficiency gains

16. Summary  Context  Current provision of services  Strengths and weaknesses  Consultation  Models for Reform  International models  Study is ongoing Annual Conference October 2011