14 January 2014 Go back to News
Bord Gáis expertise to save €100m during Irish Water set up
Irish Water set up was fully scoped and all costs approved in advance
Irish Water today told the Oireachtas Joint Committee on the Environment, Culture and the Gaeltacht that Bord Gais expertise has shaved close to €100 million from the set up bill for Irish Water.
Irish Water executives told the Committee that the set-up costs for a brand new national utility reaching into and serving every home on the public water system were necessarily large, and so it was a priority to manage those costs.
“Between now and 2021, Irish Water will save the Exchequer over €2billion – which is a fraction of the set up costs,” said John Tierney, MD of Irish Water. “The set up costs could have hit €250million. Instead, the bill is €150million, thanks to the Government decision to set up Irish Water within Bord Gáis and give us access to Bord Gáis’ expertise.”
• Irish Water comprises a team combining the utility competence of Bord Gáis with the water expertise within the Local Authorities and DECLG.
• Systems, processes and capabilities were in place from 1 January 2014 to take over €11 billion of water assets.
• The approach to programme/budget/resourcing and staffing, was rigorously examined and approved by NewERA and the relevant Government departments including the DECLG.
• Bord Gais made it clear from the outset that specialist external expertise would be required in line with the standards adopted in utilities worldwide for the creation or upgrade of major IT platforms, systems or processes. This skill set is completely different from the skill set required to run a utility on a day-to-day basis. IBM, Accenture, Ernst & Young and KPMG were appointed following rigorous tendering processes. Their appointment was approved by DECLG.
The final cost for specialist services will be:
- IBM €44.8 million
- Accenture €17.2 million
- Ernst & Young €4.6 million
- KPMG €2.2 million
• The systems will deliver minimum savings of €2billion to the Exchequer by 2021.
- Set up costs equate to 1.6% of the Industry estimated current asset value of €11bn
- Represent a one off cost of c€100 per customer, or €5 per annum over 20 years
• Price control documents from the UK indicate:
- Severn Trent Water expects to spend £101 million to upgrade its IT systems
- Yorkshire Water has budgeted £110 million spend on IT systems in 2010-2015
- Thames Water installed a new WAM system in 2011 at a cost of £150m
• The Irish Water Programme is delivering on time and within budget.
• Irish Water will deliver:
- Significant quality improvements in terms of customer service quality and network quality, integrity, and efficiency
- Substantial efficiencies in the future