Irish Water could ease State debt by €3bn

The establishment of Irish Water could give the Government an extra €500 million “leeway” in the 2015 budget, according to Prof John FitzGerald of the Economic and Social Research Institute.

It may also help ease the national debt, by the order of something approaching 2 per cent of gross national product, the economist believes. The creation of the new utility company “has big implications for the State’s budget in 2015,” said Prof FitzGerald, who is working on a paper for the ESRI that will examine the effect of the utility on the national finances.

The criteria under which Irish Water is being established, including the existence of an income stream from water charges that funds its operating costs, mean its liabilities do not form part of the national debt as measured by a number of international bodies, and the bond markets. They also mean that any increased borrowing by the utility for capital investments on water and sewage infrastructure will not increase the national debt. This means the utility could “ramp up” planned investment in water infrastructure without affecting the budget deficit. Sourc: The Irish Times