Hogan says he did not know how much Irish Water spent

Minister for the Environment Phil Hogan has insisted he was unaware of the level of money spent by Irish Water on consultants even though the new semi-state kept his department fully informed of all the costs it incurred.

Irish Water said yesterday it would spend a total of €85 million on consultants and external contractors by the middle of next year to fully establish the company, but argued before an Oireachtas committee that it was getting value for money.

Mr Hogan and and his junior minister Fergus O’Dowd are facing mounting criticism over their level of knowledge about the spending and are likely to be called before the Oireachtas environment committee to answer questions on the issue.

Speaking on RTE's Prime Time last night, Mr Hogan said he doesn't "micro-manage a state company or a semi-state company".

Irish Water chief executive John Tierney said the Department of the Environment was kept fully abreast of how it intended to spend €180 million, including the consultancy costs, in establishing itself. However, Mr Tierney said he never had a conversation with Mr Hogan about the level of spending on consultants.

The Minister has stated that he was aware of the overal level of establishment costs for the utility company but did not know the exact level of detail on consultants.

Mr O’Dowd, the junior minister with responsibility for the NewEra project, said he did not know about the level of consultancy spending until Mr Tierney revealed during a radio interview that Irish Water had spent €50 million during its first year of operation.

Irish Water yesterday said it will spend a total of €85 million on external consultants and contractors by the middle of next year and Mr Hogan said the money was going towards software and hardware, and not just legal and consultancy fees.

Mr Tierney said Irish Water will “absolutely not” exceed €180 million it estimates is needed to establish itself but said the Department of the Environment was “informed” of the outcome of the company’s procurement process.

The Commission for Energy Regulation (CER), which oversees Irish Water, said it knew about the overall spending on establishment costs, but was not aware of the exact detail of the planned €85 million spend on external consultants. It gave the overall establishment costs of €180 million initial approval, but plans to carry out a more detailed examination in the coming weeks.

Mr Hogan said he referred the costs to CER for its assessment.

Michael McCarthy, a Labour TD for Cork-South West and the chairman of the environment committee, said Mr Hogan and Mr O'Dowd would be called before his committee.

“We haven’t officially done so yet but that will be our next move in order to establish who knew what and when and to close of the discussions about the establishment of Irish Water.”

Mr O’Dowd said he “would have no problem going before the committee”, while Mr Hogan’s spokesman did not reply to queries on the matter last night.

Irish Water, as well as the CER and Department of the Environment and Department will appear before the Public Accounts Committee (PAC) today. PAC members say they will focus on the oversight and accountability put in place around Irish Water.

It also emerged that all staff in Irish Water, apart from Mr Tierney, are eligible for performance related bonuses but their pay will be frozen until 2016.

The new semi-state will have around 500 staff in place by May of this year.