There have been calls for the Dublin parliament to be recalled after a European Union agency indicated the government tried to manipulate Irish Water to cheat EU funding requirements.
The decision means that Irish Water is not considered to be independent of the 26 County state’s finances by the EU’s statistics agency, Eurostat, and the utility can’t be kept off the government’s balance sheet for funding purposes.
Failing to meet that requirement means that the half a billion euro spent on the agency must now be included in national debt.
Eurostat said that Irish Water was part of a confused structure that ultimately became controlled by the finance and environment ministers. The fact that many households had refused to pay their “water bills” was cited among the grounds for the calculation, as well as their analysis that the company was charging for services provided using local government assets and employees.
It has emerged that even if every household in the country paid their charges on time the hated utility would still have to be funded by the State and would still not qualify as self-sustaining under EU rules.
Sinn Fein finance spokesman Pearse Doherty said figures released by Eurostat found the company has collected just 27% of its revenue from customers based on its measurements. Mr Doherty said the government had been left with “egg on its face” and that it was money down the drain.
He added: “The Eurostat letter shows Minister Noonan and other Government ministers have been blatantly misinforming about the true nature of the decision.
“In contrast to the Government spin that Irish Water is at 48% of the required 50% test for revenue raised independent of Government backing, Eurostat states clearly, ‘If more realistic or prudent capital costs were considered, the ratio would then fall to 27%, which is a very low ratio...’
“This is a hugely important statement that shows Irish Water falling far short of being considered ‘off book’.”
The TD said the EU accountants had not been “fooled by the nod and wink approach” of the Coalition.
He added: “This report is a damning attack on the Government’s incompetence and once again shows their sums simply don’t add up.”
Deputy Doherty has said that the government’s whole argument against Sinn Fein’s plan to abolish Irish Water is now gone and he called on Enda Kenny scrap Irish Water and water charges.
Fianna Fail’s environment spokesman Barry Cowen described Irish Water as the “single greater incompetence on behalf of this government”.
Large-scale protests against the charges are due to resume later this month.
Meanwhile a number of opposition TDs - including his former Labour colleague Tommy Broughan - have said it’s time for Environment Minister Alan Kelly (pictured) to resign.
Kelly had “proved himself to be a complete failure on this (and other) issues and I’m calling on him to do the right thing and hand in his resignation,” Broughan said, in a strongly-worded statement.
Speaking about the ruling, Finance Minister Michael Noonan insisted there was “no crisis” in government and its budget plans would not be affected.
Minister for Health Leo Varadkar said the the failure of Eurostat to classify Irish Water as an independent entity, was a “minor setback” and the agency was “still a work in progress”.
“What’s gone against us is the way we account for it in public accounts and as I say that can change next year. As you know 48 per cent of people have paid already and I do think that will rise.”
But the government’s determination to pursue a lost cause rang alarm bells for many. Seizing on the political fallout, Sinn Fein held a second press conference in as many days to attack the Coalition.
Sinn Fein deputy leader Mary Lou McDonald echoed said saying it was “notable” that the Eurostat results were published when the Dail was in recess.
Ms McDonald also said the Public Accounts Committee may need to investigate the latest Irish Water controversy.
“There are serious questions to be asked in respect of the spending of public money,” she said.
She added: “The longer the government is seized in a state of denial the more likely the need for a Public Accounts Committee involvement.”