Could our water be worth 64 billion euro? A long post but John Doyle put this comment up and def worth a read as it goes through some facts & figures as well as the potential revenue that our entire water could actually be worth. Key message: Do not allow water to be privatised. John Doyle THE FIGURES In Ireland, water authorities supply 1.6 million ltrs of water every day for users. That equates to 584,000 million ltrs annually. (Engineers of Ireland Report 2011) The average daily consumption per person is 150 ltrs. That equates to total personal consumption of 251,207 million ltrs annually. (Census 2011 and other sources) Of the 584,000 million ltrs supplied, 41% is “lost” through deteriorating infrastructure. That’s 239,440 million ltrs wasted. Leaving 93,353 million ltrs for commercial consumption. We have a population of 4,588,252 people. There are 1,658,243 households. (Census 2011) 251,207 million ltrs divided by 1,658,243 households equates to a usage figure of 151,490 ltrs per year per household. A family with two children under the age of 18 will get total allowances of 72,000 ltrs. (30,000 household allowance and 21,000 for each of the children) The amount of water billable by Irish Water will therefore be 79,490 ltrs. At € 4.88 /000 ltrs the water bill will be € 388. The total revenue to Irish water from customers will therefore be € 643 million pa. Irish Water will also get € 351 from the government for the water that is supplied ‘free’. This adds up to € 583 million pa and will be payed from the € 1.2 billion that you will STILL be paying to the government for water through general taxation including the 5% on motor tax and 2% on VAT which they have not given you back despite setting up a company to make you pay for water… Irish Water total revenue then will be … € 1.2 billion … exactly the figure that the government says it costs to supply water (Dept of Finance Budget estimates. € 715m operating cost and € 500m Capital Expenditure) That’s an important phrase to remember … Irish Water and the government clearly say that they are supplying your water AT COST! In 2015 the public will therefore pay € 1.2 billion to the Irish government (no change to taxation which would have actually transferred the taxation revenue to Irish Water) … PLUS … € 643m paid directly to Irish Water, excluding revenue from Call Outs and other Service Charges. So when the government said that people have to pay for water, what they have actually done is increase the price of water by 50%. PRIVATISATION When Irish Water is privatised a number of things will happen. Firstly, The government will no longer be able to provide a subsidy to a private company for the ‘free’ water you have been getting in allowances. The new owner’s (VEOLIA) shareholders won;t be happy with their company supplying product free-of-charge to customers so the cost of the subsidy will IMMEDIATELY be passed to the consumer. Your bill of € 388 will now be a bill of € 739. but that’s only half the story… The second thing that happens is that VEOLIA will have no interest in supplying a product AT COST! Remember? It costs € 1.2bn to supply the water, and the company wil be getting € 1.2bn in revenue. That means only one thing … cost cutting and price increases. Shareholders will be looking for decent return on their investment … anything from 5 to 10%. I’ve no idea what that will mean in terms of retail price but it at 5%, your bill will then be close to € 800. On the cost side, the € 500m that is spent annually on Capital Expenditure by the government (improving the system to make Irish Water a more salable asset) will be cut by the new owners to generate significant increases in profit. That means the user will have to pay for repairs, new installations (new housing estates, factories etc). THE HIDDEN VALUE Irish Water today is a legal entity charged with the collection of tax for the water supplied. When VEOLIA buy the company they won’t simply be buying a company with annual revenue of between € 1.2bn and € 1.3bn (excluding other income from call-outs, service charges and other work), they will have sole and clear rights to the fresh water natural resource of our country. Can we put a figure on that? Yes. We use 2% of our fresh water resources. (en.wikipedia.org/.../Water_supply_and_sanitation...) That is verifiable with some rough math : (584,000 million ltrs supplied to users from a total annual rainfall of 84 trillion ltrs allowing for 50% evaporation etc.) If we use 2% of our fresh water resource, worth € 1.2bn, it means that we are sitting on an unused asset with a value of € 64bn. And remember … that is not a finite asset value like an oil field or a coal mine which can be exhausted. That is an unlimited, inexhaustible ANNUAL REVENUE value of € 64 bn for as long as rain falls on earth. Of course that’s a virtual figure. We could never access 100% of our surface and ground water. However, a company like VEOLIA, which has annual revenues of € 30bn worldwide (the Irish government has annual tax revenue of € 30 bn), has the resources to access potentially 5% of that asset. VEOLIA won’t be buying a company with annual revenue of € 1.2bn from Irish customers, they’ll be buying a company with potential global sales of € 2bn to € 3bn. Demand for water is predicted to increase by 40% up to 2050. 85 % of the world’s population live in the driest parts of the planet and the population of the planet is expected to increase by approx. 3 billion people by 2050. Water will become an even more valuable resource than oil. It is a raw material for a multi-billion euro industry that doesn’t have to be mined, drilled (in Ireland most of our water comes from surface water), manufactured, grown or synthesised. It falls out of the sky. For free. If you owned a business that got it’s primary raw material for free you’d have a very profitable business. Or a very wealthy country. Which would you prefer? When our fresh water rights have been ‘sold’ to VEOLIA, our rights to use our lakes and rivers will be revoked. We will no longer be able to fish or enjoy other activities without permits because we will be trespassing on priivate property. VEOLIA are a corporate entity with no regard for ‘rights’. VEOLIA have significant business interests in Egypt and at this moment are suing the Egyptian government in the courts because the Egyptian government raised the national minimum wage … cutting into VEOLIA’s profits. Irish Water has been setup by the government to do one thing: take more tax from Irish people to pay Bond Holders. Reported previously in the press but requiring confirmation since October: Irish Water will be allowed to retain profits for 6 years before they pass any benefit back to the consumer. That means all revenue can be used to repay the interest on Bond Debt ( € 8 bn in 2015). Once the government have deemed that purpose to have been fulfilled privatisation will be swift and final. Then they will claim they have ‘no power’ to interfere in the operations of a private company. Anet Moore
Posted on: Sun, 26 Oct 2014 13:31:17 +0000
Trending Topics
Recently Viewed Topics
© 2015