What is at the end of the tunnel?

Over the last couple of years NI Water has been vocal in highlighting the economic and environmental crisis facing Northern Ireland as a direct result of the historical lack of investment in our sewer and wastewater networks.

Right now, it’s clear to councils, businesses, private and social housing, hospitality, tourism and environmentalists alike, that the necessary infrastructure isn’t in place for their future plans, nor can it be without a stepped change in investment over the next decade and more; a situation recognised and strongly supported by the Utility Regulator in its Draft Determination on NI Water’s 2021-2027 business plans.

Northern Ireland’s sewerage and wastewater systems are now failing

NI Water’s Chief Executive, Sara Venning, explains: “We are committed to transparency with our customers and stakeholders, we have had to be vocal and will continue to be as the situation becomes more and more critical. The water and sewage services that NI Water provides are not exciting and largely unseen and forgotten; it’s only now, when these services are failing that our politicians have come to recognise just how vital they are to our economy and our environment.

“Historical lack of investment means that many of Northern Ireland’s sewerage and wastewater systems are now failing, essentially they are ‘full’ and are struggling to process the current volumes of sewage, wastewater and trade effluent so that it can be treated and put back safely into the local environment. An increase in the volumes feeding into these sewer systems, will likely overwhelm them causing untreated sewage, trade effluent and wastewater to spill into premises, streets, rivers and onto our shorelines.

“This is the situation right now in major parts of all our cities and in over 100 towns across Northern Ireland, many of which are central to economic growth plans. NI Water is already unable to respond positively to many plans in these areas for much needed new development such as social and private housing, office buildings, factories, hotels etc. The negative impact of our failing sewer and wastewater infrastructure on Northern Ireland’s economy and its environment is all too obvious.

There is a simple solution to this growing crisis

“However, there is a simple solution to this growing crisis, enable NI Water to invest sufficiently in its infrastructure. We’ve often said that NI Water’s current funding model is broken. Could it work? Yes. Has it worked? Not in the last decade. Is it likely to? Well let me explain. NI Water can only invest what the Executive decides to allocate to NI Water from its Northern Ireland Capital Expenditure budget. There is no additional capability for increased investment outside of this mechanism; all of NI Water’s capital investment must fall within the Executive’s allocation. If the Executive decides to allocate a sufficient budget to NI Water, job done, the model works. However, NI Water is just one of many relying on an allocation from the same Northern Ireland Capital budget; so NI Water has to compete against ring-fenced, flagship and other Executive capital investment priorities and our experience for many years has been one of inadequate capital allocations. No other water utility in the UK is required to operate in this way and it is the people of Northern Ireland that are being disadvantaged.

“No other water utility in the UK is required to operate in this way and it is the people of Northern Ireland that are being disadvantaged.”

“The Social and Environmental Guidance for Water & Sewerage Services (2021-27), which sets the Executive’s priorities and level of investment for NI Water over the next six years, states that a constrained budget environment is expected to persist and the actual budget set for NI Water needs to be affordable within the Northern Ireland budget expenditure process.

“So is NI Water’s funding model likely to work going forward? We’ll have to wait and see what the Executive decides to allocate to NI Water.

“We’re often asked for our views on funding models, this is a matter for Government policy, NI Water is ‘model agnostic’, but Northern Ireland needs and deserves a model that is funded.”

Treat this as an absolute investment priority

It’s not just Venning that has strong views about this economic and environmental crisis. Commenting recently on the importance of NI Water’s infrastructure, the Construction Employers Federation stated: “Treat this as an absolute investment priority because the whole economy depends on it, the future growth of the economy depends on it, not just the construction sector, but if we’re to see a vibrant, modern Northern Ireland and if we’re to deliver the councils’ various plans then we need this wastewater treatment network upgraded.”

The Northern Ireland Food and Drink Association said: “To put it really simply, without NI Water there is no Northern Ireland food and drink and we are 100,000 jobs in the Northern Ireland community. The underfunding in NI Water infrastructure will inhibit the growth of Northern Ireland food and drink going forward.”

CBI Northern Ireland added: “When it comes to the business community, foreign direct investment and indigenous companies, they look at a number of things when they are deciding where they are going to put their money and where they are going to invest. Infrastructure is hugely important and all utilities are key components, they are hugely influential in a company deciding to put money into a particular area. If Northern Ireland hasn’t invested in water, and it hasn’t, we have to think about how we get that sustainable funding model for the future, this is a problem that needs addressed. We talk about building back better after Covid, if we’re genuine about that then this does have to be at the top of the Executive’s agenda.”

Perhaps Esmond Birnie, Senior Economist at Ulster University sums it all up: “We have been in a situation for some number of years now in which the level of investment going into the water service sector in Northern Ireland has been both volatile and in most years inadequate. If in the future we really want to say that Northern Ireland is open for business much will depend on whether we are prepared to follow through on devoting enough of our public capital into investing in the water service here.”

The Utility Regulator says it’s needed

Venning concludes: “It’s important that people know and understand the consequences of under-investment in what are probably Northern Ireland’s most vital and fundamental infrastructure systems. The Utility Regulator has now scrutinised our PC21 plans for the 2021-2027 period and in its Draft Determination is recommending circa £2 billion in of capital investment over this period. In its recent briefing to the Committee for Infrastructure the Utility Regulator stated: ‘This money is desperately needed… It’s important that NI Water is funded to deliver this essential service for consumers… The ability to deliver is conditional in having confidence in the budget.’

“So where are we with investment? Well, businesses, councils, economists, environmentalists all know it’s needed, the Utility Regulator says it’s desperately needed, but the Executive has the final decision. Northern Ireland needs it and deserves it, we hope it is light that’s at the end of the tunnel.”

E: PressOffice@niwater.com