Background and Policy Objectives
3.The Water and Sewerage Services (Northern Ireland) Order 2006(1) (the 2006 Order) came into operation on 1 April 2007 providing for an "undertaker" to provide water and sewerage services in Northern Ireland. Northern Ireland Water Limited (NIW) – was appointed as the sole water and sewerage undertaker for Northern Ireland. The company is 100% owned by the government (with the Department for Regional Development (DRD) as the sole shareholder). It took over from the DRD's Water Service Agency on 1 April 2007.
4.Under Article 213(3) of the 2006 Order the Department has the power to make grants to the undertaker equal to the amount of discounts provided to consumers in the initial period. The initial period is 3 years from the coming into operation of the 2006 Order (Article 213(4)) – the period during which the previous Administration intended to phase in new water and sewerage charges. This provision runs out on 31 March 2010 which means that DRD will no longer be able to make these subsidy payments to NIW.
5.Although no decision has as yet been taken about the future funding of water and sewerage it is essential to ensure that subsidy can be paid to NIW beyond the initial three year period set out in the 2006 Order. In light of the Executive’s decisions to defer domestic water and sewerage bills the payment of this subsidy to NIW is essential to the financial stability of the company. If DRD did not continue to provide these subsidy payments, NIW would be unable to fund the delivery of water and sewerage services.
6.The aim of this Act is to ensure that DRD can continue to make these subsidy payments to NIW for a further three years.