Report of the Local Government Efficiency Review Group

10.3.16 The river basin management approach does not preclude any possible
future decision to establish new national level structures if justified on cost
and efficiency grounds. Indeed, in order to implement Government policy
on water charges, consideration should be given to the establishment of a
dedicated agency for metering and regulation of prices.
10.3.17 The Group recognises the steps by the Department of the Environment,
Heritage and Local Government in aligning the inspection regime operated
by local authorities under the Nitrates Directive with the broader inspection
role undertaken by the Department of Agriculture, Fisheries and Food
(DAFF) inspection staff. Some 1,500 nitrates inspections were completed
this year by DAFF inspectors for local authorities. There appears to be
considerable potential for improved efficiency under this arrangement given
the expertise and extent of information available to the DAFF. The Group
believes that extension of this arrangement should be explored further.
10.3.18 There are a number of other possible operational cost savings in the short
to medium term in areas such as water conservation, installation of chlorine
monitors and alarms, use of Design, Build and Operate (DBO) contracts,
energy efficiency, and a shared service approach to laboratory services.
10.3.19 Investment in water conservation results in savings in operational costs and
the consequent deferral of capital spending. The National Water Study
estimates the economic level of leakage (point at which investment in new
capacity is preferable to continued network improvement) is about 25%.
This is significantly below the unaccounted-for-water level in most counties.
The increased investment in mains rehabilitation provided under the Water
Services Investment Programme 2010-2012 will take time to deliver
operational savings. However, there is evidence from early investment, that
active leakage control in areas with relatively high unaccounted-for-water
and high production costs is more than self financing.
10.3.20 Chlorine monitors and alarms have been installed in nearly all public water
supplies allowing the remote monitoring of these facilities by technical staff
and reducing the need for caretaker cover at all sites. The Group
recommends that this approach to remote monitoring for scheme
management should be extended to all plants where it does not exist. This
should lead to an operational saving, in terms of reduced over-time
payments.
10.3.21 The Group suggests that continued use of DBO and bundling of operation
and maintenance contracts can also deliver efficiencies. As DBO contracts
are performance based with contractual guarantees and are also based on
the whole life costs, they provide the opportunity to achieve a more efficient
outcome than traditional procurement. Experience indicates that the
operational costs tend to be 10-15% lower than the public sector benchmark
for the particular plant.
10.3.22 Potential for savings on input costs should be examined further in areas
such as energy efficiency, and revising operational controls to reduce
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