Privatisation and corruption at NI Water

A Public Accounts Committee review has identified 73 PPP (Public Private Partnership) contracts awarded by NI Water where rules regarding competitive tendering were not followed, worth £28.4 million in total. The review revealed contracts that were signed with private companies with close links with senior managers at NI Water, that were often repeatedly renewed without review and that featured consultants receiving lucrative payments.

A deal was done with “Contracting Out”, for example, a company headed by a senior consultant adviser to NI Water that involved paying over £100,000 of public money for 130 days’ work done by the firm. This same consultant was also recommended to receive a 6% “success fee” on “savings” identified of £23 million on another contract, or over £1.3 million in total. This was described by Paul Priestly, accounting officer at the Department of Rural Development as “not unusual”.

This is the latest in a long list of scandals linked to mismanagement and corruption at NI Water that have emerged since it was established as a GoCo (government owned company) in 2007. In 2008, for example, NI Water overestimated its forecasted revenue by £20 million, resulting in every household having to pay an extra £30 on their water bill. Then Chief Executive, Katherine Bryan, was forced to resign, but not before receiving a massive £266,000 golden handshake.

The Public Accounts Committee session followed the dismissal in March of four directors of the water service, including Chairman Chris Mellor, by DRD Minister Conor Murphy. These bosses had received more than £500,000 between them in bonuses and fees in just three years. It was only however when stories of suspected corruption began to appear in the media that the Minister, Conor Murphy and the DRD decided to sack the four board members.

Mellor himself states,  “I would also point out that at the end of my first three-year term as chairman of NI Water I was reappointed for four years by Minister Murphy, who told me personally ‘it was well deserved’.” He also stated in his defence that, “we achieved the efficiency targets set by the minister”. This “efficiency” has resulted in two thirds of the workforce being sacked since part-privatisation, part of the well oiled strategy of running down services to make them more appealing for profit hungry investors when fully privatised.

In fact, in the case of NI Water, it is not hard to expose the neo-liberal myth that greater private sector involvement in the public sector promotes greater “efficiency”. This month, for example, NI Water announced it will have to replace a major section of the water main it laid two-and-a-half years ago near Limavady because the pipes fitted were the wrong size. This will cost an additional £600,000 in public funds and result in further needless disruption to the local community and economy.

MLAs will deliver their verdict on this latest NI Water scandal in the Autumn, but the five main parties are all in reality united in support of privatisation and the Public Private Partnership (PPP) gravy train. Contracts should not be awarded to private companies who make profits by paying lower wages and running down services and all existing contracts should be immediately terminated. This work should remain within a properly funded water service brought back into full public ownership under the scrutiny and control of ordinary working people.

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