Executive may subsidise NI Water

NI Water over estimated its potential revenue

The Stormont Executive may be asked to pay out millions of pounds to subsidise Northern Ireland Water, which is facing a shortfall in its revenues.

This is just one option under consideration after it emerged NI Water had made a miscalculation in its projected revenue.

The shortfall is estimated to be £13m this year and £20m next year.

This prompted concerns that households would have to pay an average of £30 extra when bills come in next year.

The problem was discussed on Wednesday when the Stormont regional development committee was briefed by executives from Northern Ireland Water and the regulator, Ian Osborne.

The meeting, held behind closed doors, is understood to have been robust.

The Consumer Council rejected any suggestion that customers should have to pay extra to make up for a multi-million pound revenue shortfall.

Chief Executive Eleanor Gill said: "The Consumer Council is absolutely dismayed that we are already being dragged in by Northern Ireland Water to look at options to bail them out.

"This is when we don't even have an identification of how much it is, how this problem happened and when it was discovered.

"More importantly, if we can get the basics of how much we need to collect so wrong, what other risks might be lurking."

'Absorb the shortfall'

Liz Young of Northern Ireland Water said it had been "working through options to try and mitigate any risks to all of our customers".

She added: "We are very sensitive of the needs, in particular of domestic customers, if charges go ahead next year.

"We have been working with the department since last week looking at options and how we can lessen the shortfall, without having an impact on customers."

BBC Northern Ireland political correspondent Martina Purdy said: "Sources suggest that a range of options from Northern Ireland Water are under discussion.

"This not only includes households directly paying out £20m when bills are introduced next year, but asking the executive to subside all or part of the funding gap.

"That could cost £12m in 2009. It's also possible Northern Ireland Water will have to use its own resources to absorb the shortfall.

"A more long-term solution could include having private sector customers paying more, although this poses difficulties under current regulation."