FIRT PUBLISHED IN THE IRISH MAIL ON SUNDAY ON 05/06/2011
By: Michael O’Farrell
Investigations Editor
THE formal announcement of water charges may only have come this week but behind-the-scenes the gold rush to control and profit from Ireland’s most precious resource has been underway for years.
And already Ireland’s first water millionaires – businessmen who have pocketed millions from commercial water charges – have quietly placed themselves in a position to reap the benefits of the multi-million euro contacts the Government will shortly begin rolling out for domestic meters.
Largely anonymous, they have already netted millions from commercial watercontracts and are now poised to benefit from the €500m installation of 1.2m domestic water meters and the maintenance and customer-care contracts that will follow for decades to come.
Today, the Mail on Sunday reveals the identity of some of those who have already made millions from Irish water.
One of the biggest potential winners is half owned by NTR plc – the company formerly known as National Toll Roads which won the M50 toll bridge contract and then sold it back to the State for €600m in 2009.
The deal, which will see the Government continue to pay €50m a year compensation to NTR until 2020, made millions for NTR and its founder, Tom Roche.
What is not widely known is that Mr Roche could be described as one of Ireland’s first water millionaires. In recent years, NTR has teamed up with the UK’s Anglian Water to form Celtic Anglian Water Ltd (CAW).
CAW completed several waste water infrastructure facilities such as the Ringsend treatment plant before successfully bidding to roll out water meters for commercial premises in Galway in 2006.
In just five years Mr Roche has gone from tolling cars on Ireland’s motorways to profiting from the tolling of the taps in Galway’s businesses. Pretty soon he is likely to be profiting from the water meter that will be installed in your home.
CAW is already a profitable business. In 2008 it paid its shareholders a €5m dividend and posted a further €3m in profits. In 2009 it paid a dividend of €2.1m and posted another €3m profit. In 2010 it posted a profit of €4.5m and paid a dividend of €3.5m.
CAW’s business model was summed up by managing director Mark Driver. ‘It’s water’s time really,’ he told the MoS. ‘Water has been the Cinderella of utilities for a long time. In Ireland we don’t pay for water so there is very little public perception about either its value or how it is managed.
‘Clearly that’s going to change with metering. It surely is the new gold, the new oil, if you like. It’s being commoditised for the first time here,’ he continued.
That’s precisely why many are clamouring to jump on the bandwagon.
As many as 20 new limited companies with the word ‘water’ in their name have registered in recent months. These include businesses seeking to cash in on everything from water meter software to rainwater collection systems. One firm, Chevron Training, has taken 1,000 queries on a watermeter installation course. Fees on similar courses cost up to €1,000.
But the real players have already been in place for years, and are raising their profile via events such as Ireland’s first-ever water meter summit held in Croke Park this week.
Guest of honour was Environment Minister Phil Hogan, who outlined the Government’s plans as he stood beneath a logo of Hydrometer, the event’s main sponsor. Also at the event – and listed as a representative of ‘the GMC Group/ Hydrometer’ – was Shane McCloskey.
Mr McCloskey has virtually no public profile. Nor does his senior partner Gerard McCloskey who founded and owns a majority stake in the firm. But the pair are among Ireland’s first water millionaires and, like rivals CAW, they want to control the water meter just outside your home.
Their company – the GMC Group – built its business doing piping work and civil engineering jobs for clients such as Bord Gais.
But in 2006 it won a €50m contract to install 40,000 meters in commercial premises in Dublin.
Immediately the profits flowed.
In 2007 it posted retained profits belonging to shareholders (who include the McCloskeys and two other shareholders, Patrick Cowley and James O’Gorman) of €13m. By 2008 retained profits had risen to €17m and in 2009 they stood at €23.5m. The GMC Group has renamed one of its firms as Meter Technology Ireland and established a new branded website to promote Hydrometer products.
But when asked about the site Shane McCloskey refused to say anything. ‘I don’t intend to go down that road at such an important stage,’ he said.
Asked why other firms in the metering field were prepared to talk about their business he said: ‘That’s probably because talk is about all they’re able to do.’ And to a degree he has a point. Salivating at the prospect of water charges in Ireland several firms from the UK and Spain have tendered for jobs here before withdrawing.
Those who have been successful and gained a foothold in the market – such as international giant Veolia and CAW – are now preparing for a bidding war.
‘We may tender it,’ said CAW’s Mark Driver of the impending meter installation contracts.
But where the company’s main interest lies is in tendering for what he calls the ‘operations and maintenance work, the call centre, the customer contact, getting bills out, getting money in.’ Like others, such as Veolia, the firm sponsors events where unrivalled networking opportunities with decision-makers are offered.
Through such networking CAW has built up influence of its own in recent years but has stopped short of donating to political parties.
‘I think what you are suggesting isn’t compatible with our business ethics,’ said Mr Driver, who admitted to informal ‘discussions’ with ministers and advisers.
