Hi , apologies for sending this so late, have been having some e-mail problems.

Please see statement

below re our meeting with Conor Murphy today, as discussed.

Kind regards

CONSUMER COUNCIL STATEMENT FOLLOWING MEETING WITH CONOR MURPHY, REGIONAL

DEVELOPMENT MINISTER.

1 September 2010

The Consumer Council Chief Executive and Chair met today (1 September) with Minister Conor Murphy to put
their questions, concerns and demands to him following recent revelations about the handling of an
independent review of Northern Ireland Water’s (NI Water) contracts issuing practices.

Among the Consumer Council’s questions were:

* How can the Minister convince consumers that actions taken were in the public interest, rather than as
result of a power struggle within NI Water?
* Why did DRD’s shareholder unit – which has responsibility for making sure NI Water spends public money
appropriately – not spot issues with NI Water’s awarding of contracts?
* Has the confused, hybrid status (NDPB/GoCo) of NI Water contributed to the procurement failures?
* What are the Minister’s intentions now regarding the status, governance, accountability and regulation of
NI Water and how will he guarantee there is adequate, independent challenge on behalf of consumers?
* What criteria does the Minister intend to use in the appointment of Board members to ensure they are
focussed on building consumer confidence?
* Why was information purposefully withheld from the Consumer Council in direct breach of the Partnership
Agreement that exists between the Department, NI Water and the Consumer Council?
* What actions will the Department take to restore consumer trust and confidence?

Consumer Council Chief Executive, Antoinette McKeown said: “The Consumer Council has retained a very
clear focus on the misspent millions by NI Water and its lack of accountability when spending public money. We
have always supported the action of bringing to light a situation where contracts were being issued without
going out to competitive tender. However, recent revelations left us questioning whether we had been misled.
We need to assure ourselves that actions were taken and will be taken in the public interest.

“The Consumer Council has been fulfilling our role in representing water consumers in Northern Ireland since
2002. We raised issues in 2007, through the Independent Water Review Panel (IWRP), which are relevant to
this investigation, namely the level of scrutiny in place for transactions made by NI Water under £1million and
that we were concerned too that there was no indication of the process DRD would follow in making a decision
to approve or reject procurement proposals by NI Water. These concerns were clearly legitimate and now need
to be addressed as a matter of urgency.

"Other actions we have asked the Minister now to take include:

* Make public the NI Water action plan which has been agreed to address recent procurement and
accountability breaches;
* Proceed to a full, open public appointment process for non executive directors and include a clear
requirement for each director to protect consumers’ interests and ensure public confidence;
* Immediately clarify the role and functions of NI Water and DRD so that the breaches in governance that
we have witnessed unfolding, never happen again. As part of this we want to see an urgent review of the role
and functions of DRD’s Shareholder Unit;
* Fundamental review of the Partnership Agreement between the Consumer Council, the Department, NI
Water, the Utility Regulator and others, so that the Consumer Council’s statutory role is fully realised at all
times;
* Ensure that the Consumer Council is fully involved – as appropriate with our remit – when considering the
options for the future of NI Water; and
* Ensure that consumers’ interests are protected and consumers have fully independent representation
regardless of the final structure or status of NI Water.”

Consumer Council Chair, Rick Hill added: “There has been a serious breach of trust. However, the Consumer
Council remains focused on working in consumers’ interests. We will continue to provide a robust challenge
function to all those involved in delivering water services for people in Northern Ireland.”

ENDS