TDs to send questions to preferred bidder for broadband contract

The Oireachtas Communications committee is to send a list of questions on the National Broadband Plan to David McCourt, the investor leading the preferred bid for the €5 billion project.

The decision came after Mr McCourt declined an invitation to appear before the committee to discuss a variety of topics, including his contacts with former minister for communications Denis Naughten.

The list of questions will also address substantive concerns relating to the bidding process raised during the committee hearings, including those of academics from the University of Limerick, who questioned the “justification” for the plan and argued that more affordable alternatives should have been explored.

Issues raised by Eir, which recently argued that it could achieve the objectives of the plan for €1 billion, will also be put to him.

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The committee intended to ask for “everything, including the kitchen sink”, a source said.

Mr McCourt this week told the committee it would be inappropriate to attend the committee while the tender process was still live but that he would be happy to do so once it has concluded.

Officials from the Department of Communications, Climate Action and Environment on Wednesday said accepting an offer from Eir to deliver the objectives of the plan would be illegal.

Department secretary general Mark Griffin said that if an offer was to be made by Eir, "from a purely legal perspective the Government could not accept such an offer even if it were made, given procurement and State aid law".

Such an offer, if made and accepted, would delay the rollout of the plan, which seeks to connect some 540,000 rural properties to high speed internet, by more than three years, the committee heard.

"The State cannot simply mandate and fund directly outside a procurement process any economic undertaking to carry out a project of this nature," Mr Griffin said.

He also disputed Eir’s contention that the plan would involve an “onerous” duplication of resources.

“We don’t believe the extent of the additional burden that was placed on Eir by the contract was of the order they seemed to suggest at the hearing last week.”

Controversy

Eir threw the National Broadband Plan into fresh controversy last week when it said that it could deliver the aims of the plan for about €1 billion, although this would require disposing of many elements of the plan, including oversight and governance requirements the department says are vital for it to succeed within the terms of competition law and state aid rules.

The current projected subsidy to the preferred bidder, National Broadband Ireland (NBI), is in the region of €3 billion. Eir later wrote to the Department, stating that at the time of its indicative bid of €2.7 billion, it had an analysis which suggested it could deliver the plan for between €512 million and €1.5 billion, again if certain changes were made to the structure of the programme.

Mr Griffin pointed out that Eir’s €1 billion figure which arose last week was given in response to a question about value for money within the process, rather than being a direct offer to the State to complete the plan. Such an offer could only be accommodated within a new procurement process, he added.