Broadband process report concludes well for Government

The report into the broadband process concluded rather fortunately for the Government.

It has found both that the former minister Denis Naughten was right to resign (and therefore that the Taoiseach Leo Varadkar was right to effectively seek his resignation) but also that the private meetings with businessman David McCourt, of the sole remaining bidder, which prompted his resignation had no bearing on the integrity of the process through which a massive State contract may be awarded.

The current Minister for Communications Richard Bruton rejected suggestions on Tuesday that this represented a contradiction, acknowledging that while the meetings generated a "cause for concern" that concern was actually groundless – Denis Naughten could not have influenced the process because he didn't have any information to pass on to Mr McCourt that would have enabled him to do so. There may have been "concern" about the process, but it was not "tainted".

This was a delicate line for the report to walk, but it walked it, concluding: "I am satisfied that neither the former minister nor Mr McCourt had the opportunity to influence the conduct of the tender process in favour of Granahan McCourt or otherwise.

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“I also believe that the decision of the former Minister to resign, thereby removing himself from the process insulates the process form any apparent bias created by his engagement with Mr McCourt.”

Denis Naughten’s offence thus falls into the narrow category of being serious enough to require his resignation, but not serious enough to mess up the process.

No decision made

The report may close this part of the broadband chapter. But the significant questions that surround it – and on which there is not yet a settled view in Government – remain. These centre on two big questions: the ultimate price the State will be asked to pay, and the likely level of take-up of the service once it is eventually constructed.

On Tuesday, Mr Varadkar, Mr Bruton and the Minister for Finance Paschal Donohoe all said that no decision had been made on whether the McCourt tender would be accepted. It is still being evaluated by officials and experts. You can bet that evaluation will continue until the Government has decided what to do.

But on the substantive question of the cost of the project, it is clear that the State side has been alarmed for some time about the escalating cost, as recent Irish Times reports have revealed growing fears at the highest level of Government it could cost up to €3 billion.

The report shows that there has been ongoing haggling between the Department and Mr McCourt on the price of the contract since at least last summer. According to the report, the department clashed with Mr McCourt’s team at a meeting on June 26th this year on the “extremely conservative approach to both costs and potential revenues by the bidder’s team”.

Mr Naughten attended the meeting specifically to give the message that the McCourt price was too high.

“The former minister was in attendance to emphasise that he would not bring the potential subsidy likely to be sought on foot of the bidder’s proposal to Government for approval,” the report says.

In other words, McCourt was looking for too much money from the State, and Mr Naughten was pushing back. It is in this context that the private meetings were taking place.

Three weeks later, the men had a private dinner in Dublin. A few weeks after that, they had what the report calls “an extended phone call”.

If the two men were not talking about price, you’d wonder what they were talking about.