Government ‘riding shotgun’ to ensure broadband plan costs controlled

The Government will be "riding shotgun" on the National Broadband Plan to ensure that costs are controlled, the Minister for Communications Richard Bruton told an Oireachtas committee on Tuesday.

Mr Bruton sought to reassure TDs that the contract, the largest ever to be signed by the State, would represent value for money. But he was unable to answer many questions about the plan, which could cost up to €5billion to deliver, on the grounds of commercial sensitivity.

“We will be policing rigorously every item where the State can save,” Mr Bruton said. “We will be riding shotgun.”

He said the teams that evaluated the bid for the contract by National Broadband Ireland, the consortium led by US investment firm Granahan McCourt, were "entirely independent of the political process".

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The Minister insisted that the final bid was as cheap as could be given the scale of the project.

“The only way of reducing cost is by reducing the scale of those who will benefit from this,” he said, adding that the Government was not willing to do so.

Several TDs criticised the fact that the fibre network would remain in the ownership of the successful bidder at the end of the process, but Mr Bruton insisted this meant that the owners would be responsible for upkeep and updating the network as it aged.

‘Incentive’

“By not taking the network into the ownership of the State it creates an incentive for the owners to invest in the network,” he said.

Mr Bruton repeatedly sought to reassure TDs that the Government had “evaluated all other options” for delivering the service to some 540,000 rural homes and businesses.

Solidarity-People Before Profit TD Bríd Smith noted a “massive concern for equality for the people of Ireland” given rural post offices, garda stations, schools and hospitals had been closed.

Mr Bruton replied: “We believe that in principle we must make the same level of technology available to rural Ireland.”

Green Party leader Eamon Ryan TD questioned how many of the 32,000 new homes mentioned in the broadband plan would be one-off houses and if this matched the National Planning Framework, which proposes a move away from one-off housing and promotes development in towns and villages.

Mr Bruton replied said he would have to check the number but that “the purpose is not to encourage one-off housing” despite the bidder having to “connect what is built”.

Fianna Fáil communications spokesman Timmy Dooley TD said he wanted to committee to investigate the awarding of the contract. A decsion on whether it will do so is likely to be made later this week.

Fine Gael senator Tim Lombard spoke in favour of the plan and said that "some people here can walk across their constituencies in two hours – I can't drive across mine in two hours". He said broadband was "the single biggest issue" on the doorsteps.

‘Incredibly low’

Earlier, Fianna Fáil finance spokesman Michael McGrath said the sum to be invested upfront by Granahan McCourt was “incredibly low”. The company in a statement said it would be putting in a “first, minimum spend” of €220 million to get the project up and running.

"The taxpayers' bill is going to be up to €3 billion for infrastructure that we will not own at the end of it," Mr McGrath told reporters at Leinster House. "And there's no guarantee that broadband will be delivered to those people who need it."

He added: “The upfront commitment from Granahan McCourt is €175 million in equity and then €45million in working capital and that in essence the balance of the money paid would come in user charges that will actually be paid by the consumer and not by the company.”

The Government had come under pressure in recent days to reveal how much the private company would put into the rollout.