Minutes reveal Naughten in direct negotiations with McCourt

Former minister for communications Denis Naughten was directly involved in negotiations with the lead bidder for the National Broadband Plan (NBP), records show.

The negotiations are detailed in the minutes of a meeting he held with US businessman David McCourt and Department of Communications officials in June.

Prior to his resignation this week, Mr Naughten had maintained that he was not directly involved in the NBP evaluation process and that a separate team of officials from his department were responsible for the governance and the evaluation of the tender.

The minutes of the meeting, which was held in Dublin on June 26th, record that Mr Naughten said he had been updated on negotiations between the department and Mr McCourt’s firm, Granahan McCourt, over the draft NBP contract and “that the bidder was adopting a conservative position in respect of potential costs and potential revenues” regarding the project.

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This was likely to mean the bidder seeking a higher level of subsidy than he, as minister, could recommend to Government, Mr Naughten said, and “which the secretary general as accounting officer could recommend as value for money”.

Deployment

In response to the minister’s comments, a member of Mr McCourt’s team spoke about the cost of deployment, the unknown construction risk involved and the “uncertainty relating to retailer on-boarding”.

The minutes show the secretary general of the department also commented on the conservative approach being taken by Granahan McCourt, which is the sole remaining bidder in the Government’s broadband tender.

One of the main sticking points in the process is said to be the potential operating costs of the project, which are predicated on the likely take-up of broadband contracts by the public once the proposed network is built. Despite the demand for better broadband services nationally, the take-up in many rural areas, serviced by commercial operators, has been quite low.

Committed

Eir and Siro, which quit the process at an earlier stage, stated the business case for investing in broadband services in some of these areas was no longer apparent, even with the Government subsidy.

The minutes of the meeting state that Mr McCourt assured the minister that Granahan McCourt remained committed to the project and “that the bid team needed to take a view on range of issues before them”.

“The secretary general concluded the discussion by asking the bidder to reflect on its position and to revert to the NBP procurement team at an early date with its position,” the minutes state.

The NBP has been thrown into turmoil by Mr Naughten’s resignation on foot of details about his contacts with Mr McCourt during the procurement process.

Mr Naughten had originally only admitted to meeting Mr McCourt at a social event in New York in July.

But when asked at a post-budget briefing on Wednesday if he had met Mr McCourt on any other occasion during the procurement process, Mr Naughten said he had attended a meeting in Dublin with Mr McCourt and department officials in June. The following day, the minister admitted he had three further dinners with Mr McCourt.