Broadband network should be publicly owned, committee finds

Oireachtas urges cost/benefit study and more oversight in move that may delay rollout

“It is a cause for concern that the operator will recoup its money within seven to eight years, will carry very little risk thereafter and retain full ownership while at the same time the State will have invested almost €3 billion with no ownership rights.” Photograph: Andrew Matthews/PA

“It is a cause for concern that the operator will recoup its money within seven to eight years, will carry very little risk thereafter and retain full ownership while at the same time the State will have invested almost €3 billion with no ownership rights.” Photograph: Andrew Matthews/PA

 

The national broadband network should remain in public ownership and a cost/benefit analysis of the plan should be carried out, an Oireachtas committee report has found.

The Committee on Communications finalised its report into the €3 billion National Broadband Plan on Tuesday with members voting against an attempt by Fine Gael to recommend that the contracts be signed as soon as possible.

Fine Gael members of the committee said they were “disappointed” at the findings. While a spokesman for the Department of Communications said the recommendations would be considered, a Government source said the “sum total” would mean “abandoning the current process” which could “add years of delay”.

The report recommends that the broadband network, once delivered, should be retained in State ownership.

Under the current plan, the State will not own it at the end of the contract.

“We assume that the final value of the asset to the bidder will be around €455 million. As the State will be providing the vast majority of the capital to pay for the development of this asset, it is hard to justify why the ownership should not in the end revert to the State,” the report states.

It found “It is a cause for concern that the operator will recoup its money within seven to eight years, will carry very little risk thereafter and retain full ownership while at the same time the State will have invested almost €3 billion with no ownership rights.

Tender design

“The private sector risk in this project is practically non-existent, undermining the rationale for the design of the tender.”

The document also says that the original terms of the tender were too narrow, “excluding other viable options”.

The committee has also recommended that the Government drastically increase its oversight of the plan.

“The taxpayers’ interests will not be served by having only one member of a board of eight. It needs to be at the very least 60:40 ministerial appointees.”

Fianna Fáil succeeded in passing a recommendation that the Government should commission an external, independent review on whether its proposals and the costs are the only viable option. This would take about three months.

The chairman of the Fine Gael parliamentary party, Martin Heydon, said he believes the recommendations, if adopted, could delay the rollout of broadband by five years.

“Now is the time for political honesty. Either we roll out broadband under this plan or we don’t. A fundamental change to the plan, as recommended in some of the recommendations, cannot be made without cancelling this procurement process and starting again. To start again could take five years.”

Rural Ireland

A spokesman for the Department of Communications said “the Government is committed to delivering high-speed broadband to over 500,000 premises and one million people”.

“The Government believes that those people, who live mostly in rural Ireland, should not be left behind.

“The Government in May 2019 approved the appointment of National Broadband Ireland as the preferred bidder. Work continues on finalising the contract. The department will consider the report of the Joint Oireachtas Committee once it has been published.”

Green Party leader Eamon Ryan said the Government should heed the recommendations contained in the report.

“Our own key recommendations were to retain the network in public ownership and to ensure that the cost of connecting to new homes is covered by the householder as a condition of any planning permission.

“The ball is back in the Government’s side of the court. It will not be easy for them to accept any proposed changes but, with sufficient political will, it should be possible to both get a better return for the exchequer and deliver for rural Ireland.”