McDonald accuses Bruton of being ‘coy’ in refusing to state broadband firm’s stake

Bruton says he will not prejudice final signing off of contract by giving figure

Minister for Communications Richard Bruton speaking in Dublin after the Government approved the national broadband plan at a cost of €3 billion. Photograph: Michelle Devane/PA

Minister for Communications Richard Bruton speaking in Dublin after the Government approved the national broadband plan at a cost of €3 billion. Photograph: Michelle Devane/PA

 

Minister for Communications Richard Bruton has been accused of being “very coy” in refusing to state the amount the preferred bidder in the national broadband plan would invest.

Mr Bruton rejected calls by Fianna Fáil leader Micheál Martin and Sinn Féin leader Mary Lou McDonald to state the equity investment of the last remaining bid in the process, a consortium led by US businessman David McCourt.

“The equity is commensurate with the sort of revenue this project will generate,” he said.

Mr Martin said the figure could not be commercially sensitive when there was no other bidder, but the Minister said, “I’m not going to prejudice the final signing off” of the contract on the project, as he insisted the figures were confidential.

Mr Martin said the Department of Public Expenditure was raising a major “red flag” on the public spending code for a project, but the Minister insisted there was no breach of the public expenditure rules.

During leaders’ questions in the Dáil, Ms McDonald said the State was quick to make the taxpayers’ investment in the controversial project to provide broadband to 540,000 homes, farms and other businesses in rural areas.

But she said the Minister had been “very coy” in refusing to reveal the amount the preferred bidder would invest. The Government had “asset-stripped rural Ireland” for years but on the eve of an election they launched a “cynical” election stunt in the national broadband plan, she added.

“The taxpayer has skin in the game to the tune of €3 billion,” but there was no figure for the private investor and the documentation released to politicians just before the Dáil resumed “insinuates that that sum of money is a fraction of the €3 billion the taxpayer will have to divvy up”.

Insisting that the figure was confidential, Mr Bruton said that there were clauses built in to the agreement to protect the taxpayer and “clawback” on their behalf, including if there were extra profits for the investor.

“Any failure of take-up will fall on equity investor,” he said. “This is the best technology delivered at the cheapest cost and is an investment rural Ireland deserves.”

The Minister also said the company would not be paid €3 billion. “That is a completely distorted way of stating the situation.”

He said the company would not get paid until the 146km was rolled out and there were the various elements where they would get clawbacks.

Mr Bruton said the numbers affected included more than 50 per cent of farmers, over 100,000 small businesses and 600 schools.

Earlier, the Dáil was suspended for 90 minutes after a row over the delayed release of a significant volume of redacted documents linked to the bid, which were published just five minutes before the Dáil was due to resume.

The Fianna Fáil leader pointed to the concerns of the secretary general of the Department of Public Expenditure and Reform who said there were “unprecedented risks” in terms of the long-term sustainability of the project.

He said that €2.75 billion of the State’s €3 billion would be required by 2026. He added “the private operator will have all of their money back by 2026” while the State would have paid over €2 billion with an unfinished project.

Mr Martin asked why was the Government “so dismissive of the concerns of the Department of Public Expenditure and why the absence of any robust response by Minister for Public Expenditure to concerns of the secretary general”.

Mr Bruton said “we did not dismiss the evidence presented by the department” but “evaluated every one of those concerns very carefully”.

He added: “We’ve managed those risks in a way that protects the State”.

“We are ensuring that the company will be viable” at the end of the project period and that “it will continue to provide service for another 10 years beyond”.

The Minister also said no alternative was offered to complete the project at lower costs and he rejected a proposal for a State-owned project which he said would provide fibre to a limited number of locations.