Tuesday 25 June 2019

Broadband final bill may be €1bn less than forecast

A broadband router and cable (Rui Vieira/AP)
A broadband router and cable (Rui Vieira/AP)
Adrian Weckler

Adrian Weckler

The National Broadband Plan may cost the State €1bn less than the reported €3bn figure, the head of the State-subsidised process has told TDs.

Fergal Mulligan, programme director of the National Broadband Plan, said a "best-case scenario" could see the State subsidy for the rural fibre broadband rollout come down by a third.

"It's possible that a number of things could come in under cost," he told the Oireachtas Communications Committee.

"You can see that subsidy coming down by up to €1bn."

He said that the most predictable base cost will be €1bn to 'pass' premises with fibre broadband cable.

"We have a good handle on that," he said. "This includes things likes 144,000km of fibre cable, brackets, maybe some poles. It also includes things like optical line equipment in exchanges."

Mr Mulligan said that further costs could turn out to be more variable.

"Connecting to each home is the biggest unknown cost," he said. "We think it will be somewhere in the order of between €400m to €700m.

"However, it's only paid on costs incurred. So if connecting homes comes in at €300m, that's all we'll pay."

Mr Mulligan said that the Government will be looking to reduce the subsidy "on a quarter by quarter basis".

The National Broadband Plan has been estimated to cost up to €3bn in State subsidies, made up of a maximum of €2.1bn in infrastructure payments, VAT on that and €480m in "contingency funding" for unexpected events.

Bidder

The preferred bidder for the 25-year contract, National Broadband Ireland, has said that it will put up €175m of initial capital and a further €45m in working costs.

Department officials say while State funding is capped, the bidder's costs are uncapped and may rise if rollout targets are not met.

Questioned by Fianna Fáil communications spokesman Timmy Dooley, Mr Mulligan said that "clawbacks" that may be due to the State are common in other countries building large infrastructure projects.

Last week, Communications Minister Richard Bruton told the Irish Independent that the finished network would be one-10th the size of Eir, which recently sold for €3.5bn.

However, unlike Eir, it will not own the bulk of its own poles to deliver the broadband, instead renting it from Eir.

Irish Independent

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