Sunday 21 July 2019

'Unacceptable' that changes to broadband plan took place without cost-benefit analysis - Dail spending watchdog

(Stock picture)
(Stock picture)

Cormac McQuinn Political Correspondent

THE Dáil's spending watchdog has said that it's "unacceptable" that significant changes that led to an escalation of costs in the National Broadband Plan (NBP) were made without a cost-benefit analysis study being carried out.

TDs have recommended that a new cost-benefit analysis be undertaken before the final NBP contract is signed “to ensure that the full costs, including implementation, are known.”

The controversial NBP is estimated to cost up to €5bn over the next 25 years with as much as €3bn coming from the taxpayer.

The finding is contained in the latest report from the Public Accounts Committee (PAC) which also concluded that the procurement process for the NBP "may have partly deterred parties interested in tendering for the project from doing so."

It recommends that the Department of Public Expenditure and Reform (DPER) carry out a review of the NBP process "to inform future procurement processes and ensure maximum competition."

The PAC said changes in the NBP requirements between the start of 2015 and and when the project actively went out to tender meant the original cost projections became "irrelevant".

"A new cost-benefit analysis should have been completed to reflect these changes," the report says.

PAC chairman, Fianna Fáil TD Seán Fleming, said the committee is recommending that there should be no signing of the NBP contract without an updated cost-benefit analysis.

His party colleague Marc MacSharry pointed to claims by Eir that it could roll-out high speed rural broadband for less than €1bn.

He said: "Obviously money is in short supply with many, many projects. If there’s up to €2bn that can be saved then certainly this recommendation [the cost-benefit analysis] is one we'd like to see embraced by the Department."

Social Democrats TD Catherine Murphy said that the government has indicated that it wants the NBP contract signed before the National Ploughing Championship in September.

She raised concerns that the Dáil is going into recess without having seen the tendering document, without a new cost-benefit analysis and "with another entity with their cards on the table in relation to the provision of broadband".

She added: "The whole thing is completely unsatisfactory."

The PAC report contains conclusions and recommendations arising from meetings of the committee between October 2018 and May 2019.

It includes the committee's probe of the rising costs of the National Children's Hospital (NCH) as well as its examinations of the government's climate action efforts; tribunal costs; and housing. 

The new Children's Hospital is expected to cost at least €1.7bn after it emerged late last year that construction costs had risen by €450m.

The PAC report says it's "absolutely unacceptable that nobody can give a reasonably accurate estimate of the expected final costs for the completion and fitting out of the National Children's Hospital."

It adds: "The committee recommends that no contract is signed for a significant capital project without a fully detailed design supported by a proper cost estimate."

It also says: "The sudden increase in costs for the on-going construction of the National Children's Hospital is extremely worrying and indicates that the tendering process for the project was totally inadequate."

The PAC finds that the Department of Health "has not provided proper oversight or ensured coherence on all aspects of the project".

In relation to the Children's Hospital Labour TD Alan Kelly claimed: "This is probably the worst management of a project in modern history in Ireland" and that there had been a breakdown in the layers of oversight of the project.

Ms Murphy said: "I don't think there's any one of us that don't feel utterly frustrated that there isn’t a level of accountability on this."

She said there is "no individual that can be pointed to in relation to culpability… it's another kind of ‘whoops’ but it's the taxpayer that's picking it up."

In relation to climate action the PAC says the failure of the Department of Communications, Climate Action and Environment to implement actions to reach agreed renewable energy targets by 2020 is "unsatisfactory".

It says that "While the potential cost to the State is unknown, current evidence indicates that costs could be substantial". 

Elsewhere, in a section on its meeting with the Department of the Taoiseach the report outlines the combined €370m costs of several Tribunals and Commissions of Investigation.

The report finds that "There is not an effective control of costs for tribunals and commissions of investigation which take longer than anticipated or whose terms of reference are extended."

It recommends that DPER  works with the government and the Dáil to establish an agreed set of procedures to be followed when costs... have exceeded or are expected to exceed the estimated costs on establishment.

On housing the PAC finds that the spending of 27pc of the housing budget in 2017 on houisng supports such as HAP (Housing Assistance Payment) and RAS (Rental Accommodation Scheme) "does not represent value for money".

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