Friday 24 May 2019

Broadband plan not a leap of faith and bidder is on hook for any extra cost, insists Bruton

Richard Bruton: Responded to criticism of the broadband plan. Photo: Gareth Chaney, Collins
Richard Bruton: Responded to criticism of the broadband plan. Photo: Gareth Chaney, Collins
Cormac McQuinn

Cormac McQuinn

Communications Minister Richard Bruton has denied the €5bn roll-out of rural broadband is "a leap of faith" and insisted that the company in line to get the contract will be "on the hook" for injecting extra cash if it's needed.

Mr Bruton today faces a grilling by TDs and senators about the National Broadband Plan (NBP), which has been beset by delays and difficulties.

The Government has been under-fire after it emerged that the preferred bidder, Granahan McCourt, is putting only around €200m up-front towards the cost of the project.

That compares to a maximum of €2.97bn to be invested by the State over 25 years, including €545m for contingency funding if issues arise.

Meanwhile, Sinn Féin has continued to apply pressure to Fianna Fáil to back a Dáil motion to appoint the ESB to carry out the broadband project.

Mr Bruton responded to criticism of how the NBP has been handled, insisting "this isn't a leap of faith", and adding that broadband would be "crucial to participation in Irish society in the years ahead".

He said he was happy to come before the Oireachtas Communications Committee today and go through all of the alternative options that the Government considered for the broadband roll-out.

He argued that the model chosen was the "most cost-­effective" and would deliver broadband as quickly as possible.

Mr Bruton refused to comment on reports that the preferred bidder company, Granahan McCourt's National Broadband Ireland, would contribute just €200m up-front.

He said the bidder would have responsibility for €2.4bn of the total cost of the project.

Mr Bruton also said part of the State's cost was the €545m contingency which would not be called on "unless absolutely necessary".

He said the private company had a responsibility under the contract to provide initial equity and working capital.

He added: "Should there be any risks encountered if they find that the projections aren't fulfilled, they're entirely on the hook for injecting new equity or new cash into the business to sustain it."

Mr Bruton said that the State's exposure was "absolutely capped" and the company was carrying the risk "if, as some people are predicting, it will be very difficult to persuade people to take this service up".

He said it was "not a risk-free project" and the Government wanted "a system that will stand on its own two feet at the end".

Both Fianna Fáil and Sinn Féin have argued that the ESB should have been used for the roll-out of high-speed internet to rural areas.

However, Sinn Féin leader Mary Lou McDonald accused the other Opposition party of "aiding and abetting" the Government in what she claimed was the NBP "shambles". She called on Fianna Fáil leader Micheál Martin to support her party's motion on bringing in the ESB to carry out the project. She said her challenge to him was "put up or shut up" on the issue if he was "serious about protecting rural Ireland".

Mr Bruton said the Government did consider the ESB option and pointed out it had been part of the original tender competition before dropping out.

He said bringing in the ESB would mean a new procurement process that could take two or three years and could end up being as costly if not more expensive than the current proposal. He maintained the Government's plan was the best option.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Also in this section