Tuesday 16 July 2019

Government to ask Eir about 'big turnaround' claims they can do rural broadband for €1bn – not the estimated €3bn

Taoiseach Leo Varadkar. Photo: Damien Eagers/INM
Taoiseach Leo Varadkar. Photo: Damien Eagers/INM
John Downing

John Downing

The Government is seeking more details from Eir about its boss’s claims that it can do the rural broadband for as little as €1bn – against the current estimate of €3bn.

Taoiseach Leo Varadkar said the Government wanted to establish whether this offer was real and "if it stacks up".

He said it was a "big turnaround" for the company, which had previously withdrawn from the tender process.

Mr Varadkar said that if Eir can do the plan for €1bn – he would listen.

"Then, I’m all ears and we have to listen to it and take it seriously," he told the Dáil.

The Taoiseach said the Communications Department had written to the telecommunications firm following comments on Tuesday by its chief executive, Carolan Lennon, to the Oireachtas Communications Committee. She insisted the company could roll out high speed broadband to 540,000 homes, farms and businesses for a third of the current €2.7bn price tag.

"We need to know what kind of delay would be imposed on people in rural Ireland waiting for broadband if we went back to a new procurement process," Mr Varadkar told Fianna Fáil leader Micheal Martin.

The Taoiseach said everyone understands that neither a private nor state company can just be given a contract, especially under EU public procurement rules. 

"There has to be a new procurement process," he said.

Mr Martin pointed to documents released under the Freedom of Information Act from a meeting in September 2017 when then minister for communications Denis Naughten was in office.

The Fianna Fáil leader said the documents showed a "cavalier approach to ballooning costs" which had increased by €300m in one month alone.

Mr Martin said he welcomes "that the Government is prepared to look at this to try to deliver the same objective but in a much more cost-effective way for the taxpayer".

Mr Martin and Green Party leader Eamon Ryan noted that Eir rejected the Taoiseach’s comments on Tuesday that Eir would bypass houses and not connect them and would not cover the 25 years of maintenance costs.

Mr Ryan said it would require "slightly different service level arrangements but, again, these would be the same that apply in the rest of the country. Eir is adamant that it can do it."

He said the company had stated that the provision would include connection right to the house. 

"It includes the last-mile connection - the overhead wire to the home."

The Taoiseach said the comments from Eir raised a lot of questions and among the things they needed to find out is "how there can be such a big difference between the €2.7 billion bid from Eir and this offer of €1 billion now".

The Communications Department were concerned that a big part of the difference between the two offers would mean higher charges for the rural users. This would negate the aim of the government rollout which was to make the same service for rural and urban users at much the same price.

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