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Varadkar warns National Broadband Plan may never go ahead if contract is not signed

The Taoiseach has warned that the National Broadband Plan may never go ahead if the current contr...
Stephen McNeice
Stephen McNeice

14.05 14 May 2019


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Varadkar warns National Broadb...

Varadkar warns National Broadband Plan may never go ahead if contract is not signed

Stephen McNeice
Stephen McNeice

14.05 14 May 2019


Share this article


The Taoiseach has warned that the National Broadband Plan may never go ahead if the current contract isn't signed.

The Government last week named the consortium led by Granahan McCourt as the preferred bidder to deliver the plan to bring broadband to every home in Ireland.

The plan - which aims to bring high-speed Internet to 540,000 homes and businesses - will cost the State around €3 billion over 25 years.

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However, it was not initially revealed how much the consortium - which has set up a new entity named National Broadband Ireland (NBI) - would invest, leading to opposition calls for more details.

In a statement NBI said it will invest €220 million in initial funding for the project – and confirmed that this will come ahead of any state investment in the project.

It said its total contribution will be €2.4bn over the lifetime of the project.

The Government will not own any of the network at the end of the contract – despite its €3bn investment.

File photo dated 15/01/14 of a broadband router and cable. Image: PA Images

Best option

Opposition parties have been highly critical of the structure of the contract; however, in the Dáil this afternoon the Taoiseach Leo Varadkar said failure to back it could see rural Ireland left behind.

“We thought about all the alternatives for months and months and months and this is the best option on the table,” he said.

“This is right for Ireland; this is right for rural Ireland and I really appeal to everyone in this house, take a bit of time – like we did – take a few months to see if the alternatives really stack up and don’t rule out supporting this just yet.

“We can sign this; we can make this happen; if we don’t sign this contract it may never happen.”

He rejected reports that Granahan McCourt would only be investing €220m - against the States €3bn.

“The company has to come up with the full €2.4bn,” he said.

“What you are zeroing in on here is one aspect of the funding and that is the initial equity and working capital.

“That is €220m – about €175m equity and €45m working capital.

“That is only the initial up-front investment by the company. The total amount they have to find is €2.4bn in what is a €5bn project.”

Future tribunal

This afternoon, the Labour Party leader Brendan Howlin said the proposal needs to be radically changed in order to deliver for rural Ireland.

He said the plan, in its current form, could eventually end up in front of a tribunal of inquiry.

“I am not sure that this proposal will ever deliver for rural Ireland and I think what will happen is we will probably have a tribunal that will cost millions looking at this in ten years time,” he said.

“In essence, what we need to do is establish a State-owned national broadband company, obviously on a small scale, but analogous to the ESB initially, to roll out rural broadband.”

National broadband Plan

In its statement today, NBI confirmed it will be required to meet financial obligations of €2.4 billion in the delivery of the project over 25 years.

It said that includes shareholder equity, working capital, performance bonds, operating and revenue risks - adding that the amount is not capped.

The statement adds: "In meeting these financial commitments, NBI shareholders - as part of its initial funding of the project - will invest €220m in equity and working capital.

"This investment is the initial capital required to commence Design and Build activities of the NBP network, and is invested ahead of the Government subsidies, thereby placing this investment at risk first.

"NBI will use these funds to get the project up and running, and this is a first, minimum spend."

NBI suggests it will only generate a return if the project is "delivered on time, and within budget" - adding it will bear any overruns.

The contract to deliver the plan has not yet been signed.

A number of opposition parties last week called for the ESB to deliver the National Broadband Plan instead - with Sinn Féin set to move a Dáil motion to that effect.

Communications Minister Richard Bruton will appear before an Oireachtas committee this afternoon to answer questions about the plan.

File photo dated 15/01/14 of a broadband router and cable. Image: PA Images

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