Broadband provider ‘on the hook’ if costs go over budget, says Bruton
The Communications Minister would not comment on the amount of initial equity to be provided by Granahan McCourt.
Communications Minister Richard Bruton has said the private firm involved in the rural broadband rollout will have to foot the bill if its plan goes over budget.
It was reported over the weekend that Granahan McCourt, the Government’s chosen bidder for the National Broadband Plan, are to invest less than 200 million euro in equity into the plan, while taxpayer funds could provide in the region of five billion euro.
Speaking in Wicklow on Monday, Mr Bruton would not comment on the amount of initial equity to be provided by Granahan McCourt.
“I’m not commenting on what the actual initial equity will be in those contracts as we have yet to conclude those contracts,” he said.
The National Broadband Plan is the largest investment in rural Ireland since rural electrification. It is just as important to the future as electricity was then.— Richard Bruton (@RichardbrutonTD) May 7, 2019
He added that “the state has a responsibility somewhat of the same sort, but part of the state’s cost is contingency which may not be called upon.
“They (Granahan McCourt) have responsibility under that contract to provide initial equity of course, and working capital equity, and also should there be any risks encountered, if they find that projections aren’t fulfilled, they are entirely on the hook for injecting new cash into the business to sustain it.”
The Government has come under sustained criticism in the week since announcing the plan, which they say is value for money despite the price being paid by taxpayers, and the fact the state will have no ownership of the project.
Fianna Fail spokesperson on public expenditure and reform, Barry Cowen, has said that the Government’s continued refusal to disclose documents in relation to the input of Granahan McCourt is an affront to taxpayers.
“Minister Donohoe (Minister for Public Expenditure) is taking the people of Ireland for mugs with his insistence that no capital projects will be impacted as a result of the costs of the plan.”
However, Mr Bruton remained steadfast on Monday, saying that the Government had reviewed every possible option for the delivery of the plan.
My belief and the belief of Government is this is the best approach, the most cost-effective, and will deliver it quick as possible. Richard Bruton
“This isn’t a leap of faith, there is a recognition that broadband is going to be crucial to participation in Irish society in the years ahead,” he said.
“If we have 1.1 million people excluded from broadband, we’d be cutting off opportunities for huge swathes of our population, and that’s not acceptable.
“In terms of the model, we’ve looked at every alternative, we examined all of these, they all would either not deliver on the ambition or deliver it at higher cost or impose lengthy delays.
“My belief and the belief of Government is this is the best approach, the most cost-effective, and will deliver it quick as possible.”
Mr Bruton will appear before the Oireachtas joint committee on communications this week to discuss the process of selecting the rollout plan.
“I’m going to committee this week to convince people that this is the best option and how we reached this decision,” he said.
“We have analysed it in great depth and the ambition of including rural Ireland in broadband is an important goal.”
Documentation released by the Government last week showed that Secretary General Robert Watt and his officials had strongly recommended against the Government appointing the preferred bidder on grounds of affordability, risk and value for money.
The top civil servant in the Department of Public Expenditure warned that the plan poses great financial risk and called for the procurement process to be cancelled.
A consortium led by Granahan McCourt was announced as the preferred bidder after Cabinet approval.
It was the only remaining bidder for the contract to deliver high-speed broadband to more than 540,000 homes and businesses.
The rollout of the scheme, which will bring fibre broadband to 1.1 million people across the country, will begin at the end of the year.
It is expected to take seven years to complete.