National broadband plan procurement
Deputy Murphy questioned the management and competitiveness of the national broadband plan procurement. The Taoiseach defended the process as robust and necessary for rural Ireland, but the Deputy pressed that some of her questions remained unanswered.
Last week at the Committee of Public Accounts I raised the issue of the national broadband plan. There are now significant concerns as to how the process to date has been managed, whether the awarding of the contract, if we get to that stage, will have been done in the best manner possible and whether the State will get the best possible deal. We know there will have been no competitive tendering for what is one of the largest and potentially most lucrative communications infrastructure projects in the country to date. Just last week, the Competition and Consumer Protection Commission was scathing about the potential monopoly within the waste sector, yet here we are in this process with only one bidder. The remaining bidding consortium has changed so fundamentally from the initial bid that it is almost unrecognisable from the entity which first entered the process. We had Eir and SIRO exit the process, while Enet remained as the leader of the remaining consortium. In July of this year, SSE pulled out of the consortium. Enet replaced SSE with the State-backed Irish Infrastructure Fund, yet the consortium continued to morph and just last month it emerged that Enet is no longer leading the consortium but is now a partner alongside other companies, including Actavo, formerly known as Siteserv. Enet, the original bidder, is therefore now only one part of the consortium, which is now led by a private investment firm, Granahan McCourt.
Surely the Taoiseach has concerns about this process and the substantial changes that have occurred within the bidding process since it was first launched. He must be concerned about the links that will inevitably be drawn between the awarding of previous controversial contracts and some of the same personnel involved in this consortium. After all, Fine Gael was in government when the Irish Water contracts were awarded to a subsidiary of Siteserv, which is now the subject of a commission of investigation.
Fine Gael was in government when the second mobile phone licence was awarded to Esat, which then became the subject of the Moriarty tribunal. It is now looking like Fine Gael will be in government when the national broadband plan contract is awarded to a consortium in which the same high-profile businesspeople are involved. It is vital that the process for awarding the tender be above reproach. Would it not be better and more pertinent to ask the questions now, before any contract is awarded, in order to make sure there is absolute public confidence in both the process and the outcome?
My questions are as follows. Is the Taoiseach satisfied that the bidding process, in which only one bidder is involved, will deliver broadband and best value for money? Does he have concerns about the sustainability of the remainder of the consortium, given that it has changed so much since it entered the process? How stable will it be into the future? Is the Taoiseach satisfied that the money spent on the process thus far has achieved the desired outcome?
Comment on this
The national broadband plan aims to ensure every home, school, business and farm in Ireland, no matter how remote, will have access to high-speed broadband. Our ambition is for Ireland to become one of the first countries in the world to be able to do so. It is probably the most ambitious project for rural Ireland since the rural electrification scheme and will probably involve the biggest ever infrastructural investment in rural Ireland. It is a project of that scale, enormity and importance, which is why we have to get it right and we are absolutely determined to do so. It is not true to say there is no competitive tendering. There were many bidders and we are now down to one. Of course, we would much prefer it if there were more, but that is the way markets work. If there are more bidders, one will probably get a better price, but we are down to only one for many reasons. The Department will carry out due diligence to ensure the consortium is capable of delivering and getting the job done, which is the most important thing; to ensure we will get the best price possible, notwithstanding the fact that there is only one bidder still involved in the process; that the process is robust and fair; that we will learn from the mistakes of the past and be aware of the risk of legal challenges which, of course, everyone will want to avoid.
On broadband provision more generally, it is important to acknowledge the enormous progress made by the Government of Fine Gael and Independent Members since Deputy Denis Naughten became Minister. We have seen an expansion of access to high-speed broadband across the country.
Comment on this
That was due to the work of commercial companies.
Comment on this
The rate stood at 52% when the Government of Fine Gael and Independent Members took office. It is now over 70% and will be close to 80% by the end of the year. The increase has been driven very much by the national broadband plan. Commercial investors knew that this was coming and got in ahead of it, put the infrastructure in the ground and provided broadband for homes. However, it will still leave approximately 550,000 premises that will not be provided for by the commercial sector. That is where the Government must intervene. Where the market cannot provide, the Government must intervene. We see this as a project of enormous importance. It is possibly the largest single infrastructural investment in rural Ireland since the rural electrification scheme and it is one we are determined to deliver.
Comment on this
There were a number of questions to which the Taoiseach did not respond. I echo his remarks about the need for the national broadband plan. I do not think anyone wants anything other than for the plan to work, but the process has to be robust. I received a reply to a parliamentary question I tabled last November about the procurement process. It stated the process was still competitive because there were two strong operators in the telecoms field involved. In February I received another reply which stated there was still competitive tension because there were two strong competitors. There is now one bidder remaining and that bidder has changed completely since the process commenced. It has been so unstable it has morphed into something entirely different. How can the Taoiseach give any guarantee that it will still exist in six months or a year or that it will deliver? There are so many questions about the national broadband plan.
Care has to be taken that there is public confidence in how the process works. If the process is faulty, then the outcome is likely to be faulty as well.
Comment on this
I am confident that the process has been robust. The Deputy is correct to draw attention to this. It is important we get this right because it is an enormous investment that will run for 25 to 30 years. There is the expression, act in haste and repent at leisure. We need to ensure this process is robust. We are confident it is. It is new and unprecedented. That is what makes it different from other contracts. It has not been done before, even by other countries. That in itself brings about an inherent risk. That is not a good enough reason, however, not to do it.
The remaining bidder in the national broadband plan put in its final tender to the Department on Tuesday, 19 September. Over the coming weeks, the Department’s procurement team will evaluate the submission. The Minister looks forward to receiving the output from that particular evaluation. As I mentioned, it is unique in terms of its level of ambition and vision. The focus is to ensure that a future-proofed technical solution will allow this and future generations to participate fully in digital society.