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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

National broadband plan evaluation

Summary

Micheál Martin challenged delays, costs and the changing consortium in the broadband plan. The Taoiseach said coverage had improved, the final tender was under independent evaluation, and all issues including cost and deliverability would be examined before a Government decision.

Over 500,000 homes and businesses across the country are still without broadband and high-speed connectivity, which is having a significantly negative impact on the capacity of rural enterprise to develop and prosper and on the quality of life of many rural households. The original national broadband plan was published in 2012. The procurement process was approved by Cabinet in December 2015. It is now almost December 2018. Progress has been at a snail's pace and many people are deeply frustrated despite all of the political promises made before and after election campaigns.

The procurement process has become mired in controversy. We have the report from the independent auditor, Peter Smyth, which I was reading prior to Leaders' Questions. The extraordinary level of connectivity between Granahan McCourt and the former Minister stands out. There were 18 meetings, nine telephone calls and five dinners. The majority, especially the 12-minute phone call, clearly related to the broadband plan. This is a level of engagement that is without precedent in the context of ministerial involvement with a lead bidder in a tender process. It is extraordinary by any yardstick. One has to ask why Mr. McCourt would feel it so necessary to have such regular engagement with the lead Minister. The auditor acknowledges that those meetings gave rise to concern. He also indicates that he cannot state unequivocally that the broadband procurement process was not discussed during two of those dinner meetings.

It is also important to put on the record that the New York meeting dealt with the character and nature of the consortium. The independent auditor does not deal with this but it seems to us from an objective reading that the lead bidder and the character and composition of the consortium changed. There is a question as to whether the final bidder in the race would have passed the pre-qualification stage. We do not know that because we do not know the criteria. Enet was the lead bidder. That changed with the sale of Enet and Mr. McCourt's investment fund became the lead bidder. An investment fund with a list of subcontractors is now the final bidder in the race as opposed to a number of major telecommunications companies that were involved initially. This raises questions about the capacity to drive this through. Is the Taoiseach satisfied that the final bidder is the same as the original consortium that made a bid and passed prequalification?

I am told an economic evaluation is under way. When did that start and who commissioned it? Who is conducting this evaluation, which is being done in parallel to the tender evaluation process? What are the new timelines and deadlines for the roll-out of broadband to rural Ireland?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

I thank the Deputy. A lot of progress has been made on broadband in the past couple of years. When the Fine Gael and Independent Alliance Government entered office, only half of premises in Ireland had access to high-speed broadband. Today, three quarters of homes, businesses and farms in Ireland have access to high-speed broadband. A huge amount of this has been driven by Government policy and actions. However, it means that one quarter of homes, businesses and farms in Ireland still do not have access to high-speed broadband and approximately 500,000 will need State intervention to give them access. We are determined to get this done. Increasingly, public services are available online and we need people to be able to access them. It is increasingly important when it comes to business that people have access to high-speed broadband. We are determined to make sure every home, business and farm in Ireland has access to high-speed broadband. This is what we are trying to achieve.

The report of the independent auditor was published in the past hour or so. The report from Peter Smyth, the independent auditor, indicates that the process has not been tainted. Now we go on to the next step, which is assessment of the final bid. The final tender was received by the Department on 18 September and it is being evaluated. A decision will be made in the next couple of weeks as to whether we can go forward with it. As I recall, there are two evaluations. An evaluation is being done by one of the big firms. Off the top of my head I think it is KPMG but it may be a different firm.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

Off the top of my head it may be KPMG but one of the big four firms is doing one evaluation and a second evaluation is being done by an expert panel with international involvement. Once this evaluation of the bid is done, a recommendation can be brought to the Government as to whether we proceed with this particular bid.

There have been changes in the composition of the consortium bidding. This is well known and well aired but-----

Comment on this
Leo Varadkar The Taoiseach Fine Gael

This is well known and well aired but the bid still stands. It is worth referring briefly from the report. On pages 18 and 19, it states:

The meetings between the former Minister and Mr McCourt gave cause for concern as they suggest ongoing engagement outside of any formal need for them to engage with each other in the normal course of the Department's business, including the State-led intervention under the NPB ...

Due to the limitations of the review process in the absence of formal minutes or meeting notes for a number of meetings, I am reliant on statements from the former Minister, Mr McCourt and other parties for verification of the purpose and content of these meetings. Therefore, I cannot unequivocally state that the State-led intervention under the national broadband plan was not discussed at the meetings between the former Minister and Mr McCourt outside of the procurement process.

However, based on my ongoing review of the procurement process as Process Auditor, and [having examined]

- the decision register;

- the evolution of the tender documents ... ;

- the evaluation of the process for each submission ... ;

- and the information that could has been available to the bidder through the contact with the former Minister;

I am satisfied that neither the former Minister nor Mr McCourt had the opportunity to influence the conduct of the tender process in favour of Granahan McCourt or otherwise.

I also believe that the decision of the former Minister to resign, thereby removing himself from the process, insulates the process from any apparent bias created by his engagements with Mr McCourt.

Comment on this

The Taoiseach has said it is "well known and well aired" that the consortium changed. How is that acceptable when someone goes through prequalification, the next two stages and at the fourth and final stage, "Hey presto", a new consortium emerges but that is fine because we all know about it? This genuinely needs explanation. It is not covered or dealt with by the report. It is a fundamental question on how we do bidding processes of this kind.

Let us be clear, the former Minister was aware of the subsidy issue because it is documented on page 17. It states: "The former Minister was in attendance to emphasise that he could not bring the potential subsidy likely to be sought on foot of the bidder's proposal to the Government for approval." He is in there with the officials, which is fair enough in one sense, arguing with the bidder as to the level of subsidy.

I am not casting aspersions on the former Minister but this is the same bidder with whom he was having dinner. It does not stack up, and the report does not deal with those fundamental issues. The level of subsidy is crucial and can be to the benefit of a bidder.

Comment on this

The Deputy's time is up.

Comment on this

Does the Taoiseach accept that the canvassing rules were breached as per the documentation, which is very clear regarding the canvassing protocol? Can he also provide transparency in terms of the cost of the roll-out of the national broadband plan now? He said previously that it will be a multiple of what was originally estimated.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The issue relating to the communications protocol is covered in the second paragraph of the conclusions in Mr. Peter Smyth's report. That is my reply in that regard.

The consortium has changed but it is not a new consortium. It is a consortium that has changed in its composition during the process, not a new one.

Comment on this

We have one fifth of what we had.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

We have the report from the independent process auditor, Mr. Peter Smyth. It is available for anybody to read. If people do not have the time, they can read pages 18 and 19.

Comment on this

The good bits.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

That is all people need to know. It indicates that by removing himself from the process by resigning, any concern relating to Deputy Naughten's involvement in this or his relationship with Mr. McCourt no longer affects the process.

Comment on this

The same rules applied to Mr. McCourt.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The final tender was received by the Department on 18 September last. It is being evaluated by the Department with the support of external expert advice. As part of the evaluation, all matters will be examined, including the consortium, the deliverability of the project and its cost. When that examination concludes the Government will be in a position to make a decision on whether we can proceed with this bid.

Comment on this