Broadband rollout and cost overrun
Deputy Micheál Martin challenged the Government’s broadband promises, rising cost estimates, delays in tendering and the risk that the plan may not be rolled out. The Taoiseach said coverage had risen to about 80%, due diligence was still under way, and a decision was expected before Easter despite the financial impact.
In 2012, the then Government led by Fine Gael promised to provide high-speed broadband to 100% of homes and businesses by 2020. The Minister for Communications, Energy and Natural Resources at that time, Pat Rabbitte, had humble expectations and estimated the cost at €350 million. In 2013, the tendering process began and his successor, Alex White, announced a new strategy, with the cost estimated at €500 million. In 2016, the Government announced it would deliver high-speed broadband to 85% of premises of premises by 2018 and 100% by 2020.
As we know, the tendering process has been very difficult and a bit of a nightmare. SIRO withdrew because of Eir's decision to expand its offering to 300,000 more premises. There was a debacle in October with the resignation of the former Minister, Deputy Naughten, because of a series of meetings and dinners with the final remaining bidder, Mr. David McCourt of Enet. Enet was subsequently taken over by the State-backed Irish Infrastructure Fund, IIF. Eir had previously announced its withdrawal from the process. The situation in October and November was a bit of a mess. The incoming Minister, Deputy Bruton, stated that he would bring a recommendation to Cabinet within weeks regarding the Enet submission, notwithstanding that Enet had fundamentally changed its composition. From my perspective, it looked like a new consortium. It is the remaining bidder.
Meanwhile, many tracts of the country are without a technology that is essential for new industries, businesses and the daily activities of life and commerce. In November, the Taoiseach estimated that approximately 540,000 homes or 1 million people were without high-speed broadband. New figures released by the Central Statistics Office, CSO, today indicate that, for example, only 58% of people in County Leitrim have access to broadband.
It has been a tortuously slow process, with numerous promises made and not fulfilled. The only activity has been in the private sector. When will the Government make a decision regarding the remaining tender submission by Enet? The Taoiseach indicated before Christmas that the cost would be a multiple of what was originally estimated. Is there a current estimated cost of the Enet bid were it to be accepted by Government? To what degree is it impacted by the recent statement by Eir that it wishes to bring fibre to an additional 80,000 homes and the proposal by Imagine to bring wireless technology to 500,000 homes? Will the size of the intervention area be reduced even further, leading to higher costs?
Comment on this
We have made significant progress in the past three years in providing high-speed broadband across the country. When this Government took office, only approximately half the premises in Ireland - homes, businesses and farms - had access to high-speed broadband. That figure now stands at approximately 80%, so significant of progress has been made. The Government has worked with the private sector to deliver that. However, that still means approximately 500,000 households, businesses and farms, mainly in rural Ireland but some in urban Ireland, do not have access to high-speed broadband. For the 20% without access, it is all the more annoying and frustrating and it will become a greater problem into the future as so much commerce and so many public services and workplaces go online and take advantage of these technologies.
The national broadband programme has changed significantly in recent years due to the development of technologies and the fact that the private sector has provided broadband in large numbers of areas, including parts of rural Ireland that would have been the more profitable parts of the national broadband plan, NBP, while other factors that have driven up the cost over the years. As things stand, there is one remaining bidder. That bidder has not yet been designated by the Government as the preferred bidder and some due diligence is still ongoing in regard to the tender. We have received the tender.
As the Deputy pointed out, the cost is many multiples of the original estimate. However, it is a very different situation from the national children's hospital, for example, as we have not yet taken the decision to designate the remaining bidder as the preferred bidder nor have we signed any contracts for the project. That decision is yet to be made and we want it to be very transparent. It cannot be made at this stage because due diligence is still being carried out. An international review panel is assessing the cost-benefit analysis and making sure the project makes sense in that regard, while it is also being examined by consultants in regard to deliverability. In addition, some work needs to be done by the Government and the Department of Public Expenditure and Reform.
As the project will be much more expensive than anticipated, we must consider how the public finances can bear that. Obviously, the events of the next couple of weeks will tell a story in regard as to where we will stand in terms of the public finances.
On the more recent announcements, it is welcome that Eir will upgrade fibre in our cities and towns, bringing fibre to many more homes. However, that will not impact on the NBP because the Eir investment is only in towns and cities. The service being offered by Imagine is also welcome but it is wireless broadband and not fibre to the home. We again do not anticipate that it will impact on the intervention area.
Comment on this
I wish to raise two issues. The Taoiseach is saying that further due diligence remains to be done and the cost will be multiples of what was originally envisaged. I note that in response to a question by Deputy Dooley last week the Minister, Deputy Bruton, stated that he wanted to meet the two additional companies. Given that in October we were told a decision would be made within weeks, is there now a significant question mark over whether the plan will be rolled out?
The Minister for Finance, Deputy Donohoe, made clear to Deputy Cowen that the extra costs would impact on other projects in the national development plan, NDP. He stated that the Government would have to move capital around within the plan, which would impact on other projects. Notwithstanding sensitivities relating to the tender process, can we expect some precision regarding the costs of the Enet submission if it were to be accepted by Government?
When can we expect a decision from Government? The Minister, Deputy Bruton, has consistently said that a decision would be made in the coming weeks. However, he has been saying that since early November and it is now almost March. The House should be given an indication as to when a recommendation will go to the Government and a decision made. In addition, there should be a precise public indication of the likely cost of the NBP, as now envisaged.
Comment on this
My objective is to be in a position to make a decision on this matter before Easter. I am not in control of all the factors but the plan is to be make a decision before Easter. Due diligence is still under way by the Departments of Public Expenditure and Reform and Communications, Climate Action and Environment. As I mentioned, because the cost will be many multiples of what was originally anticipated, it will impact on the public finances. The events of the next couple of weeks will help us decide whether we can bear that impact on the public finances.
The impact in 2019 will be minuscule but there will be a significant impact in 2020, 2021 and thereafter. This project will take the form of a public private partnership and its cost will be spread over approximately 30 years so I do not believe it should involve a decision for this Government alone. The impact will also be experienced by future Governments. This is quite different from other projects that are in the news at the moment. That is why we want to be transparent about it and why we will want to consult the Oireachtas on it.