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Government spends more than €25m on consultancy fees for National Broadband Plan

The fees were paid to firms for advice given from 2013 to date.

Millions has been paid to some of the country's top consultancy firms.
Millions has been paid to some of the country's top consultancy firms.
Image: Shutterstock/Ruslan Sitarchuk

THE GOVERNMENT HAS spent more than €25 million on reports from consultancy firms about the National Broadband Plan.

In a letter from the Finance Minister Paschal Donohoe to the Oireachtas Budgetary Oversight Committee, seen by the TheJournal.ie, the minister confirmed that from June 2013 to 12 June 2019, the total spent on consultancy firms amounts to €25,853,684.

The money has been paid to some of the country’s top consultancy firms such as PwC and KPMG.

The companies have been paid for their advice provided throughout the process, as well as for reports on strategy development, economic analysis and State Aid rules advice.

The figures are revealed in the same week that an Oireachtas committee voted to keep the national broadband network in public ownership. 

Members of the committee also voted for the government to commission an external and independent review on whether the current proposal is value for money.

Ireland’s top consultancy firms

Fianna Fáil’s Communications spokesperson Timmy Dooley said this week that an independent expert, from outside the State, who has expertise in EU law as well as broadband network provision should carry out the review.

He did not believe that someone from one of the established consultancy firms, often used to carry out reviews into government matters, such as the national broadband plan, should be asked to do the review.

“The consultancy fees spent by government on their botched National Broadband Plan is disgraceful but unsurprising. They have spent over €25 million of taxpayers’ money for the private sector to recommend a flawed privatisation model that will see €3 billion transferred from the public purse to private shareholders.

“And for infrastructure the State won’t even own. Sinn Féin called for public ownership from the beginning,” said Sinn Féin’s Pearse Doherty.

Doherty raised concerns about the vast amount of public money being paid to companies PwC, KPMG, Deloitte and EY for consultation fees, highlighting that between 2011 and 2018, all departments, excluding Department of Social Protection, the government has spent €82.5 million on the four firms.

The Oireachtas committee members also raised questions this week about whether the talks about the network should be reopened, with both Fianna Fáil and Sinn Féin stating that Eir and the ESB should be looked at again as a possibility. 

Government sources told TheJournal.ie that it is keen to sign the contract and get started on the project as soon as possible. 

Compensation to the bidder

The letter from Donohoe clarifies that if the government walks away from the contract with the preferred bidder, “there is no obligation to reimburse” the bidder, “regardless of whether or not the procurement results in the award of a contract”. 

The project has been an ongoing source of controversy, following a number of rejected proposals, plans for the proposed ownership of the network, and a ministerial resignation last year.

Several bidders pulled out of contention for the tender for the project, which was awarded to the Granahan McCourt consortium in May, while the escalating cost of the subsidy the government will provide for the plan has also been criticised.  

As early as September last year, Finance and Public Expenditure Paschal Donohoe questioned a decision to grant ownership of the plan to the winning bidder, after it emerged that the Government would pay €2.9 billion for the project over 25 years, with Granahan McCourt investing €220 million. 

Senior officials in the department have questioned the decision to progress with the plan, with documents showing that the minister was warned that other projects could be at risk if the project is given the green light.

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