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Government: Eir proposal to complete National Broadband Plan for €1 billion 'not feasible'

The company’s CEO raised the alternative cost at an Oireachtas committee last month.

Image: Shutterstock/Valentyn Volkov

THE GOVERNMENT HAS ruled out taking up a proposal by Eir to complete the National Broadband Plan (NBP) for less than €1 billion.

In a statement this evening, the Department for Communications said the evidence presented by the telecommunications company showed the proposal was “not a feasible alternative”.

It follows comments by the company’s CEO Carolan Lennon at the Oireachtas Communications Committee last month, when she claimed that Eir could complete the infrastructure for a figure that was around a third of the current projected cost.

The government estimates that the plan, which aims to bring high-speed internet to over 540,000 properties in rural Ireland, will cost the taxpayer around €3 billion.

However, the Secretary General of the Department of Communications subsequently told another sitting of the committee that the government could not legally accept the offer.

This afternoon, Minister for Communications Richard Bruton updated the Government on the progress made towards finalising the contract for the project, and formally ruled out Eir’s proposal.

Following the meeting, the Department said that the evidence presented by Eir did not meet certain objectives for the plan and that it contained material which had already been raised and dismissed during the companys’ participation in the procurement process.

“It is crucial that we move to sign the contract so that the one million people who today are without access are not left behind,” the Minister said.

“Digital technology is transforming how we live, learn and work. We must make sure the people of rural Ireland have the same opportunities as those in our towns and cities.”

Eir was among the original bidders for the contract but pulled out of the process, and US-based investment firm Granahan McCourt is now the government’s preferred bidder for the contract.

Although a contract has not been signed yet, the Department also announced that it expects this to happen later this year after financial documentation is finalised.

The plan will require the installation of around 144,000 kilometres of fibre cable on about 90,000 Eir poles around Ireland to deliver access to broadband.

Fibre cables will also have to be installed on poles owned by the company, which will be leased from Eir at a cost of around €1 billion.

The escalating cost of the government’s subsidy for the plan has been an ongoing source of controversy, and documents seen by TheJournal.ie show that the estimated cost of the plan rose by €300 million in one month last year.

In a letter to the committee after her appearance, Lennon reiterated claims she made that the company would have been unable to complete the project for €1 billion because of the procurement model used by the Department of Communications.

“While Eir could have delivered the NBP programme as specified, we were unwilling to do so because of the complex and onerous provisions that left us with no possibility to develop a business case for the project,” it read.

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“Eir therefore reluctantly took the logical commercial decision to withdraw.”

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