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There is only one remaining bidder in the national broadband plan.
There is only one remaining bidder in the national broadband plan.
Image: Shutterstock/Proxima Studio

Taoiseach says final tender for broadband plan is 'many multiples' of the original estimated cost

The Taoiseach said he will make a decision on the final bidder before Easter.
Feb 27th 2019, 1:17 PM 19,801 93

TAOISEACH LEO VARADKAR has told the Dáil that the cost of providing high-speed broadband to 500,000 homes will be “many multiples” of what was anticipated originally.

Speaking during Leaders’ Questions today, Varadkar said he expects to make a decision on whether to proceed with the last remaining bidder before Easter.

The National Broadband Plan, first announced in 2012, aims to bring high-speed internet to parts of the country – smaller towns and one-off homes – that are unlikely to be viable business prospects for commercial providers.

The plan has since been beset by delays and setbacks, including the withdrawal of Eir and rival broadband infrastructure giant Siro, a joint venture between Vodafone and ESB, from the bidding process.

US-based investment firm Granahan McCourt is the only firm still vying for the contract for the project, which it plans to build with a group of subcontractors. SSE had been part of its consortium, however the energy giant pulled out of the group in July.

A contract had been expected to be awarded last year, with then communications minister Denis Naughten – who eventually quit his ministerial post over a series of controversial meetings with Granahan McCourt chief David McCourt – saying the network should take three to five years to complete once the deal was signed. 

Last remaining bidder

Questions have now been raised as to whether the government will proceed with the final bidder, with the Taoiseach stating today that “due diligence” is still underway into the last remaining bidder.

While the cost is ‘many multiples’ of the original estimate, the Taoiseach said it is a very different situation to the national children’s hospital.

“We have not yet taken the decision to designate the remaining bidder as the preferred bidder and we have not 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 to ensure the project makes sense in that regard, while it is also being examined by consultants in regard to deliverability,” said Varadkar.

In addition, some work remains to be done by the government and the Department of Public Expenditure and Reform, he said, adding that as the project will “be far more expensive than anticipated, we must consider how the public finances can bear that additional expense. Obviously, the events of the next couple of weeks will tell a story in regard to the standing of the public finances”.

Due to the costs, the Taoiseach said if it proceeds with the bid, it will have a “significant impact” on the public finances. He said a review as to whether the public finances “can bear it” is underway.

He added that if they proceed, future projects would be put in jeopardy. He said spending for 2019 would be impacted marginally, but projects committed to from 2020 onwards would be impacted. He said the cost of the project, if it goes ahead, would be spread over 30 years. 

With additional reporting by Peter Bodkin

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Christina Finn

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