Rural broadband to cost ‘multiples’ of original estimates
ROLLING out high-speed broadband to more than 500,000 homes and businesses will cost “many multiples” of the €500m originally estimated, it has emerged.
A question mark is now hanging over the project as the Government weighs up whether the public finances “can bear that impact” in light of Brexit.
Already reeling from the cost overruns of the National Children’s Hospital, Taoiseach Leo Varadkar has denied the National Broadband Plan (NBP) is set to become another runaway expense on the taxpayer.
Only one bidder, a consortium led by Granahan McCourt, remains interested in the contract to deliver broadband to more than a million people.
The Cabinet is expected to make a decision on how to proceed before Easter.
“As the project will be far more expensive than anticipated, we must consider how the public finances can bear that additional expense,” said Mr Varadkar.
“Obviously, the events of the next couple of weeks will tell a story in regard to the standing of the public finances.”
It comes as the EU Commission warned the ability of small- and medium-sized businesses to innovate and act competitively is being hindered by “the lack of access to ultra-fast broadband in more than 95pc of rural areas”.
In a report outlining the challenges facing the Irish economy, the commission also noted that “fixed broadband remains relatively expensive in Ireland as compared to other EU countries”.
In 2013, it was envisaged that bringing quality internet access to the whole country would cost in the region of €500m. However, it has now been suggested the final bill could amount to €3bn.
To date, around €22m has been spent on consultants, technical support and network design, the cost of legal advice and process auditor costs.
In the Dáil, Mr Varadkar admitted the overall bill would be “many multiples of the original estimate”.
“However, it is a very different situation to the National Children’s Hospital, for example, as 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,” he said.
The impact on the country’s finances will be “minuscule” this year but is likely to be “significant” from 2020 onwards.
Due diligence procedures, including examination by international experts, are ongoing.
This project will take the form of a public-private partnership and its cost will be spread over approximately 30 years.
Mr Varadkar said progress had been made in supplying high-speed broadband to 80pc of people.
“For the 20pc without access, it is all the more annoying and frustrating and becomes 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,” he said.
Fianna Fáil leader Micheál Martin described the tendering process as “a bit of a nightmare”. “It has been a tortuously slow process, with numerous promises made and not fulfilled,” he said.
A number of other bidders pulled out of the process, including Eir and Siro, and last October Denis Naughten resigned as communications minister after it emerged he attended a series of dinners with head of the remaining consortium, David McCourt.