Fears legal challenge may put brakes on rural rollout Ambitious £600m broadband scheme could now miss crucial EU cut-off date
NICOLA Sturgeon’s flagship plan to bring superfast broadband to every corner of Scotland could be timed out after accusations of “manifest error” in the contract process, the Herald on Sunday can reveal.
Scottish ministers have admitted that a legal challenge to the biggest element of the £600 million R100 scheme could cause it to miss a crucial cut-off date at the end of the year.
The Government’s legal team told Scotland’s highest court that ministers considered it “extremely important” that the challenge be dealt with “in its entirety” by then.
If not, the Government feared the contract would no longer “enjoy the protection” of the European state aid deal that underpins it, as this expires on December 31.
Opposition parties said the R100 rollout, which was meant to help bridge the digital divide between town and country, was now in a “perilous situation”.
The legal challenge has been brought by a failed bidder for the most lucrative part of R100, which covers the north of Scotland and is worth almost £400m.
Ministers have been accused of failing in their “express duties” under procurement law and of “manifest error” in the awarding of the contract to BT.
The revelation is the latest blow to R100, which is supposed to install 30Mbps+ connections to the most remote corners of the country, but has been beset by delays.
In her 2016 manifesto for Holyrood, Nicola Sturgeon promised to “deliver 100% superfast broadband coverage for Scotland by the end of the next Parliament”.
But delivery has now slipped to the end of 2023 for the £83m central Scotland part of the programme and to summer 2024 for the £133m south of Scotland element. The Scottish Government signed contracts for both areas with sole bidder BT last year, and these parts now appear to be secure.
However, the biggest slice of the R100 programme, the £384m north area contract covering 100,000 premises in the Highlands and Islands, Angus, Aberdeen and Dundee, remains up in the air.
After ministers announced BT was also the preferred bidder for the “North Lot”, the decision was challenged by a rival bidder, Oxfordshire-based rural broadband specialist Gigaclear Ltd.
Energy Minister Paul Wheelhouse told MSPs about the challenge in December, and later said that until it was resolved the contract was “on hold”, and the
Government could not discuss what it might ultimately deliver.
He also announced a voucher scheme for premises not wired in by the end of 2021 to help them get some form of alternative internet.
The state aid threat to the north area rollout emerged during a Court of Session virtual preliminary hearing on Wednesday.
Mark Lindsay QC, for Gigaclear, said his client primarily wanted the award of the contract to BT to be “set aside”, with financial damages a “secondary remedy”.
Lindsay said the challenge was about “manifest error” in the procurement process and related bid scoring, involving technical issues which may require evidence to be led in court.
He said Gigaclear believed Scottish ministers had failed in their “express duties” under the Public Contracts (Scotland) Regulations 2015.
The court heard Gigaclear wanted the dispute resolved through a substantive proof hearing of around eight days, but that this might not take place until October.
Lindsay added: “The state aid cover expires at the end of the year and clearly it’s in the interests of both parties for this action to be resolved before then.”
Solicitor Advocate Christine O’Neill, for the Scottish Government, said the public funding for the R100 programme was made possible by a state aid approval [the 2016 National Broadband Scheme] which runs until the end of 2020.
She said: “That approval expires on December 31 this year. There is a concern that if the contract cannot be awarded by then it will not enjoy the protection of that [scheme].”
She said any ongoing legal proceedings that suggested the procurement process broke the law “may also prove to be an obstacle to ensuring protection of the state aid cover”.
She added: “From ministers’ perspective, it is extremely important that this matter is dealt with in its entirety by