Minister should publish Smyth’s rural broadband review in full
THE National Broadband Plan (NBP) was in something of a crisis even before the revelations about meetings between then-minister Denis Naughten and David McCourt, the head of the only remaining consortium left in the tender.
The crisis stemmed from the fact there was only one actual bidder, a €500m State contract was up for grabs and several late changes were made to the make-up of the consortium.
The real tell-tale sign of trouble was not so much that McCourt’s consortium was going to use its sole bidder position to extract a wonderful deal from the State. It had more to do with whether this venture really made sense at all.
Two other bidders pulled out — Siro and Eir. The chief executive of Eir, Carolan Lennon, made it clear last week that one of the reasons why her firm withdrew was because it was not commercially viable.
Among the late changes to the McCourt consortium was the withdrawal of the Irish Strategic Investment Fund (ISIF). Its presence in the bid was seen as a good example of how the State might use its resources to bring about an important piece of national infrastructure.
However, ISIF has a statutory obligation to invest in things which will bring about a commercial return and lead to an economic benefit. ISIF would not be allowed to use some of its €8bn investment fund for this project unless it could show there was a commercial return.
Its withdrawal from the consortium suggests it didn’t see a profit coming back. Going ahead could have been contrary to its statutory mandate.
McCourt’s fondness for breaking bread with the former minister creates the perception of a cosy relationship. In reality these meetings may have come against a backdrop of the Department of Communications playing hardball on the scale of State subsidy on offer.
Peter Smyth has been sent in to evaluate whether those meetings have compromised or undermined the tender process in any way. Smyth will review documentation and talk to whoever he needs to establish the facts.
His terms of reference give him three weeks to complete the job.
It seems highly unlikely that anybody he talks to will say the process is undermined by the meetings. Smyth might have to be quite clinical and even adversarial in his approach before drawing his conclusions.
Given that Naugthen had several meetings with McCourt, and at least one of them was not minuted, you’d think his civil servants would have warned him off meeting the bidder.
Can we conclude his civil servants were not told about some of these meetings where they were not present? If so they may not be best pleased with the performance of the former minister. He may have undermined a process they have been engaged with since 2012.
If they were told, surely they could have warned him about how such meetings might look. Maybe they did and he went ahead anyway? Smyth should get to the bottom of all of these questions but how much of his report will be published? His conclusions will certainly be known but what about the details, statements and documents that lead to those conclusions?
For the sake of transparency we should be provided with as much of the supporting documentation as is reasonable in a tender process that may not be over.
If Smyth concludes that no rules were broken and the process was not undermined, it will go ahead. The State has to drive a hard bargain on such a huge project. The cheaper the deal for the State, the greater the risk of the project running into serious difficulties further down the road.
Making high speed broadband available to every house in Ireland is one thing, ensuring the residents actually buy it is another.
The better the deal is for the bidder, the greater the chances of an unduly generous subsidy. Striking the balance here will be very difficult.
Given Leo Varadkar’s promise to make rural broadband a “personal crusade” and the arrival of his safe-pair-of-hands minister Richard Bruton in the department, the harder it is to see how the rug will be pulled from under this project.
My solution to the housing crisis is so much better than yours
SAN Francisco’s housing crisis has become a battleground for billionaire proposals on how to fix it. The city is in the throes of a deepening housing crisis as public anger grows about the cost of buying or renting.
One in 25 public school children is homeless in the city. According to a report by mortgage resource site HSH.com, an annual salary of $115,510 (€100,000) is needed to purchase a house in San Francisco where the median home price is $682,410.
More than 60pc of renters are in rent-controlled units, and even those have become less affordable.
Rent controls only apply to buildings completed before 1979. And we thought our rent control zones were dysfunctional.
Much of the problem has been driven by the economic success of the region and its enormous tech sector. Enter the tech billionaires who want to sort out the problem.
The chief executive of Salesforce, Marc Benioff, is putting money behind a new legislative proposal to force companies with sales of more than $50m to pay a tax (0.5pc of gross receipts) to fund affordable housing.
Benioff claims Stripe is hoarding money and opposing the measure. The Limerick-born Collisons, who own Stripe, say the proposal lacks a comprehensive plan for housing and they have donated to an affordable housing advocacy group called California YIMBY (Yes In My Back Yard).
YIMBY doesn’t build houses or fund affordable housing but lobbies politicians and conducts research into the crisis.
Benioff, however, may have some facts wrong by suggesting the Collisons had made $20bn, when their last investment round put that value on the Stripe business. Not the same thing.
From the outside this all looks like a rich squabble over who has the best plan for solving San Francisco’s housing crisis. It isn’t up to tech billionaires to solve it unless they want to donate money to build cheap or free houses. Alternatively politicians can step in and tax them given their financial success has contributed to the problem.
Imagine a tech tax to fund affordable housing in Dublin. Would the Government upset these multinationals in that way?
Well if they are a powerful group here, imagine the power they wield in San Francisco, which has 70 billionaires.
Eir backs the west life
EIR may have pulled out of the National Broadband Plan but it is going full steam ahead with its reorganisation programme following its takeover by French billionaire Xavier Niel.
Eir decided to end a large part of its outsourced customer care arrangement with Indian group HCL Technologies and take the jobs back in-house. Ending a chunk of its outsourcing deal with the company saw 750 people working for HCL in Dublin offered jobs with Eir — just not in Dublin.
This week Eir announced 750 new jobs in Sligo, Cork and Limerick. This is good news for these three regions, especially Sligo. For Eir its about making smart business decisions and making money. For Sligo, it’s a big shot in the arm for the region.
You have to wonder what role the housing crisis in the capital has played in the decision to locate in these three parts of the country. And one wonders how many of those working for HCL in Dublin decided to up sticks and head for one of the new locations and a new employer.
I suspect very few are heading for the hills given that customer care tends to be relatively low paid work with a high turnover of staff.
Many might see it as an opportunity to spend a couple of years in Dublin and then move on to something else.
Nevertheless Eir’s decision is interesting in two respects. One, it is saying it isn’t always best to outsource everything. And two, Dublin isn’t necessarily the only show in town either.