Both Eir and ESB have come before Oireachtas committee hearings this week to give statements on the National Broadband Plan. What actually happened?
The Joint Communications, Climate Action and Environment Committee held a series of hearings this week to further investigate the National Broadband Plan (NBP). The hearings sought clarity on the plan and how best to proceed with the roll-out of rural broadband.
“The committee initiated these hearings to investigate concerns around the roll-out of rural broadband to more than 540,000 homes and businesses,” chair of the committee Hildegarde Naughton, TD, said in a statement.
Last we heard of the broadband plan, the Government had committed to putting pen to paper within six months, with construction on necessary infrastructure to begin this year. The National Broadband Ireland consortium, led by Granahan McCourt (founded by business mogul David McCourt), will aim to connect 1.1m across Ireland to high-speed broadband within the next seven years. Have these latest statements changed anything?
What did Eir say?
Eir CEO Carolan Lennon appeared before the Oireachtas committee on 25 June and made a rather contentious claim – namely, that the company could roll out the NBP for less than €1bn, which is one-third of the price the State is expected to put on the plan. In other words, Eir has claimed it can deliver rural broadband at the project’s original price tag.
Lennon said that if the Government decided not to proceed with the signing of the NBP contact that Eir would be interested, and further claimed that her predecessor, Richard Moat, had told the Department of Communications last January that Eir had said it could carry out the project for a reduced price.
Those who criticised the claim pointed out that Eir’s actual NBP draft bid was far higher than €1bn. In fact, Government officials have said it was in the range of multiple billions.
Subsequent to the claim being made, An Taoiseach Leo Varadkar, TD, said the Department of Communications has written to Eir to seek clarification on the comment. Varadkar told the Dáil that this was a “big turnaround” and they wanted to clear up “whether this offer is real, if it stacks up”.
He added: “We need to know what kind of delay would be imposed on people in rural Ireland waiting for broadband if we went back to a new procurement process.”
What about ESB?
Remarks delivered at the Oireachtas committee hearing on 26 June confirmed much of the speculation that had swirled around when ESB – via Siro, its joint venture with Vodafone – pulled out of the NBP tendering process in 2017.
The ESB explained that the removal of 300,000 customers from the “target market” of the NBP factored into the decision to remove itself from consideration, as the reduced revenue meant there was no longer a business case for participation.
“When the 300,000 premises were removed it had a very serious impact on the potential and the projected revenues that they would see over 10, 20, 30 years of the project and that is what made it really challenging,” ESB’s head of strategy and innovation, Denis O’Leary, said.
“Removing such a large number of premises also had a major impact on the design of the network,” he said, adding that this required months of work “to repeat the mapping exercise and create a new network design”.
The decision to remove the 300,000 homes was a controversial one that placed the homes back into Eir’s commercial roll-out plan.
What does this change?
Should the offer from Eir prove legitimate, the Government may be forced to reconsider who it elects to head up the plan, which could throw a spanner in the works for Granahan McCourt.
Yet crucially, restructuring the plan yet again would likely cause even further delays, something the Government will presumably want to avoid as the rural population’s patience begins to fray and the prospect of a general election looms large.
The opposition has already levelled stern criticisms of the plan’s ballooning cost, which Sinn Féin communications spokesperson Brian Stanley, TD, claimed would exceed the overrun of the National Children’s Hospital.
So, while the prospect of cutting costs and removing that bullet from the opposition’s arsenal is likely extremely attractive, potential further delays would prove a risky political move, as would further allowing the plan to languish in ‘development hell’.