Broadband plan report: State will pay double

The taxpayer is set to pay twice as much as the private company awarded the National Broadband Plan contract, a report reveals.

A cost-benefit analysis of the National Broadband Plan suggests the cost to the State will be €1.922bn whereas the cost to the operator will be €974m.

The report produced for the Government last month was among a tranche of documents published after the cabinet signed off on the €3bn rural broadband provision. However, Finance Minister Paschal Donohoe and Communications Minister refused to say how much David McCourt’s consortium will have to invest despite mounting calls from the opposition.

Pressed on the €974m stated in the report, Mr Donohoe said: “I am aware of what are our estimates are for the different figures that the preferred bidder would be making available. I am not in a position to confirm that figure now, that is for two reasons.

“Firstly, contracts have not been signed. The second reason why is that we have a variety of private companies who come forward to be part of the delivery of really important services for our State every single day.

“As minister, if I was to outline what money they are putting in, it would raise big questions as to why other companies would want to approach us to be involved in the delivery of really important activity in Ireland,” he said.

Mr Bruton also refused to provide information in the Dáil by stating: “I’m not going to prejudice the final signing off” of the contract.

PWC, which carried out the analysis, found the project would deliver “a positive societal return, which extends significantly beyond those benefits which are capable of a credible quantification.”

While the cost-benefit analysis results were based on a central case scenario, PWC also made a pessimistic forecast which put the final cost of delivering high-speed broadband at €3.256bn.

The Government appears to have conceded it will end up paying €3bn alone when Vat and contingencies are calculated. PWC forecast households will gradually be connected to broadband services, but put the figure at 80% take up. However, the report pointed to the fact it did not have information on the number of homes and businesses that already have access to broadband.

“The cost-benefit analysis did not determine the level of broadband services currently available to enterprises within the intervention area which could under or overestimate the benefits arising from next-generation access broadband rollout,” the report stated.

They cited the fact “less-than-perfect” information is available on the quality of the current basic broadband services as a risk.

PWC excluded medium and large enterprises as it is assumed that given their size, alternative steps have been taken to gain access to sufficient broadband services. However they assumed small businesses would sign up.

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