Bruton will not confirm whether broadband bidders will put up between €300m and €400m of the €3bn bill

Tanaiste Simon Coveney, Fine Gael candidates Frances Fitzgerald and Mark Durkan and Minister for Communications Richard Bruton at the launch of the Dublin Euro Election Press Conference today. Photo: Sam Boal/RollingNews.ie

Communications Minister Richard Bruton has refused to deny or confirm whether the bidders for the costly rural broadband plan will only put up between €300m and €400m.

Criticism continues over the State's €3bn bill for the seven-year project and there are questions about how much the McCourt-led group will invest initially in the plan to connect 540,000 premises.

While Mr Bruton confirmed in the Dáil that the overall cost to build the network will be €5bn, including €3bn from the state, he declined to be drawn on the investors' funds.

Fianna Fáil's Timmy Dooley said that, from the figures available, it seems the McCourt-led consortium will only put a limited amount behind the plan despite the huge bill for taxpayers.

The Clare TD said: “The equity being put in by Granahan McCourt is probably somewhere in the €300m and €400m ballpark.”

Mr Bruton said he would not confirm anything ahead of a contract being signed, which is expected to be in the autumn.

But the Opposition TD explained how, on top of the State's €3bn payment for the deal, the private company looks likely only to invest the small amount.

He said: “Given that the Minister is neither denying nor confirming it, I take it that €300m to €400m is in the ballpark of the equity that Granahan McCourt will contribute to this. My assumption is that thereafter, the rest will be by way of debt or syndicated debt.

"We are also conscious that the project will generate somewhere in the region of €1.5bn to €2bn over the lifecycle of the contract.”

Several TDs in the Dáil accused the Government of announcing the deal as an “election ploy”, ahead of voters going to the polls later this month.

Social Democrats TD, Róisín Shortall, also questioned why there are so many sub-contractors for the deal while Green leader, Eamon Ryan, called for a review of the plan and improvements to it.

Earlier, Tánaiste, Simon Coveney, denied that the decision to approve the National Broadband Plan is linked to the upcoming local and European elections.

Mr Coveney said that while the Department of Public Expenditure and Reform has tested the controversial decision “very robustly, the Department of Communications, Climate Action and the Environment has defended that decision very robustly.”The job of Government, he said, is to make decisions and to explain them.

Earlier: Bruton refuses to state cost for rural dwellers of €5bn broadband rollout

By Elaine Loughlin

The Communications Minister has refused to say how much of the €5bn broadband rollout cost will be footed by rural homeowners and businesses.

Richard Burton said around 50% of the total cost of the project over 25 years will be carried by the private investor led by David McCourt as well as subscribers who pay to hook up to that service.

However, he would not provide a breakdown as to how much customers would pay compared to the company rolling out the service.

The State will put €3bn into the delivery of the National Broadband Plan (NBP).

Tánaiste Simon Coveney said the decision to press ahead with the NBP would future-proof the country.

"It's about making sure that we don't knowingly allow a deep divide to develop between rural parts of Ireland and urban parts of Ireland.

We know the appetite in urban parts, in urban centres for fixed-line high-speed broadband and we know that the market simply won't deliver that type of infrastructure to about 23% of the population, or 540,000 premises.

He said that there is "no perfect time to commit to spending significant amounts of money like this" but said the Brexit challenge "reinforces" the need for broadband to ensure we remain competitive and have sustainable economic growth.

"I think it would have been the wrong decision to wait for full certainty around Brexit which may take years before it's fully clear in terms of what the future relationship will look like," Mr Coveney told a Fine Gael event for the party's Dublin European Election candidates, Frances Fitzgerald and Mark Durkan.

Attending the same event, Mr Bruton confirmed that €5bn plus VAT is now the estimated cost.

"It is the estimate being used of the total cost of rollout, of design, build and operate over 25 years.

The State, the total cost, maximum worst case cost is €2.97bn, of that excluding VAT that brings you back to €2.6bn - so excluding VAT - and of that €545m of that is a contingency fund, that will only be drawn on in very explicit specific circumstances where they can show an audited basis that certain contingencies have arisen.

He also admitted that a separate deal with Eir which syphoned off 300,000 properties "undoubtedly has impacted on the cost" of the McCourt contract.

"By and large you have to pass the same number of premises even though you don't have to connect as many," said Mr Bruton.

Documentation released by the Government on Wednesday showed that Department of Public Expenditure Secretary-General Robert Watt strongly recommended against the Government appointing the preferred bidder on grounds of affordability, risk and value for money.

"The State is taking an unprecedented risk with this project," Mr Watt warned.

However, Mr Coveney said the significant difference of opinion would not create difficulties between Mr Watt and Minister Paschal Donohoe.

"Robert Watt has a job too, to really test expenditure in terms of how decisions are made and how money is allocated. But ultimately the Government has to collectively make a decision and in my view in time it will be shown to be the right decision," the Tánaiste said.

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