Fianna Fáil claims Govt could introduce new charges to fund broadband project

Fianna Fáil has claimed the consortium behind the Government's broadband project may be planning to hit households with new charges to fill its own funding gap, before selling the contract onto another firm who will hike prices even further.

The party's finance spokesperson Michael McGrath made the claim and insisted the contract must not be signed. He would not say whether his party will bring down the Government over the financial crisis.

After the Government admitted the David McCourt-led consortium is putting just €220m towards the multi-billion euro project - a fraction of what was initially suggested - Mr McGrath said the figure is "incredibly low".

He said there are real fears households across the country who are meant to be the people to benefit from the plan are those who will ultimately suffer.

"The upfront commitment Granahan McCourt is €175m in equity and then €45m in working capital. I think the amount of money they are putting into this project is incredibly low," he said.

"I think we need to see the full contract, we need to see the terms of the various break clauses that are within this contract. It seems to me Granahan McCourt is going to be relying on revenue raised by consumers in order to meet their commitments.

There is a real concern here that because of the nature of the consortium. In essence it is an investment firm bringing in some expertise, but it's not a firm of itself that has expertise in this area.

"You may well see a scenario where this contract is flipped on, that this contract is sold on within a period of time and indeed those who are waiting too long for broadband will be left high and dry," he said.

Mr McGrath said he believes the "tone of the advice" from the Department of Public Expenditure - which urged the Government not to agree to the plan - was "repeated and sustained".

He said the Department's advice was "not just one letter" from its secretary general Robert Watt, and instead involved "the internal spending watchdog within Government flashing the red lights and shouting stop".

Mr McGrath said Fianna Fáil leader Micheal Martin "made our position very clear last week that this contract should not be signed," saying:

"The reality is the concerns, the really strong concerns raised by the Department have not been answered satisfactorily and the Government has an obligation to do that."

Mr McGrath said his party is determined to hold the Government "to account" on the issue.

However, asked specifically if Fianna Fáil's insistence the broadband contract must not be signed is a "red line" and if the party will bring down the Government over the stand-off, Mr McGrath side-stepped the question saying:

"Look that's not for us to say. We are in a process here, we are seeking the maximum amount of information for what is an enormous capital investment by this State.

It remains to be seen how this will play out in the end, and we think the Government should have a fresh look at the alternatives that have been put forward.

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