'My Department has a different view', says Donohoe as he defends broadband plan

Finance Minister Paschal Donohoe has defended his decision to overrule his own officials on the €3bn National Broadband Plan saying it was "the best decision available to the Government."

It comes after the Government was warned that going ahead with the plan may mean cancelling other large capital projects.

In an address to media, he said this evening that he considered issues including climate change and the gap likely to develop between citizens if one group has access to hi-speed broadband and one does not, in arriving at his decision.

He said he made his decision to roll out a €3bn broadband plan "after a huge amount of work and a large amount of reflection".

He said access to that kind of connectivity will be very important in how people access public services, in the future and his decision was made "for economic growth that's more inclusive".

He said: "The roll-out of high-speed broadband is on balance, the best decision available to the Government

"There is risk, there is complexity, but I believe that funding model is the best to deal with that risk."

"Rolling out a form of technology like this to a million of our citizens...is an inherently risky and complex activity...If it was neither, the private sector would already have delivered this."

He said projects outlined in the Government's Project 2040 plan would continue to go ahead, despite the costs of the broadband plan.

He said the balance had been struck for the State in rolling out a new service and protecting the State from risk, and that, on balance, this was "the best decision available to the Government".

The Minister for Public Expenditure Paschal Donohoe said he had received lots of different advice in relation to the broadband issue, and that there had been "really robust debate".

"My Department has a different view in relation to this" to his own view, he agreed.

Paschal Donohoe said Secretary General of his department, Robert Watt, was "one of the most talented people I have ever worked with", and that he had been delighted to re-appoint him to his role in the department.

He acknowledged that the decision to roll out the national broadband plan is one of the biggest of his career.

“Having weighed all the risks...I believe this is the right thing for us to do.”

The Department of Public Expenditure earlier warned social housing, health and education investment may have to be delayed or cancelled to fund the €3bn plan.

The top public spending civil servant warned this would be the Government taking a leap of faith and opening the Government to unprecedented risk.

The Dáil was suspended earlier to allow time for the opposition to read new documents.

Fianna Fáil leader Micheál Martin questioned whether it is the right plan.

He accused the Government of attempting to "spin its way out of any serious questions or accountability around the project".

Sinn Féin's Mary Lou McDonald suggested that in a worst-case scenario billions of taxpayers' money will be "poured down a black hole".

Communications Minister Richard Bruton, however, defended the decision to go ahead with the plan.

He insisted: "This is a major decision to ensure that rural Ireland - including 1.1 million people - get equal access to a technology that is going to transform our lives.

"It's already transforming our lives, and it's going to make a huge impact on rural communities."

Documents published this afternoon show that public spending officials said it represents an "unprecedented risk" to the State.

The correspondence shows the Department strongly warned against appointing the preferred bidder yesterday for the almost €3bn project.

Officials were significantly concerned about cost and affordability.

It warned about the impact on the National Development Plan and that some other capital projects may have to be shelved to afford the broadband plan.

Officials called it an unprecedented risk to the exchequer - and recommended an alternative approach of incremental improvements in broadband.

One document compiled by officials states: "Poor take-up of the service or emerging new technological solutions in this fast moving market could leave the State having funded a stranded, or potentially obsolete asset - an asset that the State will not even own, despite investing up to €3 billion in it.

"We believe that significant progress can be made with an alternative affordable approach, with strong deliverables possible in the short-medium term within the context of a more realistic and affordable budget (of, say, €1bn), prioritising completing critical investments in the short term."

Robert Watt, Secretary General of the Department of Public Expenditure and Reform, also expressed his concerns in a letter to Mark Griffin his counterpart in the Department of Communications.

The letter warns committing to the plan would be a major "leap of faith" by the Government.

Mr Watt highlighted the "unprecedented risk that the State is being asked to bear in the event that the current NBP contract is recommended for approval by Government".

In response, Mr Griffin defended the plan, insisting that his department had carried out "rigorous analysis over the past three years to show that the project is complaint with the Public Spending Code."

He insisted the broadband project is "very different" from the National Children's Hospital - which has experienced major cost overruns - and that a "robust budget model" had been developed to reflect construction and revenue risks.

Meanwhile, Mr Watt also told Finance and Public Expenditure Minister Paschal Donohoe that officials "strongly recommended against the plan on grounds of cost, affordability, value for money and risk".

He further suggested that the procurement process should be cancelled.

Minister Donohoe ultimately overruled the concerns and recommended Cabinet approve the plan.

He said he believes on balance that the benefits outweigh the concerns of spending officials.

Under the plan approved yesterday, there will be €3bn of State subvention for a private company to roll out broadband to 540,000 homes and businesses in rural areas.

The first new homes will be connected in 2020 - but thousands of others may have to wait years to be on the grid.

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