Taoiseach supports Oireachtas investigation into €5bn broadband plan

Taoiseach Leo Varadkar has said he supports an Oireachtas investigation into the national broadband plan, amid opposition warnings that billions of euro more must be found to fund the project.

Debate over the broadband plan rumbled on during Leaders Questions in the Dail with the Opposition also rubbishing a cost-benefit analysis into the high-speed network proposal for 540,000 premises.

The Oireachtas Communications Committee is today expected to agree to a fresh probe into the €5bn plan, including more scrutiny of the government's handling of the bidding process.

Fianna Fail wants more analysis of Granahan McCourt's limited €220m equity investment in the plan as against the taxpayer's contribution of €3bn. Party TD Timmy Dooley specifically wants answers as to the role played by Frank McCourt, a brother of the principal investor, in the bid. He also wants answers as to why consultants KPMG advised that a gap-funded model was the best option for the plan.

Mr Varadkar supports the investigation. He told the Dail: “I would have no objection to that whatsoever. I just believe we should ensure there is reasonable timeframe around them and the terms of reference are agreed by the major parties.”

He faced repeated questions from Fianna Fail leader Micheál Martin over the extra costs for the broadband project to the taxpayer.

“Signing this contract, for example, means an extra €500 million has to be found between 2019 and 2022. An additional €1.5 billion has to be found in the national development plan, over and above the €800 million already allocated for the plan.

“This funding is on top of the additional funding of €385 million required for the national children's hospital over the next three years. There is no provision anywhere for this funding, despite the Opposition asking basic questions as to from where the funding will come,” said Mr Martin.

A cost-benefit analysis on the bid is also being questioned. Mr Martin said a memo from the Department of Public Expenditure pointed out that, at the last minute, the actual benefits, as well as the cost of the bid, were reduced “fortuitously” by €1 billion due to an error.

Department secretary general Robert Watt said the cost-benefit analysis was “not credible and “is questionable (as to) whether it is consistent with the public spending code.”

Mr Martin wants to know why this cost estimation was changed at the last minute.

“I would not use the phrase “cook the books” but it demands some serious questioning by the Taoiseach and everybody on this side of the House as to the cost-benefit analysis. How was it only spotted at the 11th hour? What went on?”

But Mr Varadkar stood over the cost estimates for the project.

He said there would be “no budgetary impact in 2019” and a “minimal Impact in 2020” because of the promised €5bn broadband plan. Nonetheless, there will be a budgetary impact from 2021 onwards and Public Expenditure Minister Paschal Donohoe will outline more on this in the summer economic statement in a few weeks’ time, the Dail heard.

Mr Varadkar said: “I stand over the cost-benefit analysis. Yes, errors were detected along the way but the final cost-benefit analysis, after all corrections, still showed that this is a positive project and that the benefits outweigh the costs in all scenarios.”

Meanwhile, it has emerged the Government has spent more than €14 million on reports from consultancy firms about the broadband plan.

Consultancy firms PwC and KPMG have been paid €2.41m and €11.6m respectively, the Department of Communications confirmed in written correspondence.

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