State ‘could have slashed telecoms cost’

Conor Keane, Business Correspondent

The Department of Finance has rolled over its estimated 60m-plus a year deal with eircom to provide fixed telephone and internet services to the public sector. The new contract will operate until 2007 and originally commenced in May of 2002. Telecom operator MinuteBuyer chief executive Brendan Moran said the rates that eircom are charging the Government are 30-40% higher than the rates available in the Irish marketplace.

“Cost savings of E20 million could be made for the taxpayer on a yearly basis, if the Government went to tender with this contract.

“We have seen the VPN (virtual private network) and fixed-line rates that eircom is charging the Government departments and State agencies. According to the figures for just one of the State agencies in Ireland, a cumulative saving of 37.57% could be made on the costs we have seen, simply by using other telecom suppliers,” he said.

Mr Moran said that in particular large savings could be made on the State agencies VPN Off Net charges (calls made off the Government VPN), where in some cases costs could be cut by over 50%.

The Department of Finance said they did not wish to comment on Mr Moran’s assertions except to say that the value of the contract “is not E60 million.”

Eircom, in a one-line response, said: “eircom is very pleased to be selected on the combination of price and quality of performance in providing what is a very complex solution.”