Govt pays €7.7m to Global Crossing

The government has paid €7.7m to Global Crossing under the terms of its existing €126m contract with the company, according to reports.

It was claimed that despite the Chapter 11 bankruptcy of the company's parent in the US and uncertainty of the future of the business in Europe, that the payment was sanctioned by minister for communications, marine and natural resources, Mr Dermot Ahern.

It is believed that the payment was made in order to ensure that Global Crossing continues its service in Ireland, which supplies a third of the State's international telecoms connectivity.

According to the paper, the government renegotiated elements of the 1999 contract with Global Crossing, winning a commitment from the firm to invest further cash in the Republic.

As part of the deal, Global Crossing will provide a point-of-presence that will manage bandwidth and traffic from its transatlantic cable.