Broadband plan: Opposition call for McCourt investment level to be revealed

Consortium set to pay just €974m of total broadband cost

Broadband plan: Opposition call for McCourt investment level to be revealed

The private operator behind the controversial National Broadband Plan (NBP) will only put up €974m, less than a third of the €3bn cost to the taxpayer.

Despite calls from the Opposition to reveal the McCourt contribution, ministers refused to confirm what the Granahan McCourt consortium are expected to invest in the scheme.

However, documents released by the Government revealed the estimated contribution from the firm, which was the source of stinging criticism from the top spending official in the country.

Finance Minister Paschal Donohoe told the Irish Examiner he was aware of the estimated contribution but would not confirm what the actual number will be.

“I am aware of what are estimates are for the different figures that the preferred bidder would be making available. I am not in a position to confirm that figure now,” he said.

The revelation comes as devastating criticisms of the NBP from the country’s top spending officials in Mr Donohoe’s department were revealed.

“We strongly recommend against approval of the appointment of the preferred bidder to the current NBP procurement process on the grounds of: cost and affordability, impact on the National Development Plan and on projects forgone as a result, value for money and specifically uncertain benefits, unprecedented risk for the Exchequer and compatibility with Project Ireland 2040,” a memorandum from Robert Watt, secretary general of the Department of Public Expenditure to Mr Donohoe said.

Officials warned that the reallocation of funds for broadband “would have serious implications” for other planned investments, which would require the cancellation or delay of a wide range of projects.

To fund broadband, the officials warned that a reduction of €300m in the Department of Housing would be required, meaning the cancelling the delivery of €1,500 social houses.

It will also mean a €200m reduction in Transport which equates to the entire budget last year for repairing regional roads.

In health, it will mean the cancellation of eight primary-care centres, and in education, it will mean a hit of €130m and the axing of 26 primary schools.

In terms of value for money, Mr Watt and his officials said they had “major concerns in relation to the cost benefit analysis”, saying the justication for the cost “has not been demonstrated satisfactorily”.

“This involves excessive costs and risks for the Irish taxpayer with questionable benefits, many of which are private benefits but to be funded at public cost,” the officials warned.

Mr Donohoe accepted the €3bn National Broadband Plan is an “unprecidented risk,” but insisted it is a risk worth taking.

Defending his decision to eschew stark warnings from his most senior officials about the plan to the State, Mr Donohoe said “on balance” seeking 100% broadband coverage across the country deserved to be approved.

“As minister I have to receive advice, but I ultimately have to make a decision in relation to what to do.”

He said he believes there are safeguards within the contract for the project that “are capable of securing our needs as this project rolls out”.

Mr Donohoe said he would not be pulling funding from other areas in order to fund the project, which may cost up to €2.7bn.

It was also not his plan to change existing commitments to other priorities.

“This is why it is all the more important to be clear that it is my intention to deliver new capital funding to ensure we can deliver this plan in addition to our existing commitments.”

Taoiseach Leo Varadkar has said he “absolutely” has confidence in a senior civil servant who advised against proceeding with the National Broadband Plan.

Mr Varadkar said he has tremendous respect for Mr Watt. He said Mr Watt and his team gave very strong advice against the plan, but that the Government has to make a decision on the balance of advice.

He said this advice also included an independent cost-benefit analysis which showed that in all scenarios, the benefits outweighed the costs.

Mr Varadkar said maybe the plan was a leap of faith, but that it was a “leap of faith in believing in the future of rural Ireland”.

While the Taoiseach confirmed confidence in Mr Watt, he said “it doesn’t mean we’ll always agree and we don’t always agree”.

He added would not like to be in a government where everyone always agrees and where officials did not raise concerns or alarms, describing such a scenario as “groupthink”.

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