National Broadband Plan 12 months behind schedule

The 7,000 rural homes connected for high-speed internet as part of the National Broadband Plan to date represents just 1% of the target.

The rollout of Ireland’s €3bn National Broadband Plan is currently 12 months behind schedule, according to the Department of Communications.

Officials from the department with oversight responsibility for the controversial plan appeared before the Public Accounts Committee (PAC) this afternoon and admitted that “in absolute terms” the contractor National Broadband Ireland (NBI) “has not delivered” to date.

Mark Griffin, the Department’s chief, said that to date he had expected that at least 60,000 of the target 554,000 rural homes and premises would have been in a position to connect to high speed broadband, but that just over half of that figure has been achieved.

“When you look at it in stark terms, you would say, ok, there is a problem there, and we haven’t hit where we needed to be, and there are reasons for that,” Mr Griffin said.

The department’s project manager said that if there are delays to the project it is up to NBI to inform the department. 

“They have to notify us if they’re 3 months, 6 months, or in the current instance they’re 12 months delayed,” he said.

Mr Mulligan said that while penalties have not yet been applied to NBI, the plan itself has had €50m in State subsidies withheld to date due to project milestones being missed.

He said that there is no certainty over what NBI’s target for end-2022 will be.

“We want them to go faster,” he said adding that a target will only be agreed “once we’re satisfied it’s the maximum they can achieve by the end of the year”.

Just 7,000 rural connections

Earlier, the PAC heard that just 7,000 rural homes have been connected for high-speed internet as part of the National Broadband Plan to date, representing just 1% of the target.

In the morning session before the PAC, NBI said the plan was nevertheless on course to meet its final target date of end December 2026.

The meeting heard NBI’s revised target for the end of 2022 is to install the infrastructure for an internet connection, a process referred to as "passing", at 130,000 premises, a figure just 15,000 greater than the initial target for end-2021.

The 2021 figure had been revised down previously to 60,000, a figure which itself was missed by just under 30,000 connections. Currently, 38,000 premises have been connected, the meeting heard, just 7,000 of which are in rural areas.

Regarding the delays to the project, some of which has been attributable to the Covid pandemic, Peter Hendrick, the NBI chief executive, said there had been “learnings” in the past two years.

“As we build out, we’re learning how to do things more efficiently. Any delay we have to put forward with evidence,” he said.

Mr Hendrick said the average cost to both pass and connect a home was roughly €3,000, rising to €5,000 when taking into account rental costs over the 25-year timeframe for the plan.

Encroachment by other providers

The issue of encroachment by other providers was discussed at length. Mr Hendrick said there was the potential for 31,000 premises being “overbuilt” by Eir — some of that attributable to already existing infrastructure — which could see the €100m encroachment contingency fund tapped.

However, he said just because a home was overbuilt did not mean that Eir would necessarily provide internet to that premises as “the cost of connection may be too high”. To date, the encroachment fund — which forms part of a €500m contingency fund — has not been accessed, he said.

In terms of the ownership structure of NBI, the committee heard there had been no change in that structure over the course of the plan to date, though Mr Hendrick said as the project “evolves”, some early-stage investors would likely “be replaced with investors who specialise in long-term investments”.

Regarding the nature of the initial €100m put into the project by NBI’s shareholders, which was achieved using just €2m of equity with the rest coming from high-interest loans, Mr Hendrick said “there are unquantifiable risks in this project that many would not have taken on”.

The contract itself was signed in 2019 by the Granahan McCourt consortium, which was the sole bidder for the project after a number of high-profile dropouts.