National Broadband Plan contractor hit with sanctions for failing to meet targets

To the end of August, 75,590 premises had been passed as part of the plan.

The contractor delivering the €2.7bn National Broadband Plan has been hit with sanctions of more than €150,000 for failing to meet its targets this year, with the programme 12 months behind schedule.

After revising down its target of 115,000 premises “passed” — where a high-speed broadband connection would now be available — by the end of January to 60,000, National Broadband Ireland was only able to pass just over half of that target.

Furthermore, National Broadband Ireland was allowed to retrospectively reduce a target of passing 8,000 premises in January 2021 to zero.

In the Comptroller and Auditor General’s report on the accounts of the public services for 2021, it also notes that in April of this year the target for January 2023 was reduced to almost 102,000 premises which is just under half the original target.

To the end of August, 75,590 premises had been passed as part of the plan.

The C&AG report said: “Following detailed analyses of the remedial plans submitted by NBI (in March 2021 and February 2022), the Department agreed to the reductions in the targets proposed by NBI.

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“The Department concluded, on foot of the remedial planning processes under the contract, that the delays in delivery were mainly due to the Covid-19 pandemic (8.5 months), which impacted the delivery of the fibre network. However, the Department imposed sanctions for delays, which it concluded were not directly linked to Covid-19 and related to issues within NBI’s control (3.5 months).” 

Because the original targets have not been met, the money spent by the Government so far on the plan is also far less than planned.

Of the €371.3m allocated for 2020 and 2021, payments totalled €177.2m.

While the plan has connected tens of thousands of premises, the actual take-up of high-speed broadband at these homes and businesses was lower than estimated in January of this year. 

By August 2022, more than 18,400 premises had been connected which represents a take-up rate of 24%.

Under the terms of the contract between the Government and National Broadband Ireland, there are over 1,000 milestones whereby contract subsidies are not paid in full until the pre-agreed milestones have been confirmed as delivered.

Since the start of February, financial sanctions apply for a delay in the achievement of build-related milestones.

The C&AG said: “To August 2022, delay sanctions totalling €134,800 have been imposed in relation to build-related milestones for delays in passing deployment areas. However, this is refundable if (or when) NBI achieves other build milestones ahead of its target. In addition, a performance credit sanction of €22,500 has been applied under the KPI regime.” 

It said that National Broadband Ireland had raised concerns on the “proportionality of sanctions” likely to accrue under the current KPI regime.

Brian Stanley said he was worried about the progress of the broadband plan. Picture: Gareth Chaney/Collins

Sinn Féin TD Brian Stanley, who chairs the Oireachtas’ Public Accounts Committee, said he was “very concerned” by the progress of the National Broadband Plan as outlined in the C&AG report.

“But I am also underwhelmed by the financial sanctions imposed so far,” he said. “Considering the contract is worth almost €2.7bn to the private investor, a sanction of €157,500 is a drop in the ocean.”