National broadband plan: Far too many questions unanswered

Yesterday’s statement to the Oireachtas communications committee from Eir chief executive Carolan Lennon that her company could complete the National Broadband Plan for less than €1bn, a third of the figure the State has agreed to

National broadband plan: Far too many questions unanswered

Yesterday’s statement to the Oireachtas communications committee from Eir chief executive Carolan Lennon that her company could complete the National Broadband Plan for less than €1bn, a third of the figure the State has agreed to invest in the project, and a fifth of the estimated final cost, means the project must be revisited. There simply is no alternative if the public purse is to be protected, as it must be.

The Department of Communications, responding to Ms Lennon’s claim, pointed out that an Eir bid from September 2017 was “multiples of €1bn”. That may well be the case but that alone does not even begin to ally the growing concerns around this project, one that looks ever more like another expensive, runaway white elephant.

These concerns are exacerbated by the fact that in the heel of the hunt only one entity was interested in the project, giving it unprecedented leverage. That this consortium led by American investment vehicle Granahan McCourt, will, under current proposals, own the network at the end of the process that involved a €2.5bn public investment — at least — in infrastructure must raise concerns too, especially as that conclusion flies in the face of usual practice around public-private partnerships.

There has been no satisfactory explanation around this departure from well-established norms. This must provoke even more concern as the element of competition that makes PPS an attractive proposition for the State was absent. The committee heard Ms Lennon’s claims just days after University of Limerick economists argued the plan should be scrapped and more affordable alternatives considered.

The head of economics at the university, Eoin Reeves, warned that he and colleague Dónal Palcic, both specialists in public-private partnerships, concluded: “The current procurement should be terminated and more affordable alternatives explored.”

These loud alarm bells amplify concerns expressed, most unusually, in public by Robert Watt, secretary general of the Department of Public Expenditure who said the objective does not justify the risks and cost to the State. Despite Mr Pitt’s warnings, the Cabinet last month approved the plan.

This venture, like so many others rooted in the privatisation of Eircom, is shrouded in Vatican-grade subterfuge driven by Fine Gael, the party that promised to make accountability a force for good in public life. Details of the subsidy or how the State would share in any savings have not been published.

Nor have the penalties the company faces if it misses targets. Neither have revenue targets or the level of return built in for the investor. How profits might be shared if return is higher than anticipated is a secret too.

There are other issues that fall into the trust-us-we’re-from-the-Government category.

Fine Gael regularly shows an empathy with big business that puts the concerns of the public in a secondary position. It is time to accept that the National Broadband Plan now falls into that category — unless commonsense and transparency prevail and Government finds the grace to admit its proposals are at best questionable and at worst reek of something undeniably sleazy and wasteful.

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