Government under fire for awarding major telecoms contract without tender

The Government has come under fire for failing to put a major telecommunications contract out to tender and for presiding over a deeply uncompetitive pricing structure.

At a meeting of the Public Accounts Committee (PAC), BT Ireland's Peter Evans said his company and others in the telecoms sector were surprised and disappointed at the Government's decision to renew telecoms firm Enet's contract to operate the State-owned Municipal Area Networks (MANs), a series of telecommunications networks built around 94 towns, without a tender.

The contract, which was renewed in 2017, is said to be worth at least €20 million a year to Limerick-based Enet. It was issued at the same time as Enet was one of the lead bidders, and subsequently the only bidder, for the Government's National Broadband Plan (NBP).

Former minister for communications Denis Naughten was forced to resign last year over his meetings with US telecoms magnate David McCourt, Enet’s financial backer.

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A subsequent audit of the NBP tender process by independent assessor Peter Smyth cleared Mr McCourt and Mr Naughten of exerting any undue influence on the tender.

Asked if Enet’s contract renewal represented a fair and transparent process, Mr Evans told the committee “there wasn’t a process at all.”

He said BT Ireland had made an application to the Department of Communications to participate in any upcoming tender process in relation to MANs only to be told that the contract had already been renewed.

Report

Mr Evans’s comments come a day after the Government published report, criticising Enet’s operation of the MANs network and calling for a price reduction of 50 per cent.

The report, carried out by Analysys Mason consultants, was submitted a year ago but only published by Government this week.

It examined the pricing of MANs products and Enet’s compliance with the regulations and called for a reduction in the maximum annual price of dark fibre by more than half to €2.60 per metre.

“Pricing for the MANs hasn’t changed downwards in 15 years, which is unheard of in the telecoms industry, prices are falling and have been falling rapidly,” Mr Evans told the committee.

“So the same prices, two days ago, were the same prices that were there in 2004,” he said.

On foot of the report, Minister for Communications Richard Bruton has also asked telecoms regulator Comreg to investigate whether Enet gave its retail arm an unfair advantage in access to the networks.

Later Eir chief executive Carolann Lennon said she regretted her company’s decision to exit the NBP process last year, but the contract, if secured, she said, would have meant “duplication and inefficiency”.

She also rejected the claim that Eir’s move to take 330,000 homes originally earmarked for the plan on a commercial basis had damaged the NBP’s viability.