Auditor’s report expected to find broadband tender not fatally damaged

The independent auditor's report into the tender process for the State's rural broadband contract is expected to find that the process has not been fatally damaged by meetings between the sole remaining bidder and the former minister for communications Denis Naughten, high-level sources say.

The report, by the auditor Peter Smyth, was delivered to the Government in recent days and is being reviewed by the Attorney General Séamus Woulfe. Sections of the report had been circulated to people mentioned in it, a Government spokesman said yesterday.

It is expected to be published in the coming days.

However, The Irish Times understands that Mr Smyth will not recommend that the process should be abandoned. Several sources in Government said they believed the process would now continue.

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The Department of Communications is continuing to evaluate the bid for the contract submitted by a consortium led by the Irish American businessman, David McCourt.

Private meetings

Mr Smyth was asked to perform a review of the tender process after Mr Naughten was forced to resign in the wake of revelations that he had held a number of private meetings with Mr McCourt, head of the sole remaining bidder for the contract.

Taoiseach Leo Varadkar announced the review in the wake of Mr Naughten's resignation, in answer to fears in Government that the process had been fatally undermined by the private meetings between Mr Naughten and Mr McCourt.

Ministers were told at yesterday’s Cabinet meeting that the review had been delivered and was being examined by the Attorney General but its contents were not discussed.

Yesterday in the Dáil the Taoiseach said the report would be published, but that some parts of it may be redacted for reasons of commercial sensitivity.

However, political sources say that significant concerns remain about the project in Government, especially relating to the escalating costs. While the project was expected to cost in the region of €500 million at the outset, people in Government now fear that the final cost could be as high as €3 billion, though industry sources have expressed surprise at the estimate.

Take-up

In addition, Government sources have been alarmed at the low-take up of broadband services offered by Eir, which is installing high-speed broadband in many towns and villages.

The decision on the contract to connect half a million homes and premises in rural and remote areas to high-speed broadband is long overdue. The process has been dogged by controversy and has seen bidders Eir and the ESB-Vodafone joint venture Siro withdraw, leaving Mr McCourt’s company as the sole remaining bidder.

His bid was originally fronted by Irish telco Enet, but he has since sold his remaining stake in the company and now the bid is being led by his main investment vehicle Granahan McCourt.