Chorus, the cable television and telecoms firm, may pull out of three State-backed infrastructure projects worth €72 million because of the current cash crisis undermining the telecoms sector.
A decision by Chorus to withdraw from the flagship projects would be a further blow to the Government's plan to encourage the roll-out of networks in the regions to enable its spatial policy.
Four other State-subsidised projects backed by Eircom and the bankrupt wireless firm Formus, have already either been scrapped or significantly delayed.
Chorus, which was offered about €20 million in Government grant aid in January 2001 to complete the projects, confirmed yesterday it may not be in a position to deliver all its planned networks.
Chorus was offered €21.45 million to help it build telecoms projects in Co Kerry, the south-east region and the Border, midlands and west. But it is understood Chorus is behind schedule in all of the projects and will not meet a two-year cap for completing its projects.
A spokesman for the Minister for Public Enterprise, Ms O'Rourke, said yesterday the department would not withdraw funding from the firm. "There are bottlenecks and delays. Telecoms is a fluid business. Officials from the department are monitoring the roll-out by Chorus," he said.
In a statement to The Irish Times yesterday, the firm said it was in discussions with a joint-venture partner on the largest project, the Cork fibre trunk, and it hoped to make an announcement on this within the next number of weeks.
"As for the remaining grant-aided elements, Chorus is re-assessing cable and wireless requirements on a case-by-case basis," the firm added.
Like most firms in the telecoms sector, Chorus is having to cope with an industry-wide credit crunch that is making it increasingly difficult for companies to fund capital expenditure. Chorus recently failed to meet some deadlines set by the telecoms regulator to upgrade its cable television network to enable it to offer digital television to its subscribers.
The Irish Times reported this week that the company, which is 50 per cent owned by Independent News & Media, lost €36.6 million last year before interest and depreciation charges. Independent News & Media's accounts show that it now values its 50 per cent interest in Chorus at €67.9 million following a decision to write €15 million off the value of its stake. This values the entire cable group at €135.8 million.
Meanwhile, the Department of Public Enterprise recently announced a €300 million plan to finance telecoms infrastructure throughout 127 Irish towns. This plan, if it goes ahead, may enable the State to plug any infrastructure gaps where private firms are not able to justify investment.
