A US-BASED telecoms equipment company, backed by Goldman Sachs and JP Morgan, is considering pulling the plug on a €50 million investment in Ireland due to delays by the Office of Public Works (OPW) in fulfilling a contract signed almost two years ago.
Shared Access, which builds and operates shared wireless infrastructure in the US, Britain and Ireland, agreed a deal with the OPW in July 2008 to fit masts and other equipment at 375 Garda stations that could be leased to mobile phone and other telecoms operators.
Shared Access was then to manage the network of stations, with revenues shared with the OPW.
So far only about 12 of the projects at Garda stations have been developed and, frustrated by the length of time it is taking to get the green light for stations, Shared Access is considering pulling the plug on the deal.
“Commercially, we have to make a decision,” Chris Jackman, Shared Access Ireland’s chief executive, said. “We are not investing our capital in the way we intended. We have been very patient, but clearly if the investment isn’t wanted, we’ll have to take it somewhere else.”
Mr Jackman said the matter would be discussed at the company’s next board meeting at the end of April. “We are in the middle of making the decision right now.”
Shared Access intended to spend close to €50 million in Ireland, with money provided by Goldman Sachs and a JP Morgan spin-off in the US. Mr Jackman said these funds could now be invested in other European countries.
Any pull back by Shared Access would be a blow to the Government’s plan to develop the so-called Smart Economy. Operators had also hoped the new masts would help to extend broadband connectivity to many rural areas not currently covered.
3 Ireland, which is charged with the roll-out of the National Broadband Scheme, had agreed to use some of the 375 Garda stations that Shared Access planned to equip.
In a statement, 3 Ireland said: “There are a handful of areas that would benefit from Shared Access mast sites, and we are keen to see these progress as quickly as possible so we can bring high-speed broadband to rural communities.”
Shared Access already manages a network of masts and equipment at 220 Garda stations under a separate contract with the OPW. These are leased to O2, Vodafone, 3 and Meteor.
It is understood that revenues accruing to the OPW could double to up to about €10 million a year if the 375 Garda stations were fitted out as planned.
Mr Jackman said the delay was due to sites not being made available by the OPW and An Garda Síochána.
In a statement, the OPW said: “The final decision on what Garda sites are made available for development rests with An Garda Síochána for operational reasons. The agreement with Shared Access outlines 375 Garda sites that, subject to the necessary approvals, might be utilised for mobile telephony. The contract does not bestow a commitment to use any particular station.”
The OPW also said the contract with Shared Access does not cover broadband. “The contract with Shared Access . . . [is] for the provision of GSM/3G mobile telephony services. The contracts/licences are not, and never were, for the provision of broadband. Public procurement issues would arise if existing contractual arrangements were arbitrarily changed.”
