Decision on roll-out of rural broadband delayed

A decision on the National Broadband Plan will not be made until the new year, as officials in the Department of Communications are still working on evaluating the only tender for the project.

It is understood that on Tuesday, at the final Cabinet meeting of the year, Ministers will not be asked for a decision on the tender, which was submitted last September.

The process to award the State contract to build a network of fibre-optic cables to bring high-speed broadband to every home in remote parts of the country has been beset by controversy this year, with bidders dropping out and the minister responsible, Denis Naughten, being forced to resign after details came to light of private meetings with the remaining bidder.

However, Ministers were hopeful that the process could be concluded by the end of the year, with a decision to proceed on the plan, but it has now emerged that no decision will be made until the new year.

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It is expected that officials will conclude their evaluation of the tender – submitted by a group led by US businessman David McCourt – in January. After that, the new Minister for Communications, Richard Bruton, will bring a recommendation to Cabinet to accept or reject the tender.

There have been fears in Government for months that the total cost of the project could be as much as €3 billion. Although industry sources have suggested the final figure is unlikely to be as high, it is understood that warnings about a €3 billion potential cost were abroad in Government some months ago.

Not fatal

A recent report into the broadband process by independent auditor Peter Smyth said the then minister for communications, Denis Naughten, had been brought into a meeting with the bidders last June to warn them that the suggested State subsidy was too high, and that he would be unable to bring a recommendation to Cabinet to approve the figures sought by McCourt’s group.

Mr Smyth found that, despite the meetings between Mr Naughten and Mr McCourt, which included private dinners, the process had not been fatally undermined and could continue. However, in making that judgment, he relied on the accounts of the two men that they had not discussed the terms of the contract privately.

A project to roll out fibre broadband to every home in the country has been a commitment of the Government for several years. While much of the country has been covered by commercial operators, more remote areas are uneconomic for telecom companies to build infrastructure in, so the Government has promised to step in. The project has been beset by delays, however, with “shovels in the ground” not expected until next year at the earliest. The Government has reiterated its commitment to build the network, but it has been criticised because the State will not own the network once it is built. Others believe that the take-up of the service is likely to be low.