Secret row over broadband cost: Varadkar told €3bn cost is not value for money

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Secret row over broadband cost: Varadkar told €3bn cost is not value for money

  • Secretary General warns Varadkar on value for money
  • Last 100,000 homes to make up bulk of €3bn bill

Leo Varadkar and Minister for Finance Paschal Donohoe at the launch of the Project Ireland 2040 funds in Government Buildings, Dublin (Brian Lawless/PA)
Leo Varadkar and Minister for Finance Paschal Donohoe at the launch of the Project Ireland 2040 funds in Government Buildings, Dublin (Brian Lawless/PA)

One of the country’s most senior civil servants has warned Cabinet ministers that the €3bn National Broadband Plan does not represent value for money for taxpayers, the Sunday Independent can reveal.

An astonishing row at the heart of Government has seen Department of Public Expenditure and Reform secretary general Robert Watt explicitly tell Taoiseach Leo Varadkar and Minister for Finance Paschal Donohoe that they should abandon plans to bring high-speed broadband to almost every home and business in the country.

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It is understood Mr Watt, who is in the running to become the next governor of the Central Bank, is vehemently opposed to the proposed broadband plan as he believes the €3bn price tag cannot be justified.

At several behind-closed-doors meetings in Government Buildings, Mr Watt has directly told the Taoiseach and the Minister for Finance that spending billions of euro rolling out fibre optic cables to almost every part of the country will not pay off in the long run.

“Robert’s job is to give the unpopular view and the advice that the politicians don’t want to hear,” a government source said. “Sometimes it makes him unpopular but it is his job to give this advice.”

However, Mr Varadkar and Mr Donohoe look set to ignore Mr Watt’s advice and become the first Government in the world to introduce high-speed broadband across the entire country.

Yesterday, Mr Donohoe said he and his officials have “engaged thoroughly on this plan for many months”. However, he refused to address the concerns raised by one of the most senior civil servant in his department after the cost of the plan ballooned from €500m to €3bn.

Mr Watt’s warning is sure to cause alarm among ministers and Opposition TDs who already have serious concerns about the project.

It is understood the National Broadband Plan will be discussed by the Cabinet next week, where ministers will be asked to sign off on a proposal for high-speed online connectivity for all areas of the country not served by commercial operators.

A consortium led by American businessman Frank McCourt will be given the green light to commence the first-of-its-kind broadband project once the Cabinet reaches agreement.

However, Cabinet ministers are expected to raise concerns with the Taoiseach, Minister for Finance and Minister for Communications Richard Bruton. Several ministers are apprehensive about pumping billions of euro into another State capital project in the aftermath of the National Children’s Hospital project controversy.

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There are also concerns over suggestions the taxpayer is being asked to fork out billions of euro for a massive infrastructure project that the State will not ultimately own.

The Cabinet discussion is likely to centre on the value for money in bringing fibre optic cables to homes in the most rural parts of the country.

Sources familiar with the plan say bringing broadband to around 443,000 homes is relatively cost effective. But the costs dramatically increase for the remaining 100,000 homes.

It is expected some of the more difficult homes to reach will be fitted with domestic broadband receivers which can connect to local transmitter outposts.

“You could have a transmitter on a gatepost on the side of the road and the fibre optic cable running into the transmitter and two miles across the field, you have a receiver in the house getting the broadband,” a source said.

Meanwhile, former Public Expenditure and Reform Minister Brendan Howlin has accused Fine Gael of “abandoning spending controls” and ignoring official advice.

The Labour Party leader said the Government’s plan to bring high-speed broadband to 543,000 homes and businesses will cost the taxpayer €5,500 per property.

“The Government needs to publish far more information to clarify the numbers involved, and to confirm its assumptions about the average cost to connect homes to the broadband network,” Mr Howlin said.

He said the Taoiseach was “weighing the short-term political benefit of winning seats at the local election over the long-term financial stability of our country” and urged voters “not to be fooled by Fine Gael”.

Mr Howlin also said it was “outrageous” to make taxpayers pay for a major capital project which the State would not ultimately own.

Fianna Fail’s communication spokesman Timmy Dooley described the Government’s handling of the project as a “monumental failure of the procurement process” as the State is paying for the plan but will not own the infrastructure once it is in place.

Under the terms of the current contract, Mr McCourt’s consortium will build, operate, maintain and manage the country’s biggest broadband network for 25 years.

The State will have the opportunity to buy the infrastructure once this period has lapsed.

Last month, the Taoiseach said: “At that point, Government has the option to buy, as it is not a commercial piece of infrastructure, one would expect that to be a relatively inexpensive proposition, and at any point if the contractor fails to deliver, the Government can step in and take over.”

Last year, former Minister for Communications Denis Naughten was forced to resign from his position over his contacts with Mr McCourt. At the time, he attacked the Taoiseach, saying the decision to sack him was “more about opinion polls than telecoms poles” and “more about optics than fibre optics”.

However, writing in the Irish Independent yesterday he insisted broadband is a now a “basic human requirement”.

He said introducing high-speed broadband should be treated with the same importance as the introduction of rural electrification almost 100 years ago.

Sunday Independent


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