But a bitter pill to swallow as Roscommon is left without any Cabinet representation
This week, former Communications Minister Denis Naughten was vindicated by the publication of the Smyth report into the National Broadband Plan (NBP) bidding process. Fianna Fail has taken to the airwaves to call the findings of the report into questions, but responsible governance must now happen. It is time that the political point scoring stops and the National Broadband Plan happens. Denis Naughten will find it difficult to find himself at the cabinet table again any time soon, however, as many people in this region knew already, he lost his Ministry for simply trying to get an almost impossible job done in what were impossible circumstances.
The NBP has been on the agenda since 2011, and in the works since 2012. It was described at the time it was announced as being akin to the "rural electrification of the 21st century". The aim of the plan is to bring high-speed broadband to every home and business in the country where such a service is not currently available; a goal which has not been attempted by any other nation in the world.
The NBP is needed because commercial operators say it is not commercially viable to offer high-speed broadband in certain parts of the country. That’s a total of 542,000 premises or 1.1 million people which still have to be connected. The plan as it stands is to have a commercial operator roll out a physical network, with the state paying a subsidy to cover the extra cost beyond what is commercially viable. A large team in the Department of Communications, Climate Action, and Energy has been working on a complicated procurement process to get an operator to bring fibre optic cable to every one of those 542,000 homes and businesses.
The competition for the contract was whittled down to three bidders in 2016. These operators included SIRO (a joint venture between the ESB and Vodafone), Eir, and a consortium involving US technology and telecoms investment firm Granahan McCourt along with Enet and others. However, shortly after they were shortlisted, SIRO dropped out and were closely followed by Eir, leaving just the Granahan McCourt and Enet consortium. Despite the fact there was only one bidder left, the Government decided to go ahead with the procurement process. The Government had been hoping to be in a position to sign a contract by now, if the final tender from the Granahan McCourt consortium (which was submitted in September gone by), now called National Broadband Ireland, was acceptable.
Last month, it emerged that the then Minister for Communications, Denis Naughten, had met David McCourt, the founder and chairman of Granahan McCourt, a number of times over the past two years, as the final stages of the procurement process were still underway. That led to further questions from the opposition and political pressure which eventually led to Denis Naughten dramatically resigning on the floor of the Dáil after the Taoiseach asked him to reflect on his position. The Taoiseach made the request of Mr Naughten after Naughten informed him that he had four, previously undisclosed, private dinners with Mr McCourt, including one in Mr McCourt’s home in Co Clare. Mr Naughten has always maintained he did nothing wrong, however, at the same time, the Taoiseach asked the independent process auditor to the National Broadband Plan, Peter Smyth, to carry out a review of the contacts between Mr Naughten and Mr McCourt. This was to allow the Government to assess whether or not the integrity of the procurement process had been undermined by the meetings between Mr McCourt and Mr Naughten.
Earlier this week, Smyth’s report was released to the public. It found that neither former Minister Naughten nor David McCourt influenced the tender process for the plan. It says the fact that the former Minister met Mr McCourt or representatives of the other bidders outside the process is not in and of itself a basis for a finding that the procurement process has been tainted. Smyth said he is satisfied that neither the former Minister nor Mr McCourt had the opportunity to influence the conduct of the tender process in favour of Granahan McCourt or otherwise. He also stated that the decision of Mr Naughten to resign insulated the process from any apparent bias created by his engagements with Mr McCourt. However, Smyth does state that the absence of formal minutes or meeting notes for a number of encounters meant he was reliant on statements from Mr Naughten and Mr McCourt and others for verifying what was said at certain meetings. Resultantly, he said he could not unequivocally state that State-led intervention under the NBP was not discussed at the meetings between the former minister and Mr McCourt outside the procurement process.
New Minister for Communications, Richard Bruton, having considered the report, has said that the government has given the go-ahead for his department to continue the ongoing evaluation of the tender submitted by National Broadband Ireland. The bid consists of circa 20,000 pages of documents including technical and financial solutions. It still is not clear when that process will be concluded. It is understood that the tender evaluation process has been continuing alongside the Smyth review, and the government is anxious to make a decision soon. When the procurement team has finished its evaluation, it will present its findings to the Minister, who will then bring a recommendation to Cabinet to either accept or reject the tender. In all likelihood, whatever the tender ends up being, it will be accepted by Cabinet. The Government cannot afford to not deliver on this plan, and if they do deliver, no matter how late, it will be a huge political goal achieved.
It seems as though the government’s preference is to try to make the current process work. To scrap it and return to the drawing board at this stage would possibly see the project abandoned, and will do them no favours on the doorsteps. With a potential election always looming in the background, the Government knows it must have something definitive to sell when it sends it troops out on the trail. There have been plenty of calls for work to start on a ‘Plan B’, particularly by the opposition parties. Many in the opposition have expressed concerns that the current process is flawed and that the only remaining bidder may not be in a position to deliver what is required, although there is no reason to believe that they do not have the technical or financial capacity to deliver, particularly with the assistance of a state subsidy. It has been suggested that perhaps a semi-state organisation like ESB Networks or Ervia could be directed to take on the delivery of broadband to rural Ireland. However, within the industry, there’s a lot of scepticism around whether that would be realistic, and many have noted it may, in fact, be in breach of state-aid rules.
Another suggestion which has gained traction in recent weeks is that instead of trying to build a physical infrastructure; bringing fibre optic cable to every premises in the country, the government should be reconsidering the use of mobile or wireless technology instead, those advocating this approach note that since 2012 these technologies have improved significantly and may now be an even better option in some circumstances. Advocates state that the mobile or wireless approach might be cheaper and quicker to deploy, particularly if the country were to be divided up into smaller pockets, with different technological solutions for different areas. Naturally, there are differing views on whether mobile technology would be adequate in the future.
All these developments have come to the fore alongside leaked reports that the cost of the National Broadband Plan as currently envisaged may have exploded to as much as €3-billion, from the €500-million which was originally envisaged. Again, there are varying views within the telecoms industry about the possible quantum of the bill, but most seem to think that €3-billion figure is very much on the high side of the scale. This week, the Minister for Finance said that National Development Plan funding could also be used to deliver broadband to rural Ireland. The question on everyone’s lips now is, how much will the final bill be? That is a question which will be answered in the coming weeks when we find out whether the National Broadband Ireland consortium’s tender has been accepted.
Deputy Denis Naughten released the following statement on Tuesday of this week: “I welcome the findings of the independent audit report by Mr Peter Smyth which concludes that I ‘did not influence or seek to influence’ the conduct of the tender process in favour of Granahan McCourt and further concludes that the process has not been ‘tainted’. I welcome the conclusion of Mr Smyth’s report not only for myself but for the 1.2 million people in rural Ireland waiting to be connected to high-speed broadband.”
Naughten explained that he did not breach any protocols by engaging with McCourt, stating: “It should be noted that Mr Smyth also concludes that the ‘communications protocol for the procurement process for the State-led intervention under the NBP does not expressly prohibit engagements between the bidders (or individual members of a bidding consortium) and the Department’. As Minister, my job required me to meet investors from all sectors under the remit of my former Department whether they were investors from telecoms, renewable energy, environment or natural resources. These investors are the men and women who provide jobs in our country.”
In his statement, Naughten detailed that it is important to note that a Competitive Dialogue Procurement Process requires dialogue and Mr Smyth’s report details the significant level of engagement that the Department has been expertly managing since the process began. He stated: “My sole objective throughout this process, during my time as Minister, was to deliver much-promised broadband to rural Ireland... I hope that once this procurement process has been completed that the remaining homes, farms and businesses will get access to this technology.
Naugthen concluded his statement with a firm warning to the government and his fellow opposition TDs: “This should now be the only goal of our government and members of Dáil Éireann at this point and I urge colleagues not to succumb to those who want to make a political issue of the NBP for their own ends and not that of the country as a whole.”
While many will say that Naughten was naïve to be caught out like this, the reality is that he was a Minister trying to flog a dead-horse at a marker with only one bidder in the audience. All the great commentators in the national theatre, some of whom have sat at the Cabinet table and overseen much greater ‘clust-astrophes’ than this, can say what they like. I don’t think there is a single one of them who would have done anything differently, and many of them wouldn’t have had the bottle to stand down and insulate the process, as Naughten has done.
My suspicion is that the leaked cost of €3-billion is nowhere near the amount which will be announced. If the government is smart, they’ll have leaked this unholy number to brace people for a slightly less bad situation, they’ll probably announce a number in the region of €1.5-billion, and pat themselves on the back that it was half what it could have been, despite being three-times more than what they said it would be. Also, we cannot forget the age-old trick. Announce the headline figure, and after 12-months, when you’re too far up the bog road to put it into reverse, announce that more money is needed. I hope I’m wrong, but I don’t think I will be.
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