Mr. Mark Griffin:

The recently published Comptroller and Auditor General and NIAO reports clearly set out the issues that have arisen in implementing the Cross-Border Extreme Broadband Project between Dublin and Belfast, with nodes in Dundalk, Drogheda and Armagh. The project was to be funded under the INTERREG III-A telecoms measure, but due to irregularities, which are set out in the reports of the Comptroller and Auditor General and the NIAO, INTERREG funding for the project was ultimately withdrawn. At this stage, funding of over €2 million has been lost to the Exchequer. Recoupment of all funding for the project, including funding contributed by the Northern Ireland authorities, is the subject of court proceedings.

It is clear from the reports of the Comptroller and Auditor General and the NIAO that there were deficiencies in the oversight of the Bytel project. While DETI in Northern Ireland was in the lead role for implementing the project, processes in the Department of Communications, Energy and Natural Resources should have been better at critical junctures as the project evolved. This includes Bytel's signing of the agreement with Eircom UK to replace Aurora, extending the broadband project to the north west.

This changed the structure and costs of the project and a revised letter of offer should have issued to Bytel. This could have ensured that some of the expenditure on the north-west extension of the project was eligible for INTERREG funding. Instead, following the ASM review, all of the expenditure on the north-west extension was deemed ineligible.

Since critical deficiencies in the project were brought to the attention of the Department in 2011, we have been fully engaged in dealing with them. This includes participation on the project board established by the SEUPB to review the project, co-operating with ASM in the conduct of the forensic audit of the project, initiating with DETI a technical review of the project by PRISA consultants and fully engaging with the Office of the Comptroller and Auditor General in its preparation of the report on the Bytel project.

It is worth noting that the technical review undertaken by PRISA in 2013 concluded that the network delivered through Bytel-Eircom met all the objectives laid out in the grant application and the letter of offer and that the project was very beneficial for the entire region. The reach of the delivered network went beyond the original objectives as the north west was included in the network with additional nodes at Omagh and Derry. The fibre also extends to Bridgend and Letterkenny providing network resilience through the networks in the Republic.

It is regrettable that a project of this regional significance had to be withdrawn from the INTERREG programme and that better value for money was not delivered. There are issues for all of the parties involved, including the Department of Communications, Energy and Natural Resources, regarding oversight of the project. I assure the committee, however, that the Department now has in place more stringent oversight and monitoring processes for INTERREG projects and indeed projects across all expenditure programmes. I look forward to assisting the committee with its consideration of the issues related to the Comptroller and Auditor General's report on the Bytel project.