Mr. Fergal Mulligan:

To go back to the 800 or 900 contact hours since 2016, the first thing we did in 2016 was to issue a draft contract. At that time, the draft contract was based on the best available contracts we could get from the UK, where it has run broadband contracts, and the initial broadband scheme contract. After nearly two and a half years of negotiating with almost every senior legal house in Dublin and across the water, the contract currently runs to 1,500 pages. Within it is the governance of this for 25 years. That includes the requirement that the operator must pass and connect every home in the intervention area. It is very much a contract that requires connections. The subsidy includes connecting every home in the intervention area where a consumer seeks a connection, be it in year 1 or year 25. That is the contract. It is based on when people want it, to go back to the gas analogy. When people will want to connect to the network is a critical issue. When will Mary Murphy or Jimmy Doherty want a connection? It might be in 2020 or 2025. We predict that in our modelling and the bidder is predicting it in its modelling. That demand may occur sooner or later than expected, but we know generally that people will connect to this network because it will probably be the only network available in the next 25 years. People may have a choice. If demand exceeds our expectations, the clawback would kick in. In the event that the scheme is hugely successful, there may be far more profit in the contract than we ever envisaged. In that context, the contract has within it specific percentages regarding exactly how much would be clawed back and recouped by the State. That has been agreed with the existing bidder as we are concluding the tender process, There are three clawback mechanisms. There is one for any cost savings, whereby we recoup any money the operator expected to spend but did not spend.

Second, there is a mechanism if they make more profits than they ever thought they would. Third, there is a mechanism for us to find out at the end of the contract whether the business has a value. There are significant clawbacks to the State within the contract. They apply to all bidders. Again, all of this was subject to huge negotiation over the past two or three years. The point has been made that if we look for too much clawback, they will look for too much money. All of that has been concluded. It is significant. By the time the contract is signed, there is no change to that. They are locked into that and they must do it whenever those accounts are ready.