Oireachtas Joint and Select Committees
Wednesday, 5 June 2019
Joint Oireachtas Committee on Communications, Climate Action and Environment
National Broadband Plan: Discussion
On page 17 of the report of 1 May, the assessment of non-financial appraisal results of the shortlisted options are put succinctly. The incentive to invest, where the ownership remains in the private ownership model, notably scores five on the assessment, and ownership being retained by the State also scores five in terms of protecting the public interest.
I am not sure it is in the public interest to offer a private equity company a profit of between €500 million and €3 billion, depending on the performance of the asset, in addition to the asset value at the end, while the State makes a contribution of €3 billion. My basic first-year accounting leaves me scratching my head and wondering how it could ever be a good deal that a company's risk contribution is €175 million versus a State contribution of €3 billion - it could be less, €2.5 billion or whatever else - and, in addition, the company gets a €500 million-plus profit from the return on the investment and gets to own the asset. We do not know what the asset will be worth, but if it is generating those types of income streams, it will be substantial. I just do not understand an accounting world where that can make sense. If I was back in a first-year commerce lecture in UCD, I would be the first with my hand up to put it to the lecturer that this is surely not in the public interest.