Oireachtas Joint and Select Committees
Wednesday, 5 June 2019
Joint Oireachtas Committee on Communications, Climate Action and Environment
National Broadband Plan: Discussion
Ms Michele Connolly:
When one looks at the calculation of the terminal value clawback, the contract sets out a mechanism - this has already been disclosed in some of the correspondence - for calculating that terminal value. That would be a function of the profitability in this instance - the earnings before tax, interest, depreciation and amortisation, EBITDA, of the project multiplied by a factor of ten. That is the calculation and the Government would then be entitled to get 40% of that terminal value of whatever that is the valuation. What those numbers are will be dependent on what the actual performance of the business is at that point, both in terms of the level of demand, as the Deputy mentioned, and the function of the not insignificant cost involved to operate this network, including the cost of using the existing infrastructure owned by Eir. The mechanism in the contract, which is set out in some detail, indicates what number that will deliver and this will be a function of what the actual performance of the business will be at that point.