Oireachtas Joint and Select Committees

Thursday, 6 December 2018

Public Accounts Committee

2017 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 29 - Department of Communications, Climate Action and Environment
Chapter 8 - Measures relating to Cyber Security
Chapter 9 - Energy Efficiency National Fund

Mr. Mark Griffin (Secretary General, Department of Communications, Climate Action and Environment) called and examined.

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will examine the 2017 annual report of the Comptroller Auditor General and appropriation accounts: Vote 29 - Department of Communications, Climate Action and Environment; Chapter 8, which deals with matters relating to cybersecurity, and Chapter 9, which deals with the energy efficiency national fund. We will also cover matters related to the national broadband plan to date. In order to provide structure for today's meeting, we will take all matters relating to cybersecurity in the afternoon when we will be joined by representatives from An Garda Síochána and the Department of Defence, both of which have a role in this matter but may not be involved in the general discussion on the Vote.

We are joined from the Department of Communications, Climate Action and Environment by Mr. Mark Griffin, Secretary General, Mr. Ciarán Ó hÓbáin, Mr. Michael Manley, Ms Finola Rossi, Mr. Richard Browne, Ms Barbara Leeson, Ms Aoife Byrne and Ms Catherine McGinty. We are also joined from the Department of Public Expenditure and Reform by Ms Mary Austin.

I remind members, witnesses and those in the public gallery to switch off all mobile phones or place them in airplane mode as leaving them in silent mode can interfere with the recording system.

I advise the witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the provisions within Standing Order 186 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies

While we expect witnesses to answer questions put by the committee clearly and with candour, they can and should expect to be treated fairly and with respect and consideration at all times, in accordance with the witness protocol.

We will take the Comptroller and Auditor General's opening statement first.

Mr. Seamus McCarthy:

In light of the Chairman's suggestion that we leave over the cybersecurity matters, does he want me not to refer to that?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will hold that over until the second session.

Mr. Seamus McCarthy:

I will introduce it in the afternoon.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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On the basis that we felt we might not complete our discussion on cybersecurity before lunch, we arranged for a second session to commence at 2 p.m. to conclude our deliberations. It is not necessary to have witnesses from the Garda Síochána and the Department of Defence present this morning when we are dealing with issues that are not relevant to them. I do not know how long we will take today but witnesses from both organisations are scheduled to be here for 2 p.m. to deal with the national cybersecurity plan only.

Mr. Seamus McCarthy:

I will introduce the Vote and the other chapter.

The appropriation account for Vote 29 - Communications, Climate Action and Environment had total gross expenditure of just over €500 million in 2017. This was distributed across six expenditure programmes of varying size. Figure 1, which will appear on screen, indicates how the expenditure under the Vote was divided between the programmes. Members may wish to note that, in addition, the Department is responsible for management of the environment fund, which is funded from levies on the landfill of waste and on plastic bag usage and accounted for separately from the Vote.

The largest expenditure programme was in relation to broadcasting, accounting for €254 million or more than half of the total spent in 2017. That programme was substantially funded by television licence fee receipts, which totalled just over €215 million in 2017. Most of the expenditure under the programme was in the form of grants of almost €185 million to RTÉ and €34 million to Teilifís na Gaeilge. A total of €14 million was paid into the broadcasting fund and just under €12 million was paid to An Post in respect of its costs for collecting television licence fees on behalf of the Department.

The Department spent €111 million on the energy programme in 2017, of which €90 million was expended on energy efficiency programmes promoted by the Sustainable Energy Authority of Ireland. This was a substantial increase from €66 million spent in 2016.

The Department spent over €50 million on the environment and waste management programme in 2017, more than half of which went to support the operations of the Environmental Protection Agency. In addition, the Department spent over €33 million on environmental projects and initiatives from the environment fund in 2017.

Expenditure on the communications programme in 2017 was €31.5 million. This included expenditure on the procurement process for the national broadband plan.

The Department spent just over €30 million under the inland fisheries programme, mainly in grant support for Inland Fisheries Ireland.

Finally, almost €25 million was spent on a range of services covered by the natural resources programme. Nearly 60% of that expenditure related to the specialist functions and services of the Geological Survey of Ireland. The net expenditure on the Vote was around €32 million less than was provided for in the 2017 Estimate. The Department got the agreement of the Department of Public Expenditure and Reform to carry over €6 million in unspent capital funding to 2018. The balance of €26 million was due for surrender.

This brief outline of its 2017 expenditure illustrates that the Department funds oversees a broad range of functions, public sector bodies or both, including major commercial State bodies which do not receive ongoing grant funding such as An Post, EirGrid, the ESB and Bord na Móna. Given the scope of the Department’s remit, I have included for the committee’s information a diagram which aims to summarise the public bodies within the Department’s aegis, indicating those which I audit and those which are outside my remit.

A key feature of the Department’s remit is the long-term nature of many of the issues for which it takes lead responsibility. The chapters for consideration today deal with aspects of two such issues, namely, cybersecurity and sustainable energy.

The energy efficiency national fund was established in 2014, using funds of €35 million from the carbon revenue levy, which had been discontinued. The fund is not accounted for separately but the Department presents a summary of the results for the fund in note 7.2 of the appropriation accounts. The objectives of the fund are to provide financing to support energy efficiency improvement programmes and measures, as well as to promote the development of a market for energy efficiency improvement measures.

Rather than investing directly in energy efficiency projects, the Department decided to establish a qualifying investor fund, QIF, managed by fund advisers. The QIF pooled this funding with private sector funds. The Department committed to investing up to the full fund amount of €35 million in the QIF. As of March 2018, private investors had committed up to €38.8 million. At the time of the finalisation of the chapter, the anticipated investment in energy efficiency projects had not been achieved.

It was originally envisaged the QIF would invest in projects from its establishment in May 2014 up to May 2017. The shareholder agreement made provision for this investment period to be extended to May 2018, of which this was availed. When the agreed investment period closed, the Department had transferred a total of €14 million to the QIF, including €10.8 million contributed only in May 2018, in anticipation of delivery of projects in planning.

The funds transferred are used to finance energy efficiency projects and to fund the fees and expenses of the QIF. Based on the State’s percentage shareholding in the QIF, the examination estimated that around €2 million of the State’s contribution was used to pay fees and expenses. The value of the State’s investment into the future is not known.

The Department has stated there would be no further transfers from the fund to the QIF and that the balance of €21 million remaining in the fund will be transferred to the climate action fund.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thank Mr. McCarthy. I ask Mr. Mark Griffin to make his opening statement.

Mr. Mark Griffin:

I am attending the committee to discuss the Department’s 2017 audited accounts, the Comptroller and Auditor General’s chapters on cybersecurity and the national energy efficiency fund, as well as to take questions from the committee across the breadth of the Department’s portfolio.

The Department made significant progress in 2017 and progressed several critical policy measures, including those which aim to deliver two key national strategic outcomes in the national development plan, namely, strengthened rural economies and communities and the transition to a low-carbon and climate-resilient society.

In terms of the appropriation accounts, total gross expenditure under the Vote in 2017 amounted to €503 million, some 7%, or €37 million, below the budgetary allocation of €540 million, including capital carryover. The underspend related primarily to lower than expected expenditure on certain demand-led sustainable energy schemes, the delayed commencement of landfill remediation projects, the national broadband plan, as well as reduced broadcasting expenditure due to lower than forecasted TV licence receipts. In addition, expenditure of €33 million under the environment fund in 2017 supported further progress in the areas of environmental protection, sustainable development and waste management.

The Department has a key policy development and co-ordination role in Ireland’s transition to a low-carbon and climate-resilient economy. Ireland's first statutory national mitigation plan, published in July 2017, sets out a whole-of-Government approach to tackling greenhouse gas emissions in key sectors, including electricity generation, transport, agriculture and the built environment. Ireland’s first national adaptation framework, approved by the Government in December 2017, sets out our strategy for adaptation measures to reduce the vulnerability of the State to the negative effects of climate change, and also to avail of any positive effects which may occur.

Using less energy, and using it more efficiently, is the most cost effective and accessible way to take action on climate change. The Department invested a total of €105 million under its energy programme area in 2017. Of this, capital expenditure of €80 million supported energy efficiency measures in more than 23,500 homes and 491 public, private and commercial buildings, while also supporting around 2,670 jobs across the country. In tandem with this, measures aimed at decarbonising electricity generation and promoting the electrification of heat and transport were progressed. Last year saw the approval of two key support schemes for renewable heat and renewable electricity, respectively, with the latter providing pathways and measures to ensure increased community and citizen participation. Over 900 new electric vehicles were grant-aided in 2017, as we move forward to ensure all new cars and vans sold will be zero emissions, or zero emissions capable by 2030.

The Comptroller and Auditor General has prepared a chapter with the 2017 appropriation accounts dealing with the national energy efficiency fund. The fund served to stimulate the market for large scale energy efficiency projects and leverage private investment in this area, at a time when such investment was not evident. The role of the fund should be seen in the broader context of Exchequer investment in energy efficiency over the past few years. The greater proportion of the €21 million remaining in this fund will now be diverted to stimulate innovative investments by public and private sector entities under the new climate action fund to further support the decarbonisation effort. Last week we had the first announcement of seven schemes to be supported by the fund.

Some €26 million of the Department’s allocation was spent on communications, multimedia developments and the information society in 2017. Within this, expenditure to support digital entrepreneurship and to promote digital inclusion among small businesses and citizens under the national digital strategy amounted to €9.4 million.

During 2017, the Department continued to progress the procurement process under the national broadband plan, while commercial investment in high-speed broadband services continued to expand. Overall, 1.6 million of the 2.3 million premises in the country had access to quality services at year end. The overarching policy objective of the plan is to deliver this vital service to the homes, schools, farms and businesses for the 1.1 million people across rural Ireland who will not be provided this service by the commercial sector. It remains a key priority for the Department. We have now entered into the final assessment stage of the procurement, with a view to making a recommendation to the Government within the coming weeks.

In other sectorial areas covered by the Department, funding to support public service broadcasting amounted to €253 million in 2017. Investment of over €91 million was targeted at the sustainable management of our natural resources and inland fisheries, the protection of our natural environment and the transition to a resource-efficient circular economy.

I look forward to assisting the committee members with any questions they may have today.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thank Mr. Mark Griffin for his opening statement.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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As I have many questions this morning, I would like fairly short replies. The area on which I want to focus is broadband.

There can be some confusion because there are a number of different contracts. The metropolitan area networks, MANs, which were established in 2004, were purchased by Granahan McCourt Capital in 2013. There were two concessionary contracts. One was to run to 2019 and the other was to run to 2024. In 2017 it was decided to extend those contracts to 2030. Obviously, they were not going to run out imminently so it was not necessary to do that in 2017, but it was done in March 2017. In July 2017 the Irish Infrastructure Fund bought 78% of Enet. That is one of the areas I wish to explore. First, who was the decision maker who decided to extend the contracts?

Mr. Mark Griffin:

I will try to be brief in answering the question but there is an important piece of context that would be of benefit-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Do not overdo the context.

Mr. Mark Griffin:

I will not overdo it but it would be of benefit to the committee and people who are watching the proceedings. As the Deputy correctly said, the first two management services entity, MSE, contracts were awarded to Enet. The first was for 28 MANs and the second was for 60 MANs in 66 different towns, so there was phase 1 and phase 2-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin, will you explain MANs for the people who are watching the proceedings?

Mr. Mark Griffin:

They are metropolitan area networks. They are fibre rings in towns around the State that provide services from co-location centres. They were State funded and State owned. They remain in State ownership, which is important.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There are 88 urban areas.

Mr. Mark Griffin:

Overall there are 88 spread across 94 towns. Of the 88, 85 of them have been lit or are in use.

To reply to the Deputy, it is the nature of decision making that we must plan well in advance for decisions that need to be taken. The Department initiated a review in 2014 to inform future policy direction. We undertook a detailed internal-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I asked Mr. Griffin who the decision maker was. He is giving me the context but I have a total of 20 minutes for questions and answers.

Mr. Mark Griffin:

On the decision maker, a very detailed evaluation was undertaken internally in the Department at division level, informed on foot of that by a further detailed evaluation that was carried out by Norcontel. We also got some support from NewERA which is the shareholder executive for the State. A recommendation came up through the system regarding the benefits of one approach versus another, that is, extend versus re-tender. All the analysis showed that the extend option was the preferred one in financial terms, market terms and so forth. It would have come-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Is documentation for that available?

Mr. Mark Griffin:

There is. We have published the Norcotel report and we sent some of the briefing to the committee in the last day or two. There is an internal administrative document which sets out the extent of the analysis that was undertaken. It has not been released yet but, subject to having a more detailed look at it, I think it is something we could release.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Okay. Essentially, this analysis makes a recommendation to the Minister and the Minister makes the decision. Am I correct about that?

Mr. Mark Griffin:

It comes up through the system.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Yes, but am I right about that?

Mr. Mark Griffin:

In fairness, the Minister concurred with the recommendation of the Department.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We are extending these two concessionary contracts that were not due to expire until 2019 and 2023-----

Mr. Mark Griffin:

it is 2020 and 2024.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We were doing that at the same time as there was due diligence under way by the Irish Infrastructure Fund with regard to the purchase of what ended up as 78% of the contract. It was decided to extend it in March. Did the Department know that due diligence was being carried out by the Irish Infrastructure Fund regarding the purchase at that stage?

Mr. Mark Griffin:

No. They were two separate processes.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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With regard to extending the concessionary contracts, if the contracts had stayed at 2019 and 2024 is it fair to say they would have been less valuable than contracts that were then extended to 2030?

Mr. Mark Griffin:

I cannot comment one way or the other. Whatever value the IIF and AMP Capital put on it they did it on a market basis.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Most people would assume that a longer contract would be worth more.

Mr. Mark Griffin:

The only consideration for the Department, and I must be clear about this, is what is most advantageous for the Department and for the users of the service. That was the only consideration for us in financial terms, market terms, service delivery and so forth. What happened in the acquisition of Enet happened utterly independently of the Department.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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They were extended in March. In July the Irish Infrastructure Fund bought 78% of Enet.

Mr. Mark Griffin:

That would appear to be the case.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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This year the remaining 22% was purchased.

Mr. Mark Griffin:

That would appear to be the case.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Okay.

Mr. Mark Griffin:

To be clear, the Department-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Mr. Griffin does not know if they paid more than they might have paid-----

Mr. Mark Griffin:

I have no idea.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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-----if the contract was not extended.

Mr. Mark Griffin:

In fact, the important thing to bear in mind is that, as I understand it, IIF bought the Enet business in its entirety. Enet does a number of things but the only part we were interested in was its role in the management of the metropolitan area networks.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the name of the IIF company?

Mr. Mark Griffin:

The Irish Infrastructure Fund.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can you explain who it is?

Mr. Mark Griffin:

To the best of my knowledge the Irish Infrastructure Fund is made up a number of investors and one of them is the Ireland Strategic Investment Fund.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How much does it own?

Mr. Mark Griffin:

I do not know.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are you telling me that the Department has given the contract to a business and it does not know the people who own the business?

Mr. Mark Griffin:

We did not give the contract extension to anybody other than Enet.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That was owned by Granahan McCourt Capital.

Mr. Mark Griffin:

The Deputy is making the point that subsequent to the extension Enet was sold to a different entity.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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You mentioned ISIF too.

Mr. Mark Griffin:

I understand that ISIF is one of the investors in the Irish Infrastructure Fund.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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People who are watching the proceedings might have mistook ISIF, which is a State body, for IIF. They are very similar-----

Mr. Mark Griffin:

Yes, they sound very similar.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will you give the full title rather than the initials each time you have to mention one of them? I am already confused as to who is ISIF and who is IIF.

Mr. Mark Griffin:

The IIF is the Irish Infrastructure Fund-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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A private company.

Mr. Mark Griffin:

It has a range of investors and one of them is the Ireland Strategic Investment Fund.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Do you know how much of that fund it owns?

Mr. Mark Griffin:

No, I do not know. That is part of the new acquisition. In many respects it is of no interest to me.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is of interest to us. That is part of the NTMA group so we will have to ask that group how much of the Irish Infrastructure Fund is owned by ISIF. That is an obvious question for the committee.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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To fast forward, there is another tendering process at present under the national broadband plan. It was supposed to be a competitive tender but, unfortunately, two of the entities that were tendering have pulled out. We are told that competition will be important in driving down price. Would that not have also been the case with regard to this particular extension? For example, BT Ireland has said publicly that it had expressed an interest in tendering. If one does not tender one does not know what the competitive pressure will be in evaluating costs. Why did that not happen?

Mr. Mark Griffin:

There was a provision in the concession agreement for both the MANs I and MANs II lots that they could be extended.

The original agreements contained an extension provision.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I know that there could be an extension, but there was no guarantee. There was a point when the Department could have re-tendered to see if better value was available or a better outcome was possible because there are also issues with the take-up of broadband.

Mr. Mark Griffin:

These are judgment calls which we do not make in the absence of information. I do not want to give the impression that somebody in the Department suddenly took the decision that the contracts needed to be extended because that was not the decision; rather, it was to engage in a policy review of operations and demands, how the incumbent was doing and functioning and assess whether it would be more beneficial to extend or re-tender. A detailed assessment was made and it was supported by an additional analysis undertaken by Norcontel.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Would the outcome have been known if the Department had not tendered?

Mr. Mark Griffin:

Yes, but there would have to be a procurement process, which costs money. We made an assessment in which we examined the state of the market, anticipated what would happen in the future period and what the market would look like and what the likely benefits to the State would be in extending versus re-tendering. The clear assessment was that in all circumstances it would be more beneficial to the State to extend the contracts.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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What, if anything, did the Department get in return?

Mr. Mark Griffin:

In the new arrangement we have secured as a minimum approximately €21 million or €22 million in cost savings between 2020 and 2030. That is at the lower end because the Norcontel analysis indicated that there were likely to be additional cost savings to the State in an extend versus re-tender option in all scenarios, from a low model to a high assumption.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Was the Department aware of much criticism in the marketplace of the cost to the end consumer and non-viability in providing services?

Mr. Mark Griffin:

We engaged in stakeholder consultation and are appearing before the committee. We interviewed 15 people whom we described at the time as "tier 1 users", that is, high users of the system who were well known within the telecoms industry. The vast majority expressed satisfaction with the performance of the MSE in running both MANs. We committed to undertaking an analysis of the pricing of the MANs products and that review has just been completed. We are engaging with the MSE and, having spoken to colleagues, I expect us to be in a position to publish the review before Christmas. I expect it to be published virtually in full, although there may be one or two matters we may have to redact. It will not, however, affect the overall findings and conclusions or the thrust of the report. As part of the development of the review, all of the issues with cost raised by a number of parties were fed into the process.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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On regulatory oversight, the name "MSE liaison committee" appeared in the Peter Smith report. Is it the de factoregulatory oversight group or what role does it play? Does Enet have any role to play with that body?

Mr. Mark Griffin:

A liaison committee is in place and meets on a quarterly basis. As I understand it, it involves the Department, Enet-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Enet is involved.

Mr. Mark Griffin:

Yes, but how could there be a liaison committee without the MSE?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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In that case, it is not regulatory oversight.

Mr. Mark Griffin:

No, it is not.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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It could not be if Enet was regulating itself.

Mr. Mark Griffin:

The purpose of the committee meetings is to determine whether Enet is compliant with the requirements of the project key performance indicators and so on. The committee also involves a chief executive officer from the local authorities.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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People may have mistakenly believed there was some regulatory oversight by an organisation such as ComReg, but that is not the case on price.

Mr. Mark Griffin:

No, there is oversight by the Department.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Why have we not seen a full copy of the Analysys Mason report?

Mr. Mark Griffin:

It is a timing issue. Some aspects are still being worked through, but I will be happy to provide it for the committee in the next couple of weeks. As I said, I am keen to ensure it is as open as possible. I have been advised by colleagues that there may be one or two small redactions, but it will not affect the understanding, findings or conclusions.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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On the review of the MANs programme, was one carried out in 2016 and another in 2017?

Mr. Mark Griffin:

There was an internal review by the Department over a prolonged period of time, but it was supplemented by a report. Therefore, there were not two reviews per se.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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There was some confusion in that regard. The briefing document the Department provided for the committee stated the report had been completed by the Department in 2016 and that the review established that the MANs programme had proved to be effective. In a reply to a parliamentary question in January 2017 the Department wrote that it had "recently finalised decisions relating to the management of the MANs to provide that the current Concession Agreements co-terminate in 2030". It went on to state: "An independent evaluation of the operations of the MANs, including pricing of all MANs products and services to ensure that they are within market norms, is currently under way". The report stated it had been done, but the parliamentary reply indicated otherwise a year later. I am, therefore, confused.

Mr. Mark Griffin:

I will try to explain it as briefly as I can. There was an internal review by the Department which was supported by the external analysis of Norcontel. It formed basis of the decision at the end of 2016 and the principle to proceed on the basis of an option to extend. Between the end of 2016 and March 2017 we entered detailed negotiations with the MSE on issues related to revenue share, claw-back and the management service fee in order that we would achieve an even better outcome for the State. The final part was completed in March 2017. We undertook to make the pricing analysis which Analysys Mason was procured to undertake.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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In this document, however, the Department gives the impression that it was done in 2016.

Mr. Mark Griffin:

The internal review was carried out, but it was supplemented by a further analysis, with a view to obtaining a negotiated outcome that would be more beneficial to the State.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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On the release of information, I am aware that there is an ongoing appeal in a case that was lost in the High Court. The Information Commissioner and the court concluded that there was a public interest in providing information. Why is the case being contested if there is a public interest in the information being provided in a public forum?

Mr. Mark Griffin:

I do not want to get into the details of the court case, but at the outset of the process we formed the view that releasing the totality of the contract could have a commercial impact not only on us but on other organisations in the State, or other organisations which deal with the State, which rightly want to have some of the information contained in contracts protected for commercial reasons. We used mechanisms within the Freedom of Information Act to give effect to it. They were mechanisms put in place by decision makers beyond my level.

The advice subsequent to the case being lost in the High Court was that we should appeal. We concurred with that advice. I do not want to say any more than that because the issue is before the courts.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That is fine. I want to move on to another item. An analysis was done by Mr. Colm McCarthy as consultancy work in November 2015 and was provided to the Department. One area on which it focused was the need, under the public spending code, for a cost-benefit analysis to be undertaken in order that all projects taken on by the State go through a rigorous process to determine which ultimately will be selected. Was the national broadband plan, or the metropolitan area networks, MANs, contract subject to cost-benefit analysis?

Mr. Mark Griffin:

I can certainly say the national broadband plan was, without question. It has been updated on a number of occasions. In a reply to a parliamentary question, which Deputy Catherine Murphy may not have had an opportunity to read, the Minister stated that a cost-benefit analysis was done in 2002 by Peter Bacon and Associates on the proposed MANs. To the best of my recollection, I believe that report has been released. If it has not, we will do that.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That was right back-----

Mr. Mark Griffin:

-----at the outset.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Was any further cost-benefit analysis done during the next generation of this project?

Mr. Mark Griffin:

We did not do a cost-benefit analysis, per se, but we did do a value for money review in 2007. The Comptroller and Auditor General audited the effectiveness of the MANs in 2008, if memory serves me right. Part of the analysis we did in 2016 was a retrospective to see how effective the management service entity, MSE, had been in discharging its functions under the contract.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Was one done prior to this current procurement process?

Mr. Mark Griffin:

Is the Deputy referring to the MANs extension?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Yes, that is correct.

Mr. Mark Griffin:

A formal cost-benefit analysis was not done but a very detailed review was undertaken by the Department.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Is that review available?

Mr. Mark Griffin:

This is a 2016 document. I do not think we have made that available publically but I am not sure there is a good reason for us to not do that. Can I go back to the Department, check to see about providing that document and then respond to the Deputy?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That is fine. I thank Mr. Griffin. There is a crossover in this project with the same entities such as Granahan McCourt Capital, which owned Enet up to 2017. That is the same entity leading the national broadband plan consortium. It is useful to see how the previous project rolled out in respect of the risks with non-take-up, construction etc.

Mr. Mark Griffin:

I do not wish to interrupt, but I will mention one other indicator I did not share earlier. On the operation of the MANs, we have seen an additional investment of €31 million by Enet, as the management service entity, in upgrading the MANs infrastructure. That value resides with the State because it owns the MANs. The MANs network has also been extended by about 30% and, again, the value of that also resides with the State. We are seeing a significant-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Did the State pay for that?

Mr. Mark Griffin:

We did not pay for that extension.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am sorry to cut across but why were the companies paying €31 million to then hand it over to the State?

Mr. Mark Griffin:

They see value in providing services from that network but the actual asset itself is retained in the ownership of the State.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is the case even though those are new assets?

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Control of those assets by those companies expires-----

Mr. Mark Griffin:

Whenever those entities move out of-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Essentially, is it the case that these companies have until 2030 to make their money back?

Mr. Mark Griffin:

Exactly. On the extensions, there is an obligation in the contract for the companies to invest 10% of the gross revenue every year. We have benefitted, therefore-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is not out of the goodness of their hearts that the companies did this?

Mr. Mark Griffin:

No. It reflects, however, the due diligence we put in when the contract was originally started.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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If we look at some of Enet's accounts, we can see that dividends have been paid. I looked at the 2016 accounts and €6 million in dividends was paid to Granahan McCourt Capital. What is put in is one thing but what is taken out is another. I refer to what the companies make back. It is my understanding that we own the network.

Mr. Mark Griffin:

Absolutely.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The contractors then manage the network and providers such as Eir and Sky, using the network, sell services to the consumer. If providers such as Eir or Sky do not see it as something on which they can make money, the services which the network can provide do not get sold to the consumer. Then we have lots of fibre and insufficient take-up from that fibre. That is a fair reflection of what happens if the retail side of things is not competitive. We might roll out fibre right across the country but only 10% to 15% of people might take it up because it is not something they can afford. Is that correct?

Mr. Mark Griffin:

I am trying to get my hands on the figures. What we have seen is a significant take-up on the MANs network by the retail operators in recent years and the selling on of those services. I will try to find the actual figures because I saw the information in the brief in recent days. Many of the businesses in the towns served by the MANs network are using fibre. I will give the example, often quoted, of Coca-Cola in Wexford. It uses the MANs network. I will get a list. If I cannot get my hands on it during the course of the meeting, I will forward it on to the committee later. There is, however, a very extensive take-up.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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This is not like the ESB network being rolled out, when every house in the country was to be connected to it This is not an equivalent situation but one where it is down to retailers offering something people will buy.

Mr. Mark Griffin:

It also reflects the fact that the MANs service is only available in 96 towns, many of which are smaller settlements. I will come back to that but I have the figures now to which I referred earlier. There are 63 service providers using the MANs infrastructure and 1 million individuals and businesses are benefitting from it, including industrial estates, multinationals, small and medium enterprises, State entities, local authorities and educational institutions. There is significant take-up of the services.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I am aware of a library, not in my own constituency, that has not taken it up because it is too expensive. If we are going to invest money to make us connected and fit for purpose and to ensure rural Ireland can perform to the best it can, the services provided must be attractive for people to take it up. Otherwise, there is a question mark over that investment.

Mr. Mark Griffin:

Absolutely. That is correct. We will be looking at what has arisen from the Analysys Mason report on pricing to see what needs to be done. On the specific issue of that library, I would be happy if the Deputy could provide me with the details and I will follow up.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I will. Given that it is the same entity, and the only remaining entity, involved in the current national broadband plan, the information from that report is incredibly important because this is a very expensive project. We do not know exactly how much it is going to cost, but amounts between €500 million and €3 billion have been mentioned. We know it is going to be tremendously expensive. At the very least, we should have information on the affordability, the take-up, the risks etc. Looking back at the forerunner of this project is probably the best thing to do to make sure this can be a successful project.

Mr. Mark Griffin:

It is one of the things that may feature. The assurance I can give the Deputy on the evaluation of the national broadband plan is that there is massive due diligence ongoing. I refer to the capacity of the organisation, the subcontractors, the commercial plan, the business plan, the deployment, the deliverability, the affordability and value for money.

All of that is part of our consideration at the moment.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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How long does it take to do a pre-qualification test?

Mr. Mark Griffin:

In what sense?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The tendering process for the national broadband plan is under way. It started out being Enet which is now a partner and Granahan McCourt is the main entity. Subcontractors are also included as part of the consortium. Every time that changes, does it have to go through pre-qualification test?

Mr. Mark Griffin:

Absolutely.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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How long does it take to do a pre-qualification test?

Mr. Mark Griffin:

I do not know the answer to that because I am not involved in that particular process.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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It is kind of like Lanigan's ball the way this particular consortium has changed.

Mr. Mark Griffin:

It is kind of a which? How did the Deputy describe it?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I said it was like Lanigan's ball, there have been that many changes.

Mr. Mark Griffin:

Okay.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Enet is now a partner as opposed to a main consortium. Was a second pre-qualification test required given that Enet was leading it before?

Mr. Mark Griffin:

My understanding is that Enet was never leading. Granahan McCourt was always the lead part of the consortium. Where there are changes in consortium membership, there is an obligation as part of the procurement arrangements that a pre-qualification questionnaire must be redone. We have to look back at the technical, commercial and financial capacity of the party.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I refer to the report prepared by Colm McCarthy. What happens when something like that comes in? It is a sizeable piece of work which obviously feeds into the information the Department has and must evaluate in the context of the broadband plan. What would be done with that?

Mr. Mark Griffin:

When one goes back to the initiation of the procurement process under the national broadband plan, we consulted very extensively with industry and the general public on how this should look, what the technical standards were and all of that kind of stuff. We did a cost-benefit analysis, or CBA, at the outset and updated it.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I thought Mr. Griffin said the Department did not do a CBA but-----

Mr. Mark Griffin:

I did not say that. We did a CBA absolutely for the national broadband plan at the outset and it has been updated on a number of occasions.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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To cut in for a moment, the Department sent us information on the MANs, phases 1 and 2. Can the schedule be explained to the committee? The different locations are listed but what does the reference to the number of operators using MANs mean?

Mr. Mark Griffin:

It is the number of service providers using the MANs in any particular location. MANs involve a wholesale operation and retail service providers come on that to provide services.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In some areas, there are none while in others there are 20. What kind of people are the 20?

Mr. Mark Griffin:

They are retailers like Eir, Vodafone and some of the wireless operators.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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And there are 20 different ones in some towns. How many operators are out there?

Mr. Mark Griffin:

In our response, we said we knew there were 63 service operators in total using MANs. Some of them can be quite small providing a small-scale wireless service within a particular area. There are three that are called "unlit". Members will see Belmullet in phase 1 and there are two in phase 2 which are Knock and Banagher.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They are not up. There is no take-up yet.

Mr. Mark Griffin:

They are not economic enough to function at this point in time.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How many towns are covered by MANs?

Mr. Mark Griffin:

There are 94.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There are 94 active. How many houses are connected in those 94 to MANs?

Mr. Mark Griffin:

It is primarily services to business. There are very few houses. However, it is not secret and the NBP consortium has made it clear in its press statement of 18 September that it sees the benefit of using the MANs operation with its fibre ring and connection to back hall as part of the technical solution to the rolling out of the national broadband plan.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Who said that?

Mr. Mark Griffin:

When they submitted their final tender - the national broadband plan final bid tender which we received on 18 September - the press release said part of this will involve using existing infrastructure in the State sector, namely, the metropolitan area networks.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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These are in the towns. Rural broadband is rural areas.

Mr. Mark Griffin:

The network will be used to provide spurs to go out to rural areas.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They will connect back to the MANs.

Mr. Mark Griffin:

Yes, to the co-location centres.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are the MANs capable? They were designed for the urban areas in which they are located.

Mr. Mark Griffin:

Absolutely. They will fibre back to the co-location service within the MAN.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In the nearest town.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Out of the 94 towns that have MANs. How many houses in the 94 towns are connected to MANs?

Mr. Mark Griffin:

Currently.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes. Households and families.

Mr. Mark Griffin:

It is primarily MANs supplying to business. It is not households per se.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I understand. It is mainly businesses, Government Departments, big offices, hospitals and everything in the provincial towns that use MANs. Before we go to rural broadband, how many of the houses in those towns do not have access to quality broadband services?

Mr. Mark Griffin:

What we are seeing now in urban areas served by MANs is growing competition from Eir and Siro. Eir and Siro are providing the services to households and in some circumstances, probably co-locating back to the MANs and using that infrastructure. I expect that once the national broadband plan is up and running, one will see a far greater level of usage of MANs to provide-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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When were MANs started?

Mr. Mark Griffin:

We started MANs in 2004, when the first contract was put in place. The second contract was in 2009.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Department is telling us now that it planned something in 2004 for metropolitan areas and that if rural broadband comes on, it might be one of the biggest users of a scheme designed for urban areas. That was never envisaged as a purpose. While it is great if it is possible, it shows the excess capacity that is there. What I do not understand is the following. We are here talking about the national broadband plan and the number houses it will serve yet here we have invested in State infrastructure to provide 94 towns with metropolitan area networks and the Department cannot tell us how many houses are connected to it. Mr. Griffin now tells me the ESB, Siro, Vodafone and others are in the process of starting to take connections from MANs to connect houses. Why would the MANs not be used in towns to connect houses when they are now deemed suitable to connect as source points for rural broadband? I do not understand why the houses in those towns are not connected. There might be certain big company offices or shops. I cannot understand all the focus on the costs of broadband for the future to connect houses when we have a massive scheme covering 94 urban areas but the Department cannot tell us how many houses are connected to that. Surely, we should know what is connected to the metropolitan area network. There is an awful gap in information when the Department is asking us to make a jump to count houses in rural areas but it has not even counted the houses in the urban areas that are already accessible.

Mr. Mark Griffin:

Certainly, we know the houses in rural areas which are provided with services by commercial operators. The primary purpose of the MANs was to generate competition around business access and to go into areas where there was a major market failure at the time to provide high-speed fibre services to business.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin is saying that 14 years on, Vodafone, ESB and Siro are now starting to connect houses.

Mr. Mark Griffin:

Siro-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does Mr. Griffin not think that someone at departmental level should know how many houses are connected to metropolitan areas before it starts talking about counting houses out in rural areas which do not yet have access to anything? We would like to know the percentage of the population in urban areas that is connected to MANs before we talk about what the percentage take-up might be in a rural area.

Mr. Mark Griffin:

We can look at that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does Mr. Griffin understand how one informs the other?

Mr. Mark Griffin:

Yes, I understand what the Chairman is saying. There is another thing, and I was not clear, there are mobile telephony services provided off the MANs. That is an important factor. We are seeing now, as I said, that in all of the MANs' towns, the fact that MANs has existed has started to spur competition with Eir and SIRO-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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When did that start?

Mr. Mark Griffin:

-----that either have or will be providing high-speed broadband in those areas, and may or may not be using the MANs to do that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin has now told me that he does not know whether the players will use MANs. The State has invested in putting fibre into 94 towns. Mr. Griffin has now told me that he does not know whether the figure will be used to connect to the houses.

Mr. Mark Griffin:

We know-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is Mr. Griffin saying he does not know?

Mr. Mark Griffin:

That is a market decision that these players will make. What I did say was that 63 service providers provide retail services. The MANs is a wholesale open access so it cannot-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Would the regulator of utilities or whatever he is called now have the figure for the number of people who are connected? Who would have that information at Government level?

Mr. Mark Griffin:

No, but we can see-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let us say I am from rural Ireland and want to move to rural Ireland but Mr. Griffin cannot even tell me how the Department has got on in the past 14 years in terms of urban Ireland.

Mr. Mark Griffin:

We can absolutely tell you exactly, for every single premises in urban Ireland, who has connection to a high-speed broadband service because we have mapped every single premises in Ireland.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can somebody email the map to us now?

Mr. Mark Griffin:

We can. The map is on the Department's website but we will certainly email it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can Mr. Griffin request somebody in his Department to email the map to the Committee of Public Accounts?

Mr. Mark Griffin:

Totally, yes. Every single premises - 2.3 million premises - in Ireland have been mapped. We know whether they will be provided with a commercial service and, therefore, we know which ones will not be provided with a commercial service. That is how the figure of 542,000 premises----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It depends.

Mr. Mark Griffin:

-----that will not be provided. Sorry, if that was the question the Chairman asked then I did not pick up on it. We know, down to every single household, based on an Eircode, whether they have a commercial service or not, when they may be provided with a commercial service and the gap then, which is the 542,000 in rural Ireland.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will return to the matter later.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Yes. There were lots of figures bandied about in the Dáil, including the claim that no one will be left behind and plenty of people see themselves in urban Ireland.

Mr. Mark Griffin:

Can I address that point?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Can I leave that as a comment?

Mr. Mark Griffin:

We are mapping those, in the urban areas, who are left behind as well.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Enet is wholesale. Is it appropriate that Enet should have a retail subsidiary called AirSpeed?

Mr. Mark Griffin:

Enet, I presume, can have as many subsidiaries as it wants. It is a commercial company. The important thing is that if it is selling services it is selling services on an equal-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Competitively.

Mr. Mark Griffin:

Exactly. On as equal and fair a basis as everyone else.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Yes. Did Enet apply pressure in 2017? The contract was extended in March 2017, it was bought by the Irish Infrastructure Fund in July 2017 and due diligence was being done. Obviously Granaghan McCourt would have been aware that due diligence was being done because the information would be needed to do that. Was pressure put on the Department? The first contract did not expire until 2019 and the second one until 2024. Was pressure put on the Department to extend the contract by Enet in advance of 2019?

Mr. Mark Griffin:

No. One of the key considerations for us was to provide certainty to the market in its totality. I can assure the Deputy, irrespective of any pressure that may have been put on, and there was none in this case, our only objective was to ensure that whatever deal emerged from the decision around extend or re-tender was to the benefit of the State and nobody else.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I welcome the witnesses. At the beginning of November The Irish Timesprinted figures that it obtained showing that 28,000 homes or as few as 14% of homes availed of Eir broadband out of a total of 200,000 homes. If the cost for the national broadband programme ranges between €1.5 billion and €3 billion then that suggests the cost of connecting each house would be at best €20,000 per house or, in a worst case scenario, €40,000 per home. Does Mr. Griffin believe, based on those figures, that the unit price per household represents good money for value for the taxpayer?

Mr. Mark Griffin:

First of all, the report in The Irish Timesis wrong. The number of premises passed by Eir is about 211,000. It has connected over 40,000, which is close to 20%. If one looks at any international comparator, and Eir's own projections on what it is it would have expected to achieve within that relatively short period of time, it would have been very happy with that level of take up. There is a lag between houses being passed, services being provided by the retail services, time to connect and all of that. In fact, when we saw those figures from Eir, and I do not think Eir will have any difficulty with us quoting them because I think they came out with a statement themselves around that time, we would be quite encouraged by the level of take up at this stage.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that the Department's outlook? Are we saying we are happy if we get 20% take up for our investment of between €1.5 million and €3 billion?

Mr. Mark Griffin:Not at all. Absolutely not.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The indicator at the moment for Eir is 20% instead of 14%.

Mr. Mark Griffin:

The indicator is fair at the moment. We are looking at a roll-out that has been happening for about two years.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes.

Mr. Mark Griffin:

We are seeing now some of the big retail providers and marketing services. Members would have seen Vodafone with the Bannon ad and all of the rest. We know that Sky is getting into that space.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes.

Mr. Mark Griffin:

So we will see a lot more services starting to be offered by retail providers.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What will be the uptake in percentage terms?

Mr. Mark Griffin:

Does the Deputy mean the uptake that we will have under the national broadband plan, NBP?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes.

Mr. Mark Griffin:

I am in a difficult position, Deputy, because you are asking me now to get into stuff that is the subject of a procurement process. We would expect to see levels-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Let us just say my figure was a little bit out and the cost is €30,000 per unit. What kind of cost per unit are we broadly saying is value for money? As somebody who is based in rural Ireland I obviously want access for everybody to the greatest extent possible.

Let me move on to my next question. What analysis has been done on 5G and its provision rather than fibre? Around the world 5G technology seems to have overtaken fibre as a means of delivering high-speed broadband. From my uneducated spot, it seems to me that 5G must be cheaper if it could work.

Mr. Mark Griffin:

The answer is 5G is not a substitute for fibre to the home.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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There must be an awful lot of publications peddling lies.

Mr. Mark Griffin:

I would not say they are lies. I would say that they do not have a full command of the situation. There was a very good report published by ComReg last Friday and it is up on its website. In fairness, I suspect that members would not have had an opportunity to look at it. ComReg is very clear that 5G is a complementary technology to fibre to the home. Our own internal technical experts have told us that 5G is complementary to fibre to the home.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What is meant by complementary?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Please explain what is meant by the word "complementary".

Mr. Mark Griffin:

One is dealing with a different type of issue; 5G in mobile is effectively providing services to outside one's front door. Fibre to the home is providing a fixed service to a premises that is capable of being scaled. So, effectively, with a fibre the-----

Capable of what, sorry?

Mr. Mark Griffin:

Capable of being scaled or future-proofed. Effectively one has unlimited capacity with fibre because the technology-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is about capacity, speed-----

Mr. Mark Griffin:

-----and scalability. If one looks at what is happening internationally-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

To the ordinary Joe, myself included, 5G, if it is working well, means I can watch a movie on my phone. To me, fibre also means I can look at a movie on my phone. The latter potentially costs between €20,000 and €40,000 per unit while the former, theoretically, is a network of appropriate masts with sight lines. Is that not it?

Mr. Mark Griffin:

If one looks at the ComReg report, it states that getting to 99.5% geographic coverage would require an additional 6,000 masts. One must remember all of the planning issues involved there, as well as the costs. ComReg called out a cost of €1.8 billion for ubiquitous 5G across Ireland. Certainly 5G will allow one to watch a movie on one's phone but it will not allow an architectural business in rural Ireland, for example, to look at detailed drawings in order to finalise a design, prepare a bid and submit it to a client. It is also clear from the 5G versus fibre to the home debate that scalability of services with a fixed fibre network is far more easily achieved. We have looked at this quite closely. We have taken-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Has the Department done a cost-benefit analysis, comparing one with other?

Mr. Mark Griffin:

Yes, absolutely. We have done a cost-benefit analysis and-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Are we allowed to see that?

Mr. Mark Griffin:

We will publish the bulk of the documentation relating to the national broadband plan after the pre-preferred bidder stage.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I understand Mr. Griffin's point on scale and the fact that it might not be possible to send detailed CAD plans for a house or submarine with 5G as quickly as with fibre. I understand all of that but what is the percentage difference between the two? I am not expecting Mr. Griffin to give us the actual figures but is it 50% better to go with fibre or 20%?

Mr. Mark Griffin:

In what sense? In terms of capacity or-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In terms of the Department's cost-benefit analysis. I am not looking for the actual money figures but-----

Mr. Mark Griffin:

I would need to back and look at the original cost-benefit analysis. At that point, fixed wireless or 5G was not really on the radar but the analysis found that 4G would cost in excess of the cost model for the fibre-to-the-premises solution. The other point is that the cost that has been set out in the ComReg report is €1.8 billion.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

A cost of €1.8 billion for what?

Mr. Mark Griffin:

A sum of €1.8 billion for ubiquitous 5G coverage around Ireland.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is ComReg's costing on that. The estimate is €1.8 billion and there also would be planning issues involved.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is that for the whole country?

Mr. Mark Griffin:

No, for 99.5% coverage.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is €1,000 per house. If there are 1.6 million houses in the country and it costs €1.8 billion, that is approximately €1,000 per house which is very cheap compared with the other figures.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Compared with my figure of €20,000 to €40,000 per household. The other issue-----

Mr. Mark Griffin:

I did not say fibre would cost between €20,000 and €40,000.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know; I said that. Mr. Griffin said that the Eir figures are wrong. I said 14% and Mr. Griffin said that it is now closer to 20% and growing. It is still in there though, between €20,000 and €40,000, which is a lot more than €1,000. Mr. Griffin also said that the original analysis dealt with 4G but 5G is a very different animal.

Mr. Mark Griffin:

Yes but we also have done the assessment on 5G. One is still constrained in terms of capacity with 5G. If one looks at fibre to the home-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What is the percentage of NASA engineers in rural Ireland who want to email detailed packages and plans or would the majority of people be happy enough to watch Netflix?

Mr. Mark Griffin:

The risk we take as a country is to decide what is needed based on what we are seeing now rather than on how society will evolve over a 25-year period. If one looks back, one sees that the data demands today are multiples of the data demands of only a decade ago, for example. The nature of work in urban and rural Ireland, the jobs people will be doing and the demands for data will undergo transformational change over the next 25 years.

The data upload capacity on mobile technologies at the moment is around 15 Gbit per month - that is at the high end - but with fibre to the home or high-speed fixed broadband, one is talking about ten times that level.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can Mr. Griffin repeat those figures please?

Mr. Mark Griffin:

The data capacity is around 15.6 Gbit on a mobile network compared with 154 Gbit per month and the latter is increasing the whole time. There is a real issue around capacity and scalability. When we set the threshold in 2015 in terms of what the scheme would provide, we set speeds of 30 Mbps to download and 6 Mbps to upload. The European Commission came out with a paper in 2016 stating that by 2025, all households must have a minimum of 100 Mbps and all businesses should be capable of 1 Gbps, if they so wish and that all households must be future-proofed to have 1 Gbps download speeds. We must make sure that whatever we put in now is future-proofed for the next 25 years at least.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The briefing note supplied today says that one of the objectives of the national broadband plan is to deliver State intervention to ensure a national high-speed broadband network for Ireland with minimum download speeds of 30 Mbps and upload speeds of 6 Mbps.

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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This process commenced three years ago in December 2015, with the preparatory work on it beginning in 2013. Mr. Griffin is now saying that since the launch of the plan in 2015, those targets of 30 Mbps and 6 Mbps have changed because of European directions. What is the Department saying now?

Mr. Mark Griffin:

When we set out the specification in 2015 we said that the solution had to be future-proofed.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What did that mean then?

Mr. Mark Griffin:

That meant there was no point in putting in a solution that could only provide 30 Mbps. Any solution needs to be capable of being scaled and interestingly, the three bidders that came to the table originally all proposed fibre to the home. If one looks right across Europe, the technology that is being deployed to ensure that any broadband network is future-proofed is fibre to the home.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Does that include the existing Eir lines that are out there, going into peoples' homes or are they new and separate lines?

Mr. Mark Griffin:

The ones that are being done under the rural-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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No, I mean the ones that people have in their houses already.

Mr. Mark Griffin:

The ones that are being done under the rural deployment are predominantly fibre to the home. Perhaps the committee could put the question to Eir representatives when they appear before it but my understanding is that the ones that are being done by Eir are a combination of fibre to the home and an enhancement of the copper network, which will give approximately 100 Mbps.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin knows well that the old Eir copper network, which is running from house to house in most of Ireland is not remotely capable of providing 1 Gbps.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are being codded here today

Mr. Mark Griffin:

Codded by whom?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I will explain. As a person from rural Ireland, I believe rural Ireland is being codded by this national broadband plan. I will take Portlaoise as an example, but every county is the same. At the moment, under the metropolitan area network, MAN, plan in Portlaoise, the operators to which we have referred, including Vodafone, Siro and the ESB, are offering a 1 Gbps service to households. That is 1,000 Mbps. What the Department is offering to the houses two miles out the road is only 3% of that or 30 Mbps.

Mr. Mark Griffin:

No.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is what the Department started out-----

Mr. Mark Griffin:

No.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let me finish. The broadband plan initially referred to a minimum download speed of 30 Mbps. Future-proofing could require a marginal increase but even if we went to 100 Mbps to which Mr. Griffin referred to as a target, the NBP is not, in its wildest dreams, really future-proofed. Europe has told the Department that the 30 Mbps target was way out of touch in the context of modern requirements.

At best, even if it reaches a maximum of what is being offered, it will only be offering a service to the people of rural Ireland that is 10% of the speed of what is already available in urban Ireland.

Mr. Mark Griffin:

Not at all.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am quoting the Department's figures.

Mr. Mark Griffin:

Sorry, what the Chairman is quoting is a document that went out in 2015. Things have moved on.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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This is the document the Department gave to us last night.

Mr. Mark Griffin:

Yes, and the question-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin should be telling us what is in the broadband-----

Mr. Mark Griffin:

That is what I am trying to do now.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Why did he not put it in this document?

Mr. Mark Griffin:

There are only certain things I can tell the committee about the broadband plan because we are still in a procurement process. What I said-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

All we can go on is what the Department has provided us with.

Mr. Mark Griffin:

And the questions that have been put to me during the course of the morning, which I am trying to answer.

The minimum specification we set out in 2015 was based on the state aid guidelines that were in place at that time. Every single bidder that came to the table offered fibre to the home. The solution that is still on the table with the final bidder is fibre to the home. Every single rural premises in Ireland, bar the most remote, which may account for 2%, will have a fibre-to-the-home solution. There will be no restriction. They will be no worse off than the cities. In fact, when we get this done, it may in many cases be better than what is being provided in the cities. It is a fibre-based service, with gigabit potential, that will be provided to the 542,000 premises.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Except, a moment ago, Mr. Griffin said some of it will be based on the old Eircom copper network that will never-----

Mr. Mark Griffin:

I did not.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He said it would be a combination of the existing Eir copper lines going into people's houses.

Mr. Mark Griffin:

No.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. Griffin said that a moment ago.

Mr. Mark Griffin:

No, what I said referred to the urban areas, which was the question put by the Chairman. He asked me to talk about what Eir is doing. I tried to make a distinction between what it is doing in the 300,000 premises that are being provided with services under the commitment agreement with the Department. That is a predominantly fibre-to-the-home network. In urban areas, Eir is currently providing a mix of fibre to the home and an enhancement of its copper network - VDSL, I think it is called - which will give somewhere between 100 Mbps and 150 Mbps. I read in the media that the Eir operators have indicated their intention to fibre the urban areas. Therefore, nobody in rural Ireland will be any worse off than anybody in urban Ireland. In fact, for a period of time they are likely to be substantially better off.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Okay. We will come back to it later. I have cut across Deputy MacSharry.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I want to finish on the 5G issue. For absolute clarity, was the cost-benefit analysis that was done in regard to 4G or 5G?

Mr. Mark Griffin:

As the cost-benefit analysis has been updated on a number of occasions, we have looked at 5G technology both on cost grounds and in terms of its ability to provide the service.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is there a cost-benefit analysis document?

Mr. Mark Griffin:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is it 4G or 5G?

Mr. Mark Griffin:

The initial one was done on 4G-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is out of date. Is there a new one?

Mr. Mark Griffin:

We updated the cost-benefit analysis-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Therefore, we did not. We have a 4G analysis but we do not have a 5G analysis.

Mr. Mark Griffin:

We updated the cost-benefit analysis to take account of changes as the process progressed. It looks at costs and benefits. It looks at the costs of the technology that is proposed as a solution relative to the benefits that will accrue.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I know what a cost-benefit analysis is. What Mr. Griffin seems to be telling me is, "We did one on 4G and we kind of did a bit of a desktop update to turn it into a 5G." No dedicated 5G cost-benefit analysis was done.

Mr. Mark Griffin:

That is because the figures on 5G are only recently available but-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We have now established that a cost-benefit analysis was not done on 5G.

Mr. Mark Griffin:

My point is that, in considering whether and how one might approach a 5G cost-benefit analysis, the first question is whether it is a technology that is proposed, next, is it a technology that will give the totality of the solution, which everybody one speaks to who is expert in this field says it does not, but that it is complementary to the provision of high-speed broadband and fibre to the home-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am only an ordinary five-eight. What I respectfully suggest is that the Department does a detailed cost-benefit analysis on 5G before we go from potentially €1,000 per household, as the Chairman said, to somewhere between €20,000 and €40,000.

Mr. Mark Griffin:

I do not know where the Deputy is getting the €20,000 to €40,000.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I just told Mr. Griffin where I am getting it.

Mr. Mark Griffin:

That is a top of the head, back of the envelope calculation. I can assure the Deputy-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No, it is not. I am quoting from a thing-----

Mr. Mark Griffin:

I can assure the Deputy-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I said 28,000 people out of 200,000 was the take-up, and Mr. Griffin said it is actually more than that.

Mr. Mark Griffin:

No.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I said 14% and Mr. Griffin said it is actually over 20%. Will we do the sums to work it out?

Mr. Mark Griffin:

That is the take-up now.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is the take-up now. Therefore, on the never-never, it is going to be 90% and Eir will be printing money. That is its business. That is commercial. I am only interested in the public's money. We do not have a cost-benefit analysis on 5G, as we have established. The second thing is that, thus far, two years into it, there is only a percentage of take-up. I am just taking a wild guess that a lot of home users are not NASA engineers designing the space shuttle and might be happy to access Netflix and use a little bit of Google. I am wondering, before we dish out somewhere between €1.5 billion and €3 billion, whether we should look at this. I am not an expert. I am just a simple taxpayer in here to ask questions on behalf of other taxpayers. Let us do a cost-benefit analysis on 5G, which, by Mr. Griffin's own admission, we have not done because the figures are newly available.

Mr. Mark Griffin:

I assure the Deputy that the evaluation of the entire programme prior to a recommendation being made to Government will take account of where 5G-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Excellent. Can Mr. Griffin provide the information to the members of Committee of Public Accounts, either on a confidential basis or publicly? There is precedent for this in that the committee has received information in private session. I am sure the Comptroller and Auditor General would have an interest.

Mr. Mark Griffin:

What we have said is that, post-preferred bidder, as the Minister said in the Oireachtas on-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Post-preferred bidder, the deal is done.

Mr. Mark Griffin:

It is a matter for the Government to decide whether the deal is done or not.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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When we are spending the money, we can decide whether we spend it wisely. My suggestion is that we do a cost-benefit analysis on 5G, which we do not currently have. Why do we have to hide the truth from the people?

Mr. Mark Griffin:

I am not hiding anything.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I did not say Mr. Griffin was, but the system and the culture is, "Do you know what we will do? After we spend the money, we will have a good old sit-down and see did we spend it correctly." All I am saying is we have an opportunity now-----

Mr. Mark Griffin:

That is a complete and utter misrepresentation of the approach we have taken in the Department, every single step of the way.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is not what I said.

Mr. Mark Griffin:

It is. The Deputy said our approach is, "We will go through a process and, sure, that is just a process, and then we will have a look-back." What I am saying to the Deputy is-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am going to get into the process shortly.

Mr. Mark Griffin:

There is a detailed evaluation ongoing in the Department at the moment, which is looking at the commercials and the technical delivery-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know that. I do not want to hold up Mr. Griffin. I have read all this stuff. I have heard umpteen parliamentary questions reeling out this stuff.

Mr. Mark Griffin:

The role of 5G-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I want to use our time more effectively.

Mr. Mark Griffin:

The Deputy has to allow me to answer the questions.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I did not ask Mr. Griffin the question he is answering now. He is talking down the clock.

Mr. Mark Griffin:

Then let me react to the Deputy's commentary. The role of 5G will be considered in all of that.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is great. Mr. Griffin is saying to me, "You can take it from me we will be getting value for money and we will be analysing 5G." What I, the Committee of Public Accounts and the State are asking is that we get a look at it. Let the Department get a cost-benefit analysis done on 5G and give us a look at it, and give the Comptroller and Auditor General a look at it.

Mr. Mark Griffin:

What I have said is that we will provide all this information post-preferred bidder.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

After the money is gone.

Mr. Mark Griffin:

Post-preferred bidder.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Which is bananas.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will come next.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am nearly finished. Mr. Griffin mentioned that some of the Eir network is going to have to be used for delivery. At what stage are we in the negotiations with Eir for that?

Mr. Mark Griffin:

As I understand it, the remaining bidder has been in extensive negotiations with Eir since February of this year on what is known as a make-ready programme. There is a lot of work to be done in terms of the condition of the Eir pole network, given we will be re-using about 1.2 million of them, and the Eir duct network in order that, when the contract is signed, the company can mobilise-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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We are getting technical. Mr. Griffin is saying the preferred bidder has negotiations at an advanced stage and they are going well.

Mr. Mark Griffin:

They are in discussions, yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Did the Department ever do a cost-benefit analysis on repurchasing Eircom?

Mr. Mark Griffin:

No.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Why not?

Mr. Mark Griffin:

I did not realise it was for sale.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Everything is for sale.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. Griffin knows it has sold maybe four times since privatisation, so do not go there.

Mr. Mark Griffin:

I was not aware of the most recent-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Nothing has been put up for sale more often.

That is a different answer.

Mr. Mark Griffin:

We have made an assessment of the likely cost.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Department has done an assessment of it.

Mr. Mark Griffin:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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As an ordinary five-eight member of the committee working on behalf of the taxpayer, I believe it is something we should scope-out and examine in terms of repurchasing the company or, at a minimum, the infrastructure, if the infrastructure was ever for sale on its own.

To return to the process, I wish to deal with the issue of governance. I am not casting any aspersions on the former Minister or anything like that, he is a decent hardworking man but I noted the various meetings that were held and that we have a report which states the process was not contaminated. How can we call it a tender process when there is one tenderer? Is that not just a negotiation?

Mr. Mark Griffin:

The process was run as a competitive dialogue process, which is provided for in the Office of Government Procurement guidelines regarding how one would run a process of this nature where one is dealing with a very complex design and does not have a clear line of sight of what will be the technical solutions. That is absolutely provided for in the public procurement processes. We started a pre-qualification or an initial-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not mean to be rude but I do not need the whole process outlined. I know how tenders work. Was it put up, for example, like a normal tender, on the eTenders website?

Mr. Mark Griffin:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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We were left with one person and we were negotiating along that basis. In terms of these various meetings and the suggestion that there may have been contamination of the process, was the former Minister's diary secretary a civil servant or on the political staff?

Mr. Mark Griffin:

The diary secretary is a civil servant.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did that diary secretary book any of these meetings or dinners, the formal or informal ones?

Mr. Mark Griffin:

The formal meetings would have been booked. Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The dinner in New York, for example, and those sorts of ones.

Mr. Mark Griffin:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What about any of the informal ones?

Mr. Mark Griffin:

I do not know to which informal ones the Deputy is referring.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The various meetings with the tenderer.

Mr. Mark Griffin:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Some were formal and some were informal. Would they have been diaried and were they part of the-----

Mr. Mark Griffin:

There were a number of dinners that I understand were not diaried.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. Mr. Smyth is the person who carried out the report, is that right?

Mr. Mark Griffin:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Smyth is on a panel of consultants to which the Department refers and uses from time to time, is that correct?

Mr. Mark Griffin:

No. Mr. Smyth was appointed at the start of this process through an independent procurement process as a process auditor.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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He was there all along; he was in-house, as it were.

Mr. Mark Griffin:

No. He was not in-house, but he did attend meetings.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. He was part of the process then.

Mr. Mark Griffin:

I do not know what the Deputy means by that.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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He was on the books to do with the national broadband plan, NBP.

Mr. Mark Griffin:

He was being paid an amount of money to ensure the process was fully in compliance with the set of rules that surround-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was he at any of the meetings the former Minister had with the tenderer?

Mr. Mark Griffin:

I am not sure if the former Minister ever met Mr. Smyth.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did Mr. Smyth, as part of his investigation, interview, for example, the diary secretary?

Mr. Mark Griffin:

I do not know. Whatever is in Mr. Smyth's report-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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No. From a basic governance point of view, I am interested to know if Mr. Griffin would have advised a Minister to meet a tenderer for a contract?

Mr. Mark Griffin:

Would I advise a Minister to meet a tenderer for a contract?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes.

Mr. Mark Griffin:

There were a number of meetings where the former Minister has met, and they are documented-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I understand that, but does Mr. Griffin consider that represents good governance?

Mr. Mark Griffin:

I think the issues around the-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did anybody say to the former Minister, "I must advise you - although it is entirely up to yourself, you make your own decisions - that it is not good governance to meet the bidders in the process"?

Mr. Mark Griffin:

When one looks back through the Smyth report, what has been set out clearly is a range of meetings that Mr. Smyth has concluded fell within-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I did not ask Mr. Griffin about that. I asked him would he, as Secretary General of the Department, from time to time not say to a Minister:

I think it is unwise for you to take that course of action. I think it is unwise for you to take the other course of action. I think it is unwise for you to meet this person because they are tendering to provide a paper to the Department, broadband to the State or whatever.

Mr. Mark Griffin:

That issue may arise from time to time and the normal course----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did it arise in this instance?

Mr. Mark Griffin:

----- is that the diary secretary would consult the division and say there was a-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did the diary secretary consult the division or Mr. Griffin, as the Secretary General, and say, "the Minister is meeting the bidder here, what do you think?

Mr. Mark Griffin:

On a number of them which are not in the diary, we would not have been consulted.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay, but some were in it. Would any advice have been given that this was unwise?

Mr. Mark Griffin:

Specifically, where formal meetings were being conducted, we would not have had an issue with then Minister being accompanied by an official.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was there a point at any stage, that Mr. Griffin advised the then Minister that he should not-----

Mr. Mark Griffin:

I do not recall that, no.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Griffin does not recall that.

Mr. Mark Griffin:

No.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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With the benefit of hindsight, would Mr. Griffin be advising him of that now?

Mr. Mark Griffin:

I was not aware of a number of the private dinners.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Griffin think, in the main, it is good governance to meet with bidders in a process?

Mr. Mark Griffin:

I beg your pardon.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Griffin think, in the main, it is good governance to meet with bidders in the process?

Mr. Mark Griffin:

We have always met with bidders in the process. There have been a number of occasions-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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We all know what we are talking about.

Mr. Mark Griffin:

-----when the then Minister met bidders in the process.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Right.

Mr. Mark Griffin:

For example, on 26 June, which is one that springs to mind.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The former Minister seems to have said on record that all these meetings were held in order to keep McCourt in the procurement process. Did we have to beg this guy to tender or nurse him along and have dinner with him to make sure he is kept sweet?

Mr. Mark Griffin:

Again, I think a bit of context is important. The Deputy will recall when Eir withdrew from the process on 13 January, there was a lot of media coverage about whether the process could continue, how effective it might be and the difficulties around that.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why were there not dinners with other people to bring them in as well?

Mr. Mark Griffin:

We did meet Eir a week before that and we made it very clear to Eir that we thought it was premature for them to withdraw from the process.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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When Mr. Griffin says "we" does he mean the Minister or officials?

Mr. Mark Griffin:

On 23 January, we and officials met.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Officials. Did the Minister have dinner with the chief executive officer, CEO, of Eir-----

Mr. Mark Griffin:

I do not know.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----to see if they would come back to the table?

Mr. Mark Griffin:

I do not believe there was a dinner but I cannot say that.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is just unusual. If we were anxious to keep bidders in the process, and it required dinner with some people but not with others, that is pretty selective.

Mr. Mark Griffin:

I am not going to comment on it over and above what was said.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Griffin is the main man in the Department. From a basic governance point of view, inconsistencies seem to have been rife. On the one hand, we wanted to keep a person at the table, but we did not really care about the other person being kept at the table-----

Mr. Mark Griffin:

That is not true.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----because we did not go for dinner with that person.

Mr. Mark Griffin:

There was a long meeting with Eir on 23 January when the CEO came in. I am not breaking any confidences because I think this is on the record.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It needs to be on the record and I would not worry about breaking any confidence at all. This is the people's money.

Mr. Mark Griffin:

He came in to meet the then Minister and officials were in attendance. We made it very clear to him when he said they were looking at the company withdrawing from the process that we thought it was premature and that there was still far more discussion to be had.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is all right but, as somebody said, between formal and informal meetings, there were six or eight meetings with the last remaining person. If it was all about keeping people in the procurement process-----

Mr. Mark Griffin:

I do not have the exact figures off the top of my head.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----it seems extraordinary efforts were-----

Mr. Mark Griffin:

If one were to listen to Deputy Naughten's intervention in the Oireachtas on Monday, he set out very clearly the extent of engagement he would have had with both Eir and Siro while they were still in the process.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Just no dinners.

Mr. Mark Griffin:

I do not know whether there were dinners or not.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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As I said at the start of my contribution, I have the height of respect for Deputy Naughten. I have no doubt he was doing the right thing but, from the witnesses' perspective, as the senior civil servants who advise the Minister of the day, did nobody take him aside and say, "Minister, this is poor governance, you should not meet this person" in the same way as the Secretary General in the Department of the Taoiseach took the Taoiseach aside and said that the strategic communications unit does not look good for us, and now it is gone. That Secretary General was quite right. Did it not occur to the Mr. Griffin to say to the then Minister either to bring everyone for dinner or nobody for dinner?

Mr. Mark Griffin:

We were not privy to the fact that-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, but the Department was on some occasions because the diary secretary arranged it, as Mr. Griffin said.

Mr. Mark Griffin:

No, I stated that the diary secretary arranges formal engagements-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Griffin stated that the diary secretary runs it by the division.

Mr. Mark Griffin:

I do not know whether the four dinners referred to were in the diary.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did Mr. Smyth look into those issues?

Mr. Mark Griffin:

As I understand it, Mr. Smyth considered all issues. I am accepting his report as set out. It is an independent report to the Taoiseach and the Minister

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What metrics are used to establish whether a process is contaminated?

Mr. Mark Griffin:

As I understand it, there is a PIM, a PQQ and a document that sets out a range of-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What are PIM and PQQ? I ask the witnesses to refrain from using too many acronyms.

Mr. Mark Griffin:

A PIM is a project initiation memorandum. A PQQ proposal is the pre-qualification document which sets out the basis for behaviour over the course of the procurement process. That was available to Mr. Smyth as was information in regard to canvassing and so on. He drew his conclusions-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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He made his own judgment, subjective as it may be, as an individual------

Mr. Mark Griffin:

I do not think it is subjective because he------

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Griffin did not let me finish. His judgment is subjective because there are no metrics to measure whether something is contaminated. All we know is that the former Minister went to what appear to be unusual lengths, including dinners, formal or informal, to keep a bidder in the process, but the same effort was not demonstrated in regard to other bidders. Is that a fair comment?

Mr. Mark Griffin:

I would not necessarily accept that. We worked very closely with the two other bidders to ensure that we had an effective dialogue and procurement process. They made decisions, some of them commercial. That information is in the public domain. Siro made a decision on the basis of its ability to submit a competitive bid while Eir had concerns regarding some of the conditionality being imposed through the contract and some of the regulatory arrangements that are in place and it decided to withdraw, as is its right. These are questions that can be put to representatives of those companies when they appear before the committee.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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In reply to parliamentary questions, the Minister gave an excellent breakdown of the detail of the €22 million that has been spent so far. I wish those who appear before the committee provided the same level of detail in regard to figures. Approximately €9 million went to KPMG. Why was it paid €9 million? It is an accountancy firm.

Mr. Mark Griffin:

I can address the services it provided or I can forward that information to the committee in writing, whichever members prefer.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I ask Mr. Griffin to provide the Ladybird version and to forward the technical detail to the committee in writing.

Mr. Mark Griffin:

KPMG provided financial and procurement advice, a budget model and reports on financial appraisal, funding, governance, project reappraisal-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It provided a governance report.

Mr. Mark Griffin:

Yes, it did.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does the report refer to having dinner with a bidder?

Mr. Mark Griffin:

I cannot recall.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would it be possible for the committee to see that report?

Mr. Mark Griffin:

It was more in regard to governance of the contract than how the Department or Minister should interact with parties.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Could we see that report?

Mr. Mark Griffin:

KPMG provided advice throughout the procurement process. We can provide that document post the-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

After the money is spent.

Mr. Mark Griffin:

No, after we appoint a preferred bidder and before a contract is signed.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The committee may not have it before then.

Mr. Mark Griffin:

It can be provided after we appoint a preferred bidder and before a contract is signed.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I would be interested in reading that report. I ask Mr. Griffin to continue. I apologise for interrupting him. Is that everything? Those are the headline issues.

Mr. Mark Griffin:

There is far more but if the Deputy-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I ask Mr. Griffin to give us a breakdown of what KPMG did for the €9 million, which is probably quite technical.

Mr. Mark Griffin:

I am happy to provide my two-page briefing which covers all of the services provided.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Griffin.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The witnesses are very welcome, as is the information they have provided. I will not address broadband in great detail because I only have ten minutes and there are other issues I wish to address. I note the twin aims in regard to climate change and regional development outlined in Mr Griffin's opening speech. All Deputies have received the documentation I have before me. A man I know in Indreabhán recently emailed me with an update on his broadband. The houses 100 m on either side of his house have fibre broadband but this man who is attempting to work from home has nothing in spite of attempting to obtain broadband. That is the reality on the ground.

Mr. Mark Griffin:

The Deputy raised a case this time last year on which I followed up. I am happy to do so on this case also.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. Griffin followed up but the outcome was not good. I am referring to the same person and he is in exactly the same position as he was last year. I am not seeking a reply.

Mr. Mark Griffin:

Okay.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I raise this case to illustrate the reality of broadband provision. That person is attempting to work from home.

Mr. Mark Griffin:

The broadband for the area was to be provided by Eir in its roll out to 300,000 rural homes and businesses. There are issues to be addressed in that regard.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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His neighbours on either side have been provided with broadband by Eir. It is very difficult for the person to understand.

Mr. Mark Griffin:

It is totally frustrating.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. Griffin followed up on the case but the outcome was not satisfactory.

Mr. Mark Griffin:

I could not give the Deputy an answer.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I did not expect a satisfactory outcome, in reality. I am making a general point.

Broadband is very important but a wide range of matters come within the remit of the Department. Has it sufficient staff and expertise to cover that range of matters? It has taken me hours to read the documentation that has been provided. Issues such as land remediation, the Silvermines, Avoca and climate change have been addressed. At the recent climate change conference in Poland, the Secretary General of the United Nations stated that climate change action makes social and economic sense. Sir David Attenborough stated that we are at the point where climate change is threatening civilisation. Is there sufficient staff and expertise in the Department to deal with the significant range of challenges it faces? I am looking for a "Yes" or "No" answer.

Mr. Mark Griffin:

Most areas are well served. Certain areas remain under some pressure but I am reluctant to identify them because every assistant secretary in my Department will remind me of what I stated at the Committee of Public Accounts. Overall, I am satisfied with the staffing level in the Department. We have grown the Department in recent years. On resources to tackle climate change, there are approximately 66 staff in the Department, 92 in Sustainable Energy Ireland and 32 in the Environmental Protection Association. One must look at the full quantum of resources. Indeed, the local government system is now scaling up in terms of-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am zoning in on climate change because we must do so. Obviously there are problems in regard to housing, health and broadband but climate change trumps it all - excuse my poor word choice.

Mr. Mark Griffin:

On climate-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I have not finished. This documentation does not give the impression that the Department is on top of climate change action. I hope I am wrong but I do not get the sense that it realises the challenge and what it must do or that there is a very high-level team pushing this issue.

Mr. Mark Griffin:

Of all Departments, we have the best understanding of the challenge. We have a role in terms of driving the agenda and co-ordinating across Government. I appeared before the Oireachtas Joint Committee on Climate Action on 26 September and set out clearly what we are doing. We cannot do it on our own-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is true, but the Department must lead on this issue.

Mr. Mark Griffin:

Absolutely, yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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On leadership, what is the Department doing? What has it done in light of the information contained in the latest report, bearing in mind that the Minister stated we are 95% off the targets set for 2020? Now we have-----

Mr. Mark Griffin:

I could address the history in that regard but I see no point in doing so.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There is no point in doing so. I have read the report. I am not an expert but I am listening. What urgent steps being taken by the Department to deal with Ireland being 95% off target?

Mr. Mark Griffin:

We developed the national mitigation plan last year, which sets out over 100 measures-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Acting on that, please. All of this was set. We are not reaching our targets.

Mr. Mark Griffin:

By 2020, no, we are not. We are not going to come anywhere near them.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We will not reach them by 2030 either.

Mr. Mark Griffin:

I think, if one listens to what the Taoiseach and the Minister for Communications, Climate Action and Environment, Deputy Bruton, have said, they do not accept that as a premise. They have made it very clear.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am not interested in what the Minister said. I am listening to experts on climate change. We set targets that we are not meeting. What is the Department doing about that? We set targets for 2020. When we are not meeting them, what is the reaction of the Department? What steps are being taken?

Mr. Mark Griffin:

The Department's reaction is that we are very disappointed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Good.

Mr. Mark Griffin:

There is a historical piece to that and, if one looks at every other target that has been set at EU level for the Department, whether that is air quality or waste management, we are meeting those. There are particular circumstances around the climate sector that have made it very difficult to achieve the 2020 targets. I am going to park that and stop making excuses.

The Minister has made it clear to the Department that he wants an all-of-Government plan by the end of February next year.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What type of plan?

Mr. Mark Griffin:

An all-of-Government plan which will dramatically step up the range of ambition right across Government.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We committed to an all-Government, cross-departmental plan well before this announcement.

Mr. Mark Griffin:

In fairness to the Minister, one of the first things he said when he came into the Department in the middle of October, well before the 24th session of the Conference of the Parties, COP24, was that his objective was to ensure that Ireland is a leader. He is driving us very hard in the level of ambition. He is looking at the whole area of spending and taxation.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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When will the all-Government plan be ready?

Mr. Mark Griffin:

By the end of February next year.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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By the end of February next year, we will have an all-Government plan with specific targets.

Mr. Mark Griffin:

Absolutely.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Okay. Something that comes up all the time relates to the appropriation accounts. The Department has done well to have a clear audit, but on procurement and compliance with relevant guidelines, we have a significant change. Can we deal quickly with page 3 of the accounts? We are up at 13 non-compliant contracts at a value of €2.283 million.

Mr. Mark Griffin:

They are known colloquially known as the 40/02s. In truth, I was not happy when I saw the figure. The assurance I get is that all of these were signed off by the internal auditor in the Department. There were particular circumstances. For example, four of the contracts, amounting to just over €900,000, related to software licences for existing systems. Another four contracts, just short of €700,000-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I see it. I have read it. My question is why this is happening. Why has there been such a significant increase from the previous year?

Mr. Mark Griffin:

The software licences came up for renewal in that year. We had to take one big one, in particular, relating to ArcGIS which amounted to €684,000 on its own. There were other IT projects which could only be provided by a particular entity.

To return to climate action, we had to go to particular companies which had the expertise on climate modelling. That work amounted to €560,000.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that outlined in that paragraph?

Mr. Mark Griffin:

It should be outlined in the schedule the Deputy has.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That one is not highlighted in that paragraph where the 13 contracts are highlighted.

Mr. Mark Griffin:

There is "Reason for not having a competitive process"; modelling of the implications for Ireland of the proposed 2030 climate and energy framework; ongoing development and application of energy systems modelling and support for the development of a national mitigation plan. There is a cohort of-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Look at page 3 of the appropriation account, "The Department ensures that there is an appropriate focus on good practice", and there is reference to 13 contracts and software licences.

Mr. Mark Griffin:

The committee members do not get the detailed list.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. Griffin is highlighting some of those 13 contracts in this paragraph.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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He is referring to another now relating to climate-----

Mr. Mark Griffin:

They are all within that figure.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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They are all within the 13 contracts?

Mr. Mark Griffin:

Yes. I have a sheet I can give the Deputy, if it is of any use.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Lovely. Would Mr. Griffin expect that, by the time he is before us next year, this figure will have significantly reduced or gone back?

Mr. Mark Griffin:

There are only three contracts this year, to a value of €257,000.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is significantly down.

Mr. Mark Griffin:

Yes. This year was, I hope, a blip. We have a rigorous head of internal audit in the Department and getting 40/02s through her is very difficult.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What is Mr. Griffin calling those?

Mr. Mark Griffin:

Circular 40/02.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Okay.

Mr. Mark Griffin:

That is the shorthand.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Chapter 9 is entitled “Energy Efficiency National Fund."

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What has the Department learned? Would "debacle" be too strong a word for this? If I used the word "debacle" about this fund and what went into it compared with the small amount that came out of it, would that be unfair?

Mr. Mark Griffin:

I do not know what is going to come out of it yet because we know we will get back our capital plus whatever return might arise. We were in a particular situation when the fund was being established. We wanted to explore what models there might be to generate activity in the private sector. We were limited in the type of fund that could be put in place because we could not direct the activities of the fund. This was because doing so would have meant the money would have come onto the general Government balance sheet, which would have been problematic given the budgetary situation at the time. To comply with state aid rules, there was an obligation on the Department to be at arm's length to an extent.

As to lessons learned-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Let us put this in perspective. A fund is set up and €35 million is allocated. Very little is drawn down.

Mr. Mark Griffin:

I think about €50 million has been drawn down overall, but only €14 million of our funds. There is private sector involvement as well.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes, I understand that. The major amount was drawn up at the last minute in May. It was extended. It was to run for a period of time and then it was extended for a year. At the end of that extension, there was a drawdown of €10.8 million at that point. Up until May 2018, there was very little drawdown on the fund.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Okay. In the context of climate change, energy efficiency and €35 million being available, how can the Department stand over a fund of that amount, matched by private investors? I will not talk about the governance of it, as Mr. Griffin is telling me that state aid rules apply. Of that, €2 million is administration expenses, presumably to investors who gave advice.

Mr. Mark Griffin:

Yes, a fund manager and so on.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is €2 million of €35 million.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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A small amount is drawn down and, at the last minute, €10 million plus is drawn down on the basis of commitments. Mr. Griffin might deal with who will monitor the commitments and how they will be assessed.

Mr. Mark Griffin:

Again, there are standard criteria for how the money is to be invested. There was a period within which appropriate projects were identified. The fund, as the Deputy says, is administered by a fund manager who is in receipt of fees. It is important to say that, when we were looking at this, we got advice from NewERA, and it and the Department looked at the type of funds that would be appropriate for an investment of this nature. It is a widely used fund. I think there are 2,500 users in Ireland with investments of about €530 million. It is not an atypical fund. It was well understood and well known.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Can I stop Mr. Griffin for just one second? I am not trying to catch him out or anything.

Mr. Mark Griffin:

No.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We are looking at a fund in the context of the urgency of climate change and we are looking at a fund where €35 million is put into an account and not used. I am asking Mr. Griffin, as Secretary General, to comment on that for me. The fund has been stopped and moved into the climate fund.

Mr. Mark Griffin:

The full-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did it work?

Mr. Mark Griffin:

The full €35 million-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did it work?

Mr. Mark Griffin:

We will not know until the end of the investment term as to how-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Department is taking €21 million out of it.

Mr. Mark Griffin:

We made a decision at that stage because the scope of the fund was changing and there was a greater focus on well-advanced renewable energy projects.

A view was formed that we might be in a position to make better use of the funds through, for example, the climate action fund and direct investment in energy efficiency. On the lessons learned with regard to the point the Deputy made, when looking at the challenge we face in reducing carbon emissions, we have to look at all sorts of tools that may be available to mobilise investment in the private sector.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Wait just one second. A fund is set up.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It is not used, €2 million is spent on administration, and €10.8 million is drawn down at the last minute for future commitments. Surely that is not a good way to operate. Surely it does not in any way reflect the urgency with which direct action must be taken on climate change.

Mr. Mark Griffin:

If the Deputy looks at it in isolation, that is a fair point to make.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Okay.

Mr. Mark Griffin:

There is awful lot of other work going on in the Department in respect of energy efficiency, however. This is one tool that was trialled. With the benefit of hindsight, would we do it again and use this type of device? Probably not.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How are the commitments given in respect of the €10.8 million drawn down at the last minute monitored? What are the arrangements for oversight?

Mr. Mark Griffin:

We are on the investment advisory committee.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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A member of the Department is on the committee.

Mr. Mark Griffin:

Yes. We also get an annual report on the energy efficiency fund and regular reports on progress in respect of-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What has happened since these funds were drawn down? What reports has the Department been given in respect of the use of these funds since May of this year? What projects have been initiated?

Mr. Mark Griffin:

I do not know how much of this is in the public domain, but I do not think it is all that secret. It is marked "strictly private and confidential", but we have an update dated 6 November 2018. I will look to see whether the assistant secretary to my left who is over the energy area is gesticulating wildly in respect of confidentiality issues. One of the big proposals, which I know is in the public domain, is upgrading all of the lighting in the Mater Hospital. That is an investment of €10.5 million.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that investment in the private hospital or the public hospital?

Mr. Mark Griffin:

The public hospital. There is a range of other-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will Mr. Griffin provide the Chair with a list of the projects? Could we see the details of the projects before May 2018 and afterwards with regard to the €10.8 million that was drawn down? It would save time.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will the Department be doing a post-project review?

Mr. Mark Griffin:

Absolutely.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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When will that be done?

Mr. Mark Griffin:

The Government decision provides for a review. We will start that now.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Department will start it now.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Why was it not started before?

Mr. Mark Griffin:

The people in that area are extraordinarily busy.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is the question with which I started out. I fully respect the staff. I am forever thinking that the staff here are under extraordinary pressure. I started out with that question. Beginning a post-project review quickly is essential.

Mr. Mark Griffin:

I agree with the Deputy. In any division in any Department, people prioritise. If the Deputy were to ask me whether I have enough staff to do every single thing on the list of things to be done in the Department, I would say that we would probably need to double the size of it. We have to prioritise. This will happen.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Department prioritises but we see the result of failure to look at matters, failure to analyse, and lack of governance all of the time. It ends up costing more money. We made this point earlier today in a private session. Maybe it was public. I think I am coming to the end of my time.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Deputy is okay. She has another five minutes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Before I move on to Avoca and Silvermines, I have a question about page 16 of the appropriation accounts. Under subhead B7, what is "RTÉ spectrum"? It is under "Broadcasting".

Mr. Mark Griffin:

The thing that runs many of the mobile phone services throughout the European Union is a thing called spectrum. Spectrum is used by mobile phones services, broadcasting services and the emergency services. There is a particular band of spectrum that is used by broadcasting services, the 700 MHz spectrum. A decision has been taken at EU level that should now be used for wireless broadband services. There is a process by which RTÉ will migrate its broadcasting through that spectrum onto another platform. That requires capital investment. We provided the funding for that. There was a detailed service level agreement, a letter of entrustment and all the rest. It is carrying out the capital works on its network and we have reimbursed it for that.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that a once-off payment?

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It is fully vouched and all of that.

Mr. Mark Griffin:

Absolutely.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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And there is a service level agreement in place.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That will not happen again next year.

Mr. Mark Griffin:

No.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I will move on to Avoca, which is covered on page 13 of the Department's accounts. The Department has inherited all of this but again the failure to manage landfill is costing the taxpayer millions. When things are not done right, as was the case at Avoca and Silvermines, it leaves a legacy that costs a fortune. Is that not right?

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The taxpayer is left to pick up the pieces all the time.

Mr. Mark Griffin:

That is the case with regard to historical stuff. We are in better shape in respect of modern mine sites such as Galmoy and Lusheen where there are-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I can think of Aughinish and many other places which might not-----

Mr. Mark Griffin:

Even in the case of Aughinish we have bonds and financial commitments in place.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I may come back to that separately. The Department has bonds and commitments in place in respect of Aughinish.

Mr. Mark Griffin:

If the Deputy looks at Galmoy and Lusheen-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We will stay with Aughinish for a minute now that Mr. Griffin has mentioned the bonds and so forth. Does that mean we will not be in the position of having to use taxpayers' money to clean up?

Mr. Mark Griffin:

As I understand it, in respect of activity of the organisation in Aughinish, the Environmental Protection Agency, EPA, requires a bond and account with money lodged in it - I do not know the money involved off the top of my head - to cover any clean-up costs.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does the Department have the details of that somewhere?

Mr. Mark Griffin:

Probably. I do not know.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does the Department cover that?

Mr. Mark Griffin:

The EPA does but we-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is okay. I will come back on that separately.

Mr. Mark Griffin:

We can dig up the information.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will the Department inform us of the arrangements that ensure the bond is kept in place? Companies put up the bond but they may stop paying. The bond is really an insurance policy. Some insurance company comes up with the money to pay for it. It is not all lodged in an account. That is only valid if the bond is paid for each year.

Mr. Mark Griffin:

It may be helpful to the Deputy if we could give a general note on what is being done in the more modern mines in terms of clean-up obligations.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I would be interested in that to see if we are learning anything. I would also welcome the detail in respect of Aughinish. I am now hearing that we need not worry that the State will have to pick up the tab for the clean-up. Am I wrong?

Mr. Mark Griffin:

Is the Deputy referring to Aughinish?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Mr. Mark Griffin:

The issue of clean-up does not arise at the moment but-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It did not arise----

Mr. Mark Griffin:

Are we talking about Aughinish or Avoca?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am sorry. I got distracted because of the general theme of picking up all of the time because of the failure to do things properly. I do not mean to put Mr. Griffin on the spot.

Mr. Mark Griffin:

The Deputy is not putting me on the spot.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am asking about Aughinish in particular.

Mr. Mark Griffin:

We will come back to the Deputy on that. We will see what we can provide in terms of a briefing.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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My understanding at the moment is that the taxpayer will not be caught for the clean-up because there are sufficient protocols-----

Mr. Mark Griffin:

Exactly.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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-----and procedures in place to ensure that. That is what Mr. Griffin is telling me, subject to clarification.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I will finish up on Avoca and Silvermines. The Avoca mine site is mentioned on page 13 of the appropriation account. The last line of the first paragraphs states "It is now proposed to build on the original feasibility study and develop an overall remediation project plan for the site during 2018." Has that been done?

Mr. Mark Griffin:

I do not know off the top of my head.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Perhaps Mr. Griffin can come back and tell us if it has been done and, if so, the cost of the remediation plan and the time it will take.

Mr. Mark Griffin:

It now looks as if the development of the remediation plan will move into 2019. The cost-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Why is it moving into 2019?

Mr. Mark Griffin:

I surmise that other things arose during the course of the year. In fact, the individual involved would have been distracted for a substantial period over October and November due to the collapse of the site in Monaghan.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. Griffin will have to come back to me in this regard. There was to be a remediation plan in 2018. We relied on that. It is not happening now. When is it going to happen?

Mr. Mark Griffin:

That will be the bigger issue. We have it pencilled in for 2019. The bigger issue for us is the budget. The figure we have for the full clean-up is €50 million.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How much?

Mr. Mark Griffin:

Some €50 million.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is the total cost of the clean-up of Avoca mines?

Mr. Mark Griffin:

Yes. It is an earlier cost that may require substantial revision based on-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Up or down?

Mr. Mark Griffin:

I do not know.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It was €50 million for Avoca mines alone.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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For how long were the mines run?

Mr. Mark Griffin:

As I understand it, mining at Avoca dates back to the 18th century. We have done a substantial amount of work with the €3 million available to us to make the site safe.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Are there health implications arising from it?

Mr. Mark Griffin:

No. We are satisfied that the health and safety works required to make the site safe have been done on foot of the €3 million investment we have made.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Department will come back with the details of the cost of €50 million.

Mr. Mark Griffin:

We will come back on the remediation plan and the estimate.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Department was to acquire a site at the Silvermines.

Mr. Mark Griffin:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has the it been acquired?

Mr. Mark Griffin:

No. The negotiations are still ongoing. They are the works done at the Gortmore tailing facility. Negotiations have been ongoing with the landowner to try to come to an appropriate resolution that will work both for her and us, but-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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When does the Department expect the negotiations to be concluded?

Mr. Mark Griffin:

We had expected them to conclude on several occasions, but-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What are the implications of not concluding them?

Mr. Mark Griffin:

There is a concern about the works undertaken. The tailing site was grassed over and there were horses grazing on it. The implications of material being kicked up and disturbed were a source of concern. We continue to monitor the position.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What is the cost to date of the works done at the Silvermines?

Mr. Mark Griffin:

They have cost just over €11 million.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I welcome Mr. Griffin. I want to start with broadband provision. A number of my colleagues have raised issues and I have listened patiently to the responses. I imagine that the witnesses are aware of the perception, even if they do not agree with it, that it has turned into a bit of a mess. The matter is very complex and convoluted in terms of the companies involved in the various processes, but on the face of it, for some, it seems to be a bit of a mess. It was also the perception because a Minister had resigned. I am not saying whether that was right or wrong, but obviously it added to the complexity, problems and perception. There was a perception that the process might have been contaminated. Of course, I am not saying that is the case or that the witnesses would agree with it because I am just talking about perceptions. There is a perception problem and it all seems to be a bit of a mess. Those for whom I have most concern are the people living in rural Ireland who want connectivity. I have heard my party leader ask time and again why it cannot be done. Why are we talking about this issue over and over again without delivery? There is real frustration in that regard.

I have very straightforward questions and want the witnesses to help me to understand the process and challenge me on the perception because, unfortunately, it is one I share partially. Perhaps they might help me as the meeting progresses and I put my questions. When was the national broadband plan first put in place and how many households was it envisaged would form part of it?

Mr. Mark Griffin:

The tender process started in 2016. Assuming that the contract is awarded, it will go to a preferred bidder in the next few weeks. The intervention area covers 542,000 households.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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At one point was it greater than that figure and in the region of 800,000 households?

Mr. Mark Griffin:

It was.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That is what I asked. I am talking about the origins of the process and nothing else. The figure was 800,000, from which 300,000 households were taken as part of a separate solution. Will Mr. Griffin talk us through what happened

Mr. Mark Griffin:

There was a commercial proposal. The State can only intervene where there is market failure and no commercial operator prepared to provide services. In 2016 the proposal was submitted to the Department by Eir that it would provide commercial services for an additional 300,000 households. The Department-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Were they the households that were more commercially viable?

Mr. Mark Griffin:

If the Deputy looks at the map, he will see that effectively they were on spurs from roads from towns and villages and so on. Therefore, it is probably a reasonable description that they were the houses that were more commercially viable. A proposal was made to the Department by Eir to put the 300,000 households on the map, thus reducing the overall scale of the intervention area. We had extensive discussions with Eir on its commitment to do so and with the European Commission on the latitude available to the Government not to accept the 300,000 households as part of a separate deployment measure. The clear response we received from the European Commission was that under state aid rules, where there was a commitment agreement in place, with clear targets and deliverable outcomes and so on, the option was not available to the State to decline it.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I might perhaps come at it from a different philosophical and ideological viewpoint in that I do not think the State should intervene only when the market fails. It could have intervened much more robustly. Perhaps it is because we left the market to deal with the issue for too long that we are in this mess. Notwithstanding that, arguably the 300,000 households that were more commercially viable were taken from the 800,000. Did that leave the tendering process for the remaining 542,000 households more complicated and less attractive?

Mr. Mark Griffin:

To bidders.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Yes.

Mr. Mark Griffin:

That is something the Deputy might put to the bidders when they come before the committee-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I am putting it to Mr. Griffin as somebody who-----

Mr. Mark Griffin:

-----but it is a reasonable conclusion to draw.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I want to correct something. Mr. Griffin has referred to other potential bidders coming before the committee. We have not decided to invite them.

Mr. Mark Griffin:

I am sorry; I read it in the newspaper.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It has been mentioned, but we have not made a formal decision. Mr. Griffin is right to mention it, but I point this out in case anyone thinks we have a date set. We will probably decide next week.

Mr. Mark Griffin:

I apologise. It is a reasonable conclusion to draw.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I am not saying Mr. Griffin's responses are tetchy, but I am saying we have put these questions because the Department is writing a cheque on behalf taxpayers and we are here to make sure that in writing it, the right decisions are being made and that we are more focused on the process. When I am looking at it, I can see that we are left with a tendering process which is difficult and mired in controversy. The more valuable and lucrative households were taken from the figure, perhaps for genuine reasons, but it has made it all the more difficult. How many bidders are left in the process?

Mr. Mark Griffin:

One.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Exactly. How many times has that consortium changed its composition?

Mr. Mark Griffin:

I do not have the answer to that question.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Give us a little of the history because that is also part of the problem. The company has changed composition and ownership many times. It is almost unrecognisable from its original manifestation.

Mr. Mark Griffin:

I will answer the question in general terms. I hope the Deputy will forgive me for not giving him a direct answer because we are still in the procurement process.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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In general terms will do.

Mr. Mark Griffin:

The important part is that the lead in the consortium which has been with it from the start remains at this stage. There is a process that is gone through every time there is a proposal to change a consortium where it has to demonstrate the necessary economic and financial standing-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Was SSE not the main financial backer of the consortium?

Mr. Mark Griffin:

No, not to the best of my knowledge. It was a member of the consortium at one point.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is it gone?

Mr. Mark Griffin:

SSE is gone. I have no idea what equity it was putting into it.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The Department would certainly accept that it has changed.

Mr. Mark Griffin:

Absolutely.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is that a problem? Does Mr. Griffin see it as an issue?

Mr. Mark Griffin:

No.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is Mr. Griffin concerned that we are left with only one bidder in the process?

Mr. Mark Griffin:

It would always be preferable to have more than one bidder, but it is not unusual in large infrastructural projects. I cited the case of broadband roll-out in the United Kingdom where there was only one final bidder, the BT Group which was the incumbent. The last remaining bidder pulled out before submitting a final tender.

We must be able to demonstrate that what comes out of this process stands up on technical grounds-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I understand all of that and I do not want to cut Mr. Griffin short.

Mr. Mark Griffin:

-----and to be able to demonstrate value for money.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I understand that but my point still holds. We have had to examine how the tender process works in respect of many different organisations. NAMA was a recent one where we looked at tendering processes for large projects. My point is that if there is insufficient competitive tension, it is not the ideal solution so having one bidder - one consortium - in the process is not healthy. Did we arrive at that position because of all of the other decisions that were made, including the taking out of the 300,000 homes and businesses from the original plan, which possibly made it less viable for other bidders? I am trying to understand the Department's perspective as to why we were left with only bidder. I appreciate that it is complex in terms of the companies that can do the job. Could Mr. Griffin enlighten me as to why we arrived at this point?

Mr. Mark Griffin:

When SIRO withdrew, it was still very supportive of the Government's ambition. However, it could not develop a competitive business case to justify continued participation in the national broadband plan. I cannot say whether that was related to the 300,000 homes and businesses or other things. Eir withdrew in January 2017. It raised issues around the complexity of the procurement process for which I make no apologies because when we are talking about the State providing a very substantial subsidy, we must make sure our procurement process is robust and the things we are asking commercial companies to do stand up in terms of the obligation we are imposing on them over a 25-year period. Eir indicated at the time that it would continue to support the national broadband plan. We are seeing this in practice in terms of the engagement with the final bidder in terms of the make ready programme. The question that arises for us in developing a recommendation one way or the other for the Minister and Government is whether it has the technical capacity, whether the business plan stands up, whether it is commercial and whether the bidder will live up to all the contractual obligations that will be imposed.

Regarding competitive tension, it is probably worth mentioning that part of the competitive dialogue process is what it is called the ISDA S phase, which is the invitation to submit detailed submissions. At that point, we had received two submissions - one from Eir and one from the Granahan McCourt consortium - so we had both of those to benchmark as part of the assessment of value for money. We must then do a full detailed assessment of value for money. Many of the costs are regulated such as Eir duct and pole rentals.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Can I stop Mr. Griffin there? All of that information is very enlightening but reading between the lines in terms of what Mr. Griffin has already said, the Department has some general idea as to why it was reduced down to one bidder. It is because the contract is huge and the company would need to have the expertise to do it. In addition, it is possible that taking out the 300,000 homes and businesses played a part in it but the Department does not fully know. What I am hearing from Mr. Griffin is that it is what it is, we are left with one bidder and we are getting on with it.

Mr. Mark Griffin:

Absolutely.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Mr. Griffin said that the European Commission ruled in terms of the 300,000 homes and businesses. Can he provide the committee with the-----

Mr. Mark Griffin:

I will see what correspondence we can provide. There were several meetings involving the Commission, which made its view on that clear.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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What was the cost? When the national broadband plan was conceived, the figure was 800,000 homes and businesses. In 2016, the current tender process started for the 500,000 plus homes and businesses. What was the original cost for the 800,000 homes and businesses?

Mr. Mark Griffin:

I do not think we published any cost estimates. Indicative figures given at an earlier stage before procurement had started were somewhere between €355 million and €512 million but they were only indicative figures.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Why were they only indicative figures at that point?

Mr. Mark Griffin:

It was because it was an estimate.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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So that was for the full 800,000 homes and businesses at that time. When the Department was looking at the 500,000 plus homes and businesses and the current tender in 2016, what was the estimated cost of that at the time?

Mr. Mark Griffin:

I do not think we published any estimated costs at that stage.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Why not? So the Department had no idea how much it was going to cost.

Mr. Mark Griffin:

I did not say we had no idea. I said we do not publish estimated costs.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is that because of commercial sensitivity?

Mr. Mark Griffin:

From our perspective, I do not think it would have been prudent to put a cost on-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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So the Department would have had a cost.

Mr. Mark Griffin:

We would have a cost-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Does the Department know how much it will cost at the moment.

Mr. Mark Griffin:

I do not have the final figures.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The Department does not yet have the final figures.

Mr. Mark Griffin:

I do not have them.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Mr. Griffin does not have them.

Mr. Mark Griffin:

I do not have them. I did not receive the tender.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Even at this point when-----

Mr. Mark Griffin:

The evaluation has not yet come to me.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That makes it very difficult for us. I can understand why Mr. Griffin might not be able to share it with us but for him to not have it at this point strikes me as odd.

Mr. Mark Griffin:

I have a good understanding of the range but-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is the figure of €3 billion that is being floated-----

Mr. Mark Griffin:

I am not going to comment one way or the other on costs.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Mr. Griffin cannot comment on costs. It goes back to what was said earlier about 5G - that there will be post-project reviews. I imagine that we will come back here at some point and evaluate this. I hope we will not be dealing with a special report from the Comptroller and Auditor General and we are taken back to this exchange when we asked about the costs at that time and were told we could not have that information. The Department has it. It has some indication of what it might be but we have no idea how much it will cost in the long run even though it is taxpayers' money. Mr. Griffin is nodding his head but I am frustrated as a taxpayer and as somebody who represents taxpayers because it is not an ideal situation for this committee to find itself in.

Mr. Mark Griffin:

I understand that fully.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I do not get that from Mr. Griffin's response but I will accept it nonetheless. He was asked earlier about the meetings that took place between the former Minister and Mr. McCourt. It would be unfair of me or anybody else to expect Mr. Griffin to speak for the former Minister because he cannot do so but Mr. Griffin is the person who signs the cheque for all of this. There is a perception, and I stress that it is only a perception, that the process is contaminated and that the report into this is a whitewash. Leaving aside this public perception and media or political commentary, many meetings took place between the former Minister and Mr. McCourt. It was put to Mr. Griffin earlier by Deputy MacSharry that it is reasonable for members of this committee to ask him as the person who ultimately signs the cheque, and he does not know or least we do not know how much he will sign for, whether it was appropriate for the former Minister to have had that level of contact with somebody so closely associated with the only bidder in the game, about which we spoke earlier. I put this question again to Mr. Griffin because I was not satisfied with the response. This committee deserves a response to that question. Mr. Griffin is the Secretary General and the buck stops with him. Surely when he saw the number of meetings that took place between the former Minister and Mr. McCourt, he would have formed an opinion. I am asking him to share that opinion with members of this committee.

Mr. Mark Griffin:

There were four dinners that were referenced in the report. In my view, it would have been preferable if the former Minister had been accompanied by an official. I do not accept Deputy Cullinane's view that this was a whitewash-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I did not say that was my view. Again, I do not want to put words in Mr. Griffin's mouth so I ask him not to put words in mine. I ask Mr. Griffin to bear with me for a moment because he has been a bit tetchy in some of his responses. We are putting questions genuinely. This is not funny.

Mr. Mark Griffin:

I have not been tetchy. The Deputy has not seen me when I am tetchy.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I could be wrong but I am giving Mr. Griffin my opinion. I have watched him interact with other members of the committee. We are putting reasonable questions and we expect reasonable responses. Mr. Griffin said it would have been preferable if the former Minister had been accompanied by officials but he was not accompanied by them. Can I surmise from this that Mr. Griffin believes it was wrong of the former Minister to meet Mr. McCourt four times without an official being present?

Mr. Mark Griffin:

It would have been better if the dinners had not happened.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Did it contaminate the process?

Mr. Mark Griffin:

No. Again, I am relying on what the independent process auditor has said, which is very clear on pages 16 and 18 of his report.

Those views have been accepted by the Minister and the Government. The record is unambiguous as to what he is saying. I am not going to deviate from that. I do not have a different opinion from what is set out in the report.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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There is a problem with the perception of either conflicts of interest or that we have a process now that people feel is a bit of a mess. We have a single bidder for whatever reason. We have already talked through that and ended up in that situation. A former Minister had several engagements and meetings with somebody closely associated with this single bidder that was left in the race. Notwithstanding whatever independent report gives its analysis, it is not just a perception here. It would have been preferable if the meetings not taken place. They did take place. It is reasonable for us to ask Mr. Griffin questions, which he has answered. It is reasonable even to go a step further and ask how he can say that the process has not been contaminated if we have had a large number of meetings - meeting after meeting without officials present, which Mr. Griffin says is not appropriate - between the former Minister, who ultimately would make the decision here, and somebody associated with the only bid. How can he say that the process was not in any way contaminated? How can we be assured that this is a genuine reflection on his part?

Mr. Mark Griffin:

I am assured by what is said in the Smyth report, the conclusions that he has drawn and the detailed analysis he has undertaken of the meetings. In the case of many the meetings, the Minister was accompanied and there were official records. Mr. Justice Smyth stated - I will not repeat the report because the Deputy has read it - at the end of the report: "I am 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."

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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This is based on what?

Mr. Mark Griffin:

This is based on the detailed analysis that he has undertaken-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Yes, but based on what? Am I to take it that this is based on evidence from the Minister and Mr. McCourt?

Mr. Mark Griffin:

That is a discussion that someone will have with Mr. Justice Smyth and I gather the joint Oireachtas committee will be having that conversation during the course of the afternoon.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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We will have to leave that issue there for the moment. Mr. Griffin has given his opinion, in fairness, which I accept. On-----

Mr. Mark Griffin:

Can I come back to the statement that the former Minister, Deputy Naughten, made in the Oireachtas the other night. He has been quite clear, and my experience of the man over the two and a half years I worked with him, is, he is straight as a die. He has said that the national broadband plan was not discussed at any of those dinners, nor was there any canvassing. I, on the basis of a very close working relationship with him over two and half years, would accept his word.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The problem with that is - I am not saying that I in any way disbelieve the former Minister, that is not the point - as Mr. Griffin very well knows, that when one puts oneself in a position where one has several engagements, several dinners and meetings with a bidder, when there is a live process under way, it is the perception that is the problem. We will never know what was or was not discussed. What we do know is that the perception is not good and not having officials present that can verify what was raised or not is the problem. We have had this before in other areas. Lessons should be learned, that is for sure. I am not in any way calling into question the character of the former Minister. I share Mr. Griffin's overall view of the former Minister; I have no problem with that whatsoever. I am thankful for Mr. Griffin's response and for his clarifying that point. I agree with his perception.

Mr. Mark Griffin:

I will make a final point on that which, again, is self-explanatory. The Minister is removed from the final evaluation process. As the former Minister said in his statement the other night, that evaluation process is being undertaken by the team in the Department. A recommendation will then go the Minister, Deputy Bruton.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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He is removed from the process because the Taoiseach made it impossible for him to stay in the process. Let us be frank about it.

Mr. Mark Griffin:

The Deputy is talking politics now and I am not prepared to do that.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I am talking reality.

My final question is on Enet. Mr. Griffin spoke earlier about the Irish Infrastructure Fund, IIF, having a share in Enet. Does it own it completely or what is the composition?

Mr. Mark Griffin:

The initial acquisition is a 78% share but it is moving to 100%, as I understand it. We are not party to the-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That is 100% shareholding.

Mr. Mark Griffin:

As I understand it.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I will come back later as others may want to come in and I have another set of questions on RTÉ and on a few other areas which I will come back to. I ask the Chairman to put me on the list and I thank Mr. Griffin for his responses.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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At this point only Deputy Aylward had indicated his intention to speak. At the end of his contribution, we will break not for a vote but for lunch, as we will have gone over three hours. We will have a second round immediately after lunch. We cannot go much longer than three hours, as it is not fair to people to be here for that duration.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My apologies as I was in the Dáil.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If Deputy Aylward finishes at 1.15 p.m., what time do the members wish to resume at? Is 2.15 p.m. okay for those who need the hour? Is that agreed? Agreed. We will resume at 2.15 p.m.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will start with broadband. Being a rural Deputy, broadband is of crucial importance to us. The last phone call I received before I came in here was from a businessman on the Carlow-Kilkenny border who has problems with his Internet and has no broadband. He got Eir to install broadband for him and it stopped working. He has been in touch with Eir for over three months and is waiting. I am aware it is it not Mr. Griffin's responsibility but I am just raising the importance of broadband and its roll-out to rural Ireland. There are 550,000 people out there waiting for broadband. I have a kind of half system of broadband at home that is not fast or good enough. This is the future of Ireland and we are at a big disadvantage in rural Ireland by not having broadband to compete with Dublin and other urban areas. I have people constantly contacting me to ask if they will have broadband if they come to live in Kilkenny. If they work from home, it is just not available. We are losing out badly in small villages and towns in rural Ireland. This is an opening comment to let Mr. Griffin know how serious the situation is.

Mr. Mark Griffin:

We understand that fully, Deputy. We want to move forward to a situation where something is put to Government that it is in a position to accept. If it is accepted, the next focus then is the roll-out and the deployment. Part of the bid process by the final bidder is setting a detailed deployment plan. We will share that. It is really important. I have family who live in rural Ireland as well. It is important that we can get boots on the ground, get this mobilised and delivered as quickly as we possibly can. I accept-----

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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This is as important as the electricity roll-out in the 1950s and 1960s was.

Mr. Mark Griffin:

I agree with the Deputy.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is that important to the business sector of rural Ireland.

How did this whole roll-out system start, where four to five consortia were bidding in the beginning and it all ended up with one? What happened, in Mr. Griffin's own words, that the companies like Eir etc. pulled out during the process and we ended up with just one? Can I get an explanation as a layperson as to why that happened? Where there is no competition I do not believe there is proper business acumen. One needs opposition and bidders against one another to get proper pricing and to make a proper contract award to the consortium, whenever it is handed out.

Mr. Mark Griffin:

We started out with a very open procurement process. Three organisations were shortlisted. SIRO - the Vodafone-ESB consortium, Eir and the Granahan McCourt-led consortium. As the dialogue progressed, in September 2017, SIRO wrote to the Department formally and said that it found it difficult to develop a competitive business case.

Deputy Cullinane effectively queried if that was linked to the Eir 300,000 being taken off the map. It may well have been but I cannot say that with absolute certainty. Eir decided in January 2017 to withdraw from the process. It was in the process-----

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did any of those companies give a reason?

Mr. Mark Griffin:

SIRO said that following a comprehensive review, it could not develop a competitive business case to justify continued participation in the national broadband plan bid process and therefore had decided to withdraw. That was the formal letter submitted to the Department at that point.

Eir withdrew in January 2017. At that stage, it was in the middle of a takeover process.

It said its decision to exit the NBP process was driven by a range of commercial, regulatory and governance issues. It referred to the complexity of the tender process. We make no apology for a complex tender process and document where there is so much State money to be invested. It had some other broader concerns about the regulatory and pricing regime that existed outside the NBP. We met with Eir on 23 January and asked it to reflect on its position. It wrote back to us again on 30 January setting that out. That is effectively the rationale that both of those entities put forward to us.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What was the problem with the regulatory and governance issue? Was it complicated? Were there too many criteria for people to come in?

Mr. Mark Griffin:

No. Some of the regulatory and governance issues they raised were broad issues outside the NBP process. We had extensive governance and delivery processes set out in our contract documentation. If we are providing a large amount of taxpayers' money to provide a scheme, we have to be absolutely sure they are capable of delivering, that they have the funding set aside to make the investment, that they meet all the deployment milestones, for example, the milestones for connection of premises, that there are demand stimulation mechanisms set out therein, arrangements for reporting to the Department and open book accounting. The list in our request is as long as my arm but we are absolutely determined that they were the right requirements to impose on any entity that would ultimately win the contract to do this.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Both of those bidders are indigenous, we know of them, they are big companies and they are always rolling out their business. Why would they not be capable of taking on this? Now we have enet, an American company, coming into Ireland to roll out the same project. Does it not beg questions that only one bidder is left? Is there something wrong that there is only one bidder?

Mr. Mark Griffin:

I do not have a problem with the process in which we have engaged and I will stand over that.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Does Mr. Griffin think one bidder is the right thing, the right start for the business?

Mr. Mark Griffin:

We would have preferred to have more than one bidder at the table at the final stage. It is not unusual in the case of some large infrastructure projects to have only one bidder at the table. For example, when the equivalent of our high speed broadband project was rolled out in the UK there was only one bidder at the table at the end, the incumbent, BT. At an earlier stage in the process, the invitation to make detailed submissions, we got two outline bids, one from Eir and one from the Granahan McCourt-led consortium. That indicates the ball park they were in. We will have to ensure when the process is being concluded that we are in a position to demonstrate the technical capacity, the business plan, the commercial health, financial standing and the ability of the company to roll out the network and to comply with the contractual provisions the State will put in place.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is why I asked about the financial plan and the cost efficiency. That is the important point. If there is only one bidder how will the Department be so sure? All sorts of figures are being bandied around. We heard first that it would cost the taxpayer €1 billion, now €3 billion or a higher figure is being mentioned. There is a big difference between €1 billion and €3 billion or maybe €4 billion. Are these just figures that are being thrown about, and the taxpayer will pay the bill? Will we have the witnesses in here next year or in two years' time talking about a waste of taxpayers' money on the cost? How can Mr. Griffin give us a guarantee that this will be cost efficient?

Mr. Mark Griffin:

As part of the process, before we submit anything to the Minister or the Government we have to clearly set out our assessment of how this represents value for money and to demonstrate that. There will be a range of contractual obligations inserted. There will be post-contract governance. We will have local and international benchmarks. Many of the costs that arise are regulated by ComReg, such as the Eir pole and duct costs. We will have an overview of the procurement processes that the lead bidder will be undertaking for some of the sub-contracted work.

There is open book accounting so that we can look at the accounts of the final bidder. We know there is a high level design in place. We will be able to look at the deeper design on a deployment area basis, which represents approximately 5,000 premises, and see the costs arising there. There are clawback mechanisms, what is in place, all that kind of stuff. The Deputy can rest assured that we are doing the absolute level of due diligence that will be required, not just of us but expected by the Minister and the Government before they get any proposals put to them.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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As a businessman myself, a farmer, I know that the best way to contract out a job is to put two or three bidders up there and get the best value for money for me, by putting it out to the market.

The Department has one consortium and it has given me assurances that it is considering it, but there is only one bidder, knowing there are no others against it, that the Department has no alternative, and it can get on with it and cream it if it wants to. I am not saying that will happen but these things can happen.

Mr. Mark Griffin:

We did seek bids and we got three bids. That is a fact. We did not go into the process to speak to only one entity. People dropped out of the process. We have to be able to demonstrate that the mechanisms available to us to show value for money in a single bidder situation stand up. That will be scrutinised very carefully as the process moves to conclusion.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Can Mr. Griffin comment on what I said about the newspaper reports that it is going from €1 billion to €3 billion? What kind of ballpark are we looking at here? I know Mr. Griffin cannot say it out straight but will it be €1 billion, €2 billion or €3 billion to roll out this scheme?

Mr. Mark Griffin:

I know it is frustrating but I cannot comment on it at this stage.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is a lot of money, €1 billion is a lot, not to mention €2 billion or €3 billion. Is Mr. Griffin happy in his skin in respect of contamination after the former Minister resigned – I will not go over that ground again because it has been already covered – that contamination has been covered properly, that the taxpayer can be assured that everything is being done with propriety, properly and above board and that there is no question mark about which we should know? Is Mr. Griffin happy to stand over that?

Mr. Mark Griffin:

I am absolutely happy to stand over that. We have an excellent team of people working in the Department on this, on the public and private sectors. There has been very strong governance within the Department. The Smyth report says what it says and that reassures me that the process is in a good place.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is Mr. Griffin happy with enet and that the structure of the consortium is above board? We hear different rumours from America. I said rumour, not facts.

Mr. Mark Griffin:

It has to go through a set of hoops all the way through as part of a pre-qualification process to demonstrate its technical and financial standing and all of that. Changes to consortia are not unusual and if there is a change in the make-up of a consortium it has to go through a process that is independent of me, of the Minister and come out the other side with a clean bill of health in terms of the criteria that were assessed.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will leave it at that.

Silvermines and Avoca are close to me, over the border in Tipperary, and I know about them. What is the problem with the Silvermines? That has been going on a long time and there seems to be many costs. There are questions marked here from the Comptroller and Auditor General and others. What is the situation with the Silvermines and Avoca?

Mr. Mark Griffin:

We have spent approximately €3 million capital moneys primarily in making safe the site at Avoca.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Who owns the site?

Mr. Mark Griffin:

The State owns the site.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Who owns the Silvermines site?

Mr. Mark Griffin:

The State owns the Silvermines site other than Gortmore, I think. I need to check that.

We spent approximately €3 million at Avoca where we have made safe the biggest risks. An updated plan is to be prepared. We hope to have it done by the end of the year. It will be completed during 2019. We will then need to look at the overall cost of remediation.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Mr. Griffin refers to making the site safe. What works are being carried out?

Mr. Mark Griffin:

There is a spoil heap at a place called Tigroney that has been addressed. Approximately 850 adits have been covered. There was a risk to the Dublin-Rosslare railway line which has been made safe in conjunction with Irish Rail. They are the preliminary safety works which have been done. The bigger plan will be in preparation for 2019 and we will then need to look at the cost estimate. The figure that has been mooted, although it is somewhat historical, is approximately €50 million, but I do not know what the cost will be. We spent approximately €11 million at the Silvermines. All of the work has been done, except for the work to be done at Garryard tailings facility.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it safe now? Contamination was a big issue for local farmers.

Mr. Mark Griffin:

I understand the concern of local farmers which was related primarily to the Gortmore tailings facility. Work was done to cover the spoil. Horses had been put on it and left to graze there. There was concern that it would disturb the land and lead to dust blowing. Through the Office of the Chief State Solicitor, CSSO, we are in discussions with the landowners on a suitable arrangement. We have asked them to take the horses off the land. We are discussing an appropriate arrangement for the management or ownership of the land, but the discussions have not progressed as quickly as we would have hoped. We are having difficulty in seeking regular engagement and a final conclusion.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What long-term plans does the Department have for Silvermines and Avoca sites? What does it hope to end up with when it is all contained and rectified?

Mr. Mark Griffin:

I do not know. The plan for Avoca will cover that aspect. I know that there has been speculation about historical mine sites and making them into tourist attractions, but there is a lot of contamination which needs to be dealt with. With regard to the Silvermines, the first priority is to make all of the sites safe.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What acreage is involved?

Mr. Mark Griffin:

I do not know.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Please provide us with a note on both sites to give an idea of their scale. We do not know if we are talking about 10 ha or 500 ha.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I was going to ask. Is it a big site?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin can send us a note on the matter.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I come from an area in which there are three rivers which contain salmon, in particular. I see a cost of €29 million under the heading of natural resources for Inland Fisheries Ireland. To what does that money go? Is it for the preservation of salmon?

Mr. Mark Griffin:

A big chunk of it will go on pay. There are over 300 staff in Inland Fisheries Ireland. Another chunk of the money will go on capital works. In the last couple of years Inland Fisheries Ireland published a national strategy for angling development, for which we are committing funding. There are also pension costs and non-pay expenses related to consultancy work Inland Fisheries Ireland may need to do. That accounts for the the bulk of the money.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How much of the €29 million will go towards conservation?

Mr. Mark Griffin:

That figure does not include Inland Fisheries Ireland's own resources. A significant amount of money from its own resources is used. I will come back to the Deputy about the matter. There is good material available, albeit very long, on what it is doing in the area of conservation. Some €3 million is for capital works under the national strategy for angling development. Inland Fisheries Ireland spends a lot of money in carrying out inspections and on monitoring from a combination of the money we provide and its own resources. I will come back to the committee with a more detailed note.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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On environmental waste, I was a county councillor perhaps for 20 years. All local authorities had landfill sites, or dumps, as we used to call them. How safe are the landfill sites that were previously available in every county? At one time almost every municipal area had them. Are they being monitored years after being filled in? What security is provided to ensure there is no contamination from them if they were not done to perfection? They exist because we did not know enough about the environment at the time and in many cases local authorities were not up to scratch.

Mr. Mark Griffin:

A lot of work has been done in the past few years following the closure of historical landfill sites. There are only four or five operational landfill sites in the State now. There was a case at the European Court of Justice, known as Case C-494, which resulted in the State being required to remediate many historical landfill sites, on which we spent approximately €160 million. We wrote to the committee at the end of November, setting out where we were on what are called priority 1 sites. Many such sites are going through various layers of assessment, using a methodology agreed between the Environmental Protection Agency and the local authorities.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Are they to be found in every county or only in certain counties?

Mr. Mark Griffin:

They are spread across the country. I am checking to see if there is any in County Kilkenny.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am sure there are a few.

Mr. Mark Griffin:

I am sure there are, but they are not among the 22 being advanced. The risk is categorised as A, B or C. Assessments are then made by the local authorities, with the main focus being on category A landfill sites. The programme of works emerges from the assessments. In most cases, we fund them from the centre. In 2018 we had €11 million set aside and will spend close to €10 million. The figure was lower last year, at approximately €5.5 million. We have a very good programme in place, with resources assigned to the Environmental Protection Agency. Resources will be assigned before the end of the year in the regional waste authorities. We have had training programmes for local authority staff. There is a comprehensive and complex programme of works to be rolled out.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What remedial works are involved? Category A is obviously the most dangerous.

Mr. Mark Griffin:

Some of it may be as simple as taking away the most contaminated waste, making sure it is treated properly and putting in a soil berm or a plastic underlay and landscaping it. The treatment required is defined by a comprehensive assessment process that has been agreed to by the Environmental Protection Agency. If extensive works are required, they will be done. No corners will be cut.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Would it mean removing some of the rubbish and incinerating it, for example, in Dublin? Is that involved?

Mr. Mark Griffin:

I cannot say for definite, but I could not rule it out as an option. When one is in the business of removing waste, osts ramp up considerably. One of the biggest costs in waste disposal is transport. The specific issue about which the Deputy is concerned is being addressed. What is required to be done will be funded. The State will make good the historical landfill sites that need attention.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am going over time.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We have a few seconds left. I thank the Deputy for mentioning Inland Fisheries Ireland. It does good work on the River Nore and in the village in which I live. Is it a commercial or a non-commercial State body?

Mr. Seamus McCarthy:

As I audit it-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is non-commercial. Mr. Griffin has mentioned that it has its own sources of income, in addition to the sum of €30 million.

Mr. Mark Griffin:

From permits, licences and so on.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They cannot be major.

Mr. Mark Griffin:

They are not major and they are declining.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Therefore, most of its income comes from-----

Mr. Seamus McCarthy:

A State grant.

Mr. Mark Griffin:

It was approximately €3 million in 2017. We have seen a downward trend.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Therefore, 90% of its income comes from a grant. I ask Mr. Griffin to send a briefing or information note to the committee.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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This is an important grouping.

Mr. Mark Griffin:

Other matters such as the eel support scheme may be of interest the committee. I will be happy to provide the information.

Sitting suspended at 1.20 p.m. and resumed at 2.25 p.m.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are continuing our discussion with the officials from the Department of Communications, Climate Action and Environment. The first round of speakers made their contributions before the break and I have a few other questions to ask. We are joined for the afternoon session by Mr. James Ryan from the Department of Defence and from An Garda Síochána by Mr. Michael O'Sullivan, assistant commissioner, security and intelligence, and Mr. Michael Gubbins, Garda National Cyber Crime Bureau. We will be dealing with the issue of cyber security during the course of the meeting, although not yet. I advise the new witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. While we expect witnesses to answer questions put by members of the committee clearly and with candour, they can and should expect to be treated fairly and with respect and consideration at all times in accordance with the witness protocol.

To return to Mr. Griffin, there are a few issues I wish to raise. I will return to broadband provision, given that it is the topic of the moment, even though there are other issues arising from the full Vote before us. I have three questions about the appropriation account for the purposes of clarification. Before the break, we touched on inland fisheries which are dealt with on page 6. Page 13 has a heading which refers to contingent liabilities. It states there is potential for financial liabilities to arise in 2018 and subsequent years, depending on the outcome of current pending and possible future EU and other legal actions. What current cases are referred to? Is there a list or schedule? Obviously, Mr. Griffin cannot talk about future cases that have not yet arisen, but perhaps he might tell the committee about current and pending cases.

Mr. Mark Griffin:

Unfortunately, the Department has to deal with a range of court cases at any particular time in which it is either a defendant or a notice party. Many of them fall into the category of judicial reviews of various decisions made and in certain circumstances could lead to a liability on the State. We do not have EU infringement cases likely to give rise to a penalty in the short term, but given the level of activity on issues being negotiated at EU level and agreed, directives or regulations which fall to be transposed on certain occasions and EU measures to be implemented, it is something on which we always have to keep a close eye. We do this as part of the work of the management board and aim to deliver on the objectives of the directive or regulations in transposition or implementation. We aim to ensure risks do not materialise. It is a standard provision in the appropriation account, but there is nothing pending in terms of an immediate threat for the Department.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. McCarthy, is that paragraph included in every appropriation account?

Mr. Seamus McCarthy:

It might be more explicit in certain circumstances, but it is a typical presentation.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. McCarthy is saying it is precautionary.

Mr. Seamus McCarthy:

Exactly. You will recall that there is a Note 6 in most Votes in which details of settlements made in a year are given. However, there are no expenses recorded in this account in Vote 29.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Page 27 touches on broadband. I will come back to the issue separately, but it is mentioned in the appropriation account. It states the Minister has a beneficial interest in the metropolitan area networks, the construction of which was funded jointly with certain local authorities and the European Regional Development Fund.

Mr. Griffin referred to a beneficial interest. What is the extent of that?

Mr. Mark Griffin:

He is the beneficial owner of the metropolitan area networks.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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So he is the full 100%.

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is the question I wanted answered. When I saw “a beneficial interest”, I wondered whether somebody else had another beneficial interest.

We have considered the Department of Communications, Climate Action and Environment's annual report for 2017. There are a few issues in the report that I want to touch on. It is in the briefing note. The witness mentioned the emergency call answering service, ECAS. It covers the Garda, the National Ambulance Service and the Coast Guard.

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does it cover Dublin as well as the regions?

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does it cover Dublin Fire Brigade?

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What are the problems that Mr. Griffin is aware of? I am not highlighting anything. What would be an issue of concern that Mr. Griffin might have?

Mr. Mark Griffin:

If one looks at the ECAS and the performance indicators that are set down for it in terms of availability of time, contingency systems and response times to calls, one notes it is hitting all of them, and it is hitting all of them very well. We re-tendered the contract in the last couple of years. BT, which was the provider of the service prior to the re-tender, won the re-tender, so that is now being put in place. We have introduced a number of innovations. eCall is a new service provided where there is an accident in a car. If an individual is capable of contacting the emergency services, he or she can make a call himself or herself or the car can do it. That technology exists. We have also introduced an automatic location service, AML---

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let us go step by step, starting with the cars. We are into cyber-security and everything else. Could Mr. Griffin tell me about the car making the phone call? Obviously, it involves new cars.

Mr. Mark Griffin:

A lot of the car manufacturers now have eCall. If there is an accident, the individual concerned transmits a message to the emergency call answering service or the car can automatically do it. That service has been introduced in the past couple of years. There is a separate service called AML

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How many cars in Ireland would have eCall?

Mr. Mark Griffin:

I would not know the number off the top of my head but I believe we can get it for the Chairman.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is a new service. Could we be sent the models of cars with the service?

Mr. Mark Griffin:

AML is another automatic location service provided for on Android and Apple phones. If an individual is incapacitated, a message can go from the system-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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From the handset.

Mr. Mark Griffin:

-----which will give the GPS location. In fact, we had the emergency services in speaking to the Department yesterday. Fifty-five percent of the calls to ambulances last weekend were generated through the AML technology. It is really beneficial.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Could Mr. Griffin talk us through that? When somebody in a house who is not well makes a call-----

Mr. Mark Griffin:

The geolocations-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The emergency call service, through geolocation, can know where the person is.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is there a data protection issue or privacy issue?

Mr. Mark Griffin:

I do not know. I would imagine all that would have been resolved as part of the implementation. I can check that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If a person calls, it is assumed he or she is giving consent to the emergency services to come out and find them.

Mr. Mark Griffin:

Exactly.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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An easy answer to that one.

Mr. Mark Griffin:

The third piece in terms of making the service more functional is the integration of Eircode postcodes. That is done already in the National Ambulance Service and is now being rolled out to the Garda for when it is updating its command and control systems over the next couple of years.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In other words, a call goes in and, since the location of the phone will be known, the ambulance can be given the postcode.

Mr. Mark Griffin:

They can give the postcode themselves. We understand that is being used quite extensively in rural areas.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How does that service compare with that in the UK or other states?

Mr. Mark Griffin:

It is far ahead, from our understanding.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Whose bright idea was all this?

Mr. Mark Griffin:

The postcodes-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I know about the postcodes; I am referring to the phone recognition.

Mr. Mark Griffin:

I actually do not know about the AML technology. eCall is an EU initiative, as I understand it. The AML-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will ask the Department to send us an information note. Obviously, it is a big issue. There was a meeting on it last week. It means the Garda can almost know where everybody is in the country if they are linked into the system, just by virtue of having a mobile phone.

Mr. Mark Griffin:

It has been used for emergency services purposes, not for other purposes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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A small step. That is another day's work.

Mr. Mark Griffin:

A positive step.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I did not know the system was in place.

Mr. Mark Griffin:

While we are on the subject of the ECAS, a number of issues were raised in the report of the Comptroller and Auditor General a couple of years back on the need to publish an annual report, the need to make sure the liaison committee and emergency service groups meet regularly and all of that. That is being done. We have delivered on all the obligations in the Comptroller and Auditor General's report.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is it the Department that funds the system? Who funds the implementation of the software for this new system?

Mr. Mark Griffin:

For every call that is made to the emergency call handling system, there is a call-handling fee, and that funds the service.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is that paid by the operators?

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is part of the licence agreement that they will contribute to the emergency service.

Mr. Mark Griffin:

And that price is regulated by ComReg.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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By ComReg. People in a car accident are often asked when they make a call whether they want an ambulance, the gardaí or the Coast Guard. Sometimes a person might want two. What actually happens? One might want the Garda if there is a pile-up. One might want an ambulance if somebody is hurt. The service is trained not to help one answer that question. It asks the caller to tell it.

Mr. Mark Griffin:

The service will reroute the call. There is a brief conversation. The time taken to reroute to the appropriate service is very good. I refer to all the KPIs. A judgment call is made by the receiver on whether the Garda or National Ambulance Service should be contacted, or whether an additional service is required to go to the scene.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask that we be sent a note. That is very positive. Not everything here is always positive. On the other side, sometimes it is positive information that Departments can put out.

The report refers to the high-level objectives on the environment. Illegal dumping, household waste and collection compliance are mentioned, in addition to the matter of brown bin roll-out. What is the position on rolling out brown bins?

Mr. Mark Griffin:

I will come back to the Chairman on that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin will send us a note on that. What is the position on paying by weight? I am just asking for information.

Mr. Mark Griffin:

On the pay by weight issue, we had indicated that, in the 12-month period between autumn 2017 and autumn 2018, the incentivised pricing, because it is not all pay by weight, would be rolled out. That has happened.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Where? How many locations?

Mr. Mark Griffin:

Right across the country.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is it incentivised? I have not heard about it and I pay-----

Mr. Mark Griffin:

It can be pay by weight, pay by lift or a combination of different systems.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I have an annual fee.

Mr. Mark Griffin:

An annual fee plus-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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No. Maybe it will expire next year.

Mr. Mark Griffin:

I will make a note of that. It depends on when the Chairman's contract is up.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Next July.

Mr. Mark Griffin:

Some people may be caught. All the contracts that-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am with AES, which is part of Bord na Móna. It is one of the biggest outfits.

Mr. Mark Griffin:

Absolutely. All the contracts for renewal between August 2017 and August 2018 should have moved on to the incentivised pricing. I will make a note of that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Could Mr. Griffin talk to me about recycling? Where does everything go that goes into what we call a blue bin, or what others call the recycling bin? Do we recycle all the material in Ireland?

Mr. Mark Griffin:

Yes, we are hitting all our targets.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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A lot of the material used to be exported.

Mr. Mark Griffin:

Sorry, a lot is still being exported. Export markets are an important part of the overall resource available for recycling. That is still happening. There is still significant exportation for the purpose of recycling.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Other than the specialist items that might have to be exported, such as asbestos, why is Ireland not self-sufficient when it comes to our own recycling?

Mr. Mark Griffin:

We need to start moving into that space. It would be preferable if capacity was developed within the State because, while it is not inevitable, one sees what is happening internationally, especially the intention last year by the Chinese market to shut down and not take in any more waste, and significant problems are being presented. There are recycling facilities on the EU mainland but it is something we probably need to look at closely. We have given a commitment to review our waste policy during 2019. While there are a number of waste recycling facilities around the State the availability of waste recycling capacity, the new obligations that arise from the circular economy package, which put very significant additional requirements onto member states with regard to packaging targets that have to be met, and the abolition of single use plastics will all have to be factored into the new and very detailed waste management policy. We are hitting all of the current targets for recycling and reuse, be it plastic, batteries or electronic waste.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are meeting those targets. Mr. Griffin said the Department will introduce a new or updated policy in 2019.

Mr. Mark Griffin:

This was something we had intended to do anyway. A review was undertaken by the Competition and Consumer Protection Commission on foot of a Dáil motion. That has been completed. The review said that, in due course, regulation of the sector will probably be required. They reinforced to us the need to build the data capacity within the system and the need for the Department to undertake a fundamental review of its 2012 waste policy. This review will be done in 2019 and it will inform a lot of the thinking around regulation and where we need to go in terms of more recycling.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If that review is to be published next year work must be well under way or is it to be just a desktop exercise?

Mr. Mark Griffin:

No, we will consult widely, as we do in all of our policy development.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Had Mr. Griffin mentioned earlier that there are only four landfills in the State currently?

Mr. Mark Griffin:

There are four or five.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Where are they and what is their capacity and the life expectancy?

Mr. Mark Griffin:

One is Drehed, one is in Ballynagran-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Please run them by me slowly. Where is that one?

Mr. Mark Griffin:

Drehed is in Kildare.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Kildare.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I should know that. Does Mr. Griffin have the capacity and life expectancy for these four or five sites?

Mr. Mark Griffin:

Drehed in Kildare-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the capacity and the life expectancy of that site?

Mr. Mark Griffin:

I do not have that off the top of my head but I will get it for the committee. There is one in Knockharley in Meath and one in Ballynagran in Wicklow.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is three.

Mr. Mark Griffin:

There is also a site at Kilconnell in Galway.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is there no landfill in Munster?

Mr. Mark Griffin:

There is no open landfill in Munster.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Those four sites take the landfill. Has Mr. Griffin any idea of the volume or tonnage that goes to those sites? If Mr. Griffin does not have the information today he can forward it on the committee.

Mr. Mark Griffin:

I will send it on. In addition to those sites we have the incinerator at Poolbeg, which takes in some 600,000 tonnes per year.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Right. I am coming to that. Can Mr. Griffin give the breakdown between recycling, landfill and incineration? What are the current figures for this year? Mr. Griffin must know, approximately, where we will be this year. What is the percentage of landfill, recycling and incineration? When we were on local authority councils these targets were drummed into us as part of regional plans.

Mr. Mark Griffin:

I do not have those figures available but I will get them for the members.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is there nobody here with Mr. Griffin who can give these figures? I am looking at the annual report and the high level targets. Is nobody from that section here?

Mr. Mark Griffin:

They are in the other committee.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Fine. I acknowledged that before we started, so that is fair enough. Mr. Griffin will forward those figures on to us.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Given that there are only four open and active landfill sites in the State, is there any need for regional waste plans? I was in one in the midlands, and I am sure there is one for the west. Are they still there or are they meaningless? If there is a national policy what is the point of people in the Munster group of local authorities having a regional plan if there is no incineration or landfill facilities in their region? We are really talking about one national policy at this stage. Are these plans still going through local authorities?

Mr. Mark Griffin:

Yes. The plans are still there and they serve a purpose in setting out what is the existing situation in each regional area, at what stage is the regional progress towards targets and the consideration of available infrastructure-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Could the Environmental Protection Agency not take on that role instead of 31 local authorities employing all the consultants to sell the same plan to different local authorities?

Mr. Mark Griffin:

That would be a national plan.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes. People might not agree with me. Years ago each region had all of the facilities, but now it is just the one national incinerator currently.

Mr. Mark Griffin:

We have Poolbeg and the four other landfill sites, but that is not to say that at some stage these landfill sites will not reach the end of their natural lives-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Fine, and that is a national issue.

Mr. Mark Griffin:

There may be a need for capacity in other areas. I take the Chairman's point. When one considers the scale of the market and the level of landfill capacity that is there and what is needed, by 2030 - if I have the figure right - we will only be allowed to divert 10% of our municipal solid waste to landfill. We need to focus much more on reuse and recycling.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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And of course we need a breakdown by local authority base, but there is no region in the State that is sustainable in-----

Mr. Mark Griffin:

In its own right,

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In its own region, because none of them has access to what is required. That is what I am coming at. Some 20 years ago everybody spoke about incinerators, landfills and recycling.

Mr. Mark Griffin:

We have gone from more than 80 landfills down to four.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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From the era when regional plans started, time has passed them out. The island of Ireland, or whatever way one wants to call it, still exports some of its recyclable materials. Even as a State we are not fully sustainable. The first objective should be to get the State into a fully sustainable capacity when it comes to waste, and then - possibly - to break it down by region. It is probably more of a personal view but Mr. Griffin follows my logic.

Mr. Mark Griffin:

It is certainly a view we are considering in the context of the review to be undertaken. We want to hear all the voices on this issue.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Send the committee a note when the consultations are happening and we might reply at that stage.

A letter came in from the Department for this meeting which is an update on the historic landfill remedial sites. Progress to date is reported on 15 category A sites. I will not go through it in detail but perhaps Mr. Griffin will talk members through that correspondence because the issues around landfill remediation sites have cropped up at this committee a couple of times previously.

Mr. Mark Griffin:

At a committee meeting last year we discussed where we were in dealing with the legacy landfills in the State. I believe the issue was raised by Deputy Connolly. At the time I said that right across the regional waste management plans there were some 71 sites that were identified as category A, which are high risk sites. The correspondence for this meeting sets out where we are with the sites that have progressed through a process. The sites are categorised as A, B and C. A is high risk and B and C are lower risk. The process that is needed to determine what is required for the remediation of the sites is set out in a tiered hierarchy. The basic tier one investigation may conclude that minimal or no further work is required and that the site is not a high risk. Once we have gone through a tier one investigation and the conclusion is for a more a more detailed analysis, then a tier two and tier three assessment is done.

The output of that process is certification of authorisation from the EPA and this sets out a work programme that is to be undertaken in each of the sites. That work programme is funded by the State. The committee will see from Table 1-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It looks as if next year the Department will be undertaking a tier 2 or tier 3 assessment. No work will be carried out there next year.

Mr. Mark Griffin:

Not on those 15 because it takes time. The committee will see others that are further progressed, on the second page, where they have moved beyond the tier 2 and tier 3 and now are in the process of having the certification of authorisation being assessed by the EPA. Once that is approved, one can move to works. The committee will see, in Table 2, a smaller number of sites where the certification of authorisation, COA, is under consideration by the EPA with remediation works programme for 2019. Then the committee will see, in Table 3, a number where the COA has issued and the works are planned or have commenced and then another suite of them, in Table 4, where works have been undertaken and a spend of €17.8 million made on them. That is the process.

We have a distance to go in terms of dealing with all of them. We are more comfortable than we would have been this time last year when I came before the committee because at that stage, we had not fully scoped out the tools that would be required to do that work. We have a resource now, in the EPA. We are just finalising the appointment of a resource in the three regional waste authorities which will be focused exclusively on dealing with this particular issue. We have trained up local authority staff. We have moved to a situation now where, of the €11 million budgeted in 2018 for landfill remediation, we will spend somewhere between €9.6 million and €10 million. It is good progress relative to 2017.

For the benefit of Deputy Connolly, one site which we spoke about last year was South Park. It had been classed as a high-risk site, category A, which, I think, caught the Deputy by surprise, but, in fact, the local authority has revisited that site, done a further assessment and is now seeking EPA approval to have that reclassified as a category C site - a low-risk site.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In what year will all that be done? Will it take a decade?

Mr. Mark Griffin:

I would not like to hazard a guess. What the committee can see now relative to the position we were in last year is we have a very clear methodology for dealing with this in terms of the investigation and analysis process. We have money that we are committing to it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is Mr. Griffin's estimate for 2019?

Mr. Mark Griffin:

I can say, in money terms, it is approximately €9 million to €10 million on landfill remediation.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is in line with this year's expenditure.

Mr. Mark Griffin:

In 2019, yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is quite a bit to go yet.

Mr. Mark Griffin:

Quite a bit to go.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It will take several years.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It will be on our agenda.

Mr. Mark Griffin:

I look forward to dealing with it next year.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Whether Mr. Griffin or any of us is here, the issue will be here for a while.

I have a slightly different question before I go on to two other topics. In May, we had an exchange with Ms Dee Forbes on RTÉ 2 and I asked when will we see RTÉ 2 plus one. There was quite an exchange of correspondence. The impression was given that RTÉ had applied for it. The Department came back and stated it had not been asked to approve it before it goes to the regulator. RTÉ responded stating that it was mentioned in its five year plan and it took that to mean it was a request. I did not read it that way. Has RTÉ 2 sought ministerial approval?

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Where is it?

Mr. Mark Griffin:

It is with the Minister.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How recent is that?

Ms Barbara Leeson:

It has recently gone up to him. I am not sure on what date.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In recent weeks?

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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From there, to whom does it go?

Ms Barbara Leeson:

It is through the Broadcasting Authority of Ireland, BAI.

Mr. Mark Griffin:

It has been through the BAI and the final stage in the approval process is the Minister.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Has Mr. Griffin any idea? Can somebody, between the Department and RTÉ, send us a note next week on when we can see RTÉ 2 plus one? I keep insisting RTÉ is losing revenue by not having the station. That is one of the reasons I raised it. They voiced much complaint about television licence evasion and here is an opportunity to raise money themselves. In my view, somebody was slow off the mark on it.

Before I return to broadband, what of mobile phone coverage? There are wonderful maps of plans of 100% mobile phone coverage. I do not have mobile phone coverage in my office. Nobody in my village has proper mobile phone coverage. I have tabled PQs all year. I have looked at the Department's reports. The Department is engaging with local authorities on a pilot basis to identify black spots. That job would take approximately one hour in every county. If one sat down at a public meeting of the local authority, there is no councillor who could not list them to Mr. Griffin off the top of his or her head. That job should have taken a day to complete. It could have been done as an agenda item on every local authority meeting to list the black spots but the Department set up a lengthy process. The Department appointed officers and they are conducting a pilot study identifying the black spots in 17 local authorities. That will inform the future plan to identify more black spots, and how one does it scientifically. All I will say is doing the job this way is not doing the public service any good. Who is the regulator for the mobile phones?

Mr. Mark Griffin:

ComReg.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The problem stems from ComReg specifying in some of its mobile phone licences quite a low level of coverage, nowhere near 100% of population or geographical area, and the operators are all meeting their licences. In terms of the main operators out there, 25 years after we started with mobile phones a large proportion of the country still contains many black spots. If the system cannot deliver mobile phone signals after a 25-year period, I have serious doubts about the same operators handling the delivery of broadband to all of rural Ireland. Where are we on mobile phone coverage?

The reason I refer to this is the Department devotes a page and a half of its annual report to the issue and it must be something with which Mr. Griffin is familiar. What is the Department doing? The position has not improved a millimetre because of the licences issued by ComReg. What can Mr. Griffin tell those who do not have a mobile phone signal?

Mr. Mark Griffin:

I might ask Ciarán Ó hÓbáin, the assistant secretary over the communications area, to talk about the work of the taskforce but also things we are doing around 5G connectivity strategy etc.

Mr. Ciarán Ó hÓbáin:

First, the Chairman finished up his comment and question by referencing broadband. The issue with broadband is that there is a recognition by the State that left to the market, one will not have it and there were will be large numbers of people left behind. What one has there is a recognition by the State that there has to be a subsidy to fill that gap.

In terms of the mobile phone market it is commercial players, through a licensing system, that are providing services. The frustration of people, particularly those in rural Ireland, with mobile coverage is something that both we and, obviously, every Member of the House, are familiar with.

The mobile phone and broadband taskforce has resulted in some positive initiatives but its impact is really something that one will see over a longer period of time. It has brought together the operators with the local authorities, the State bodies and the regulator. That, of itself, has been of real benefit in terms of removing some of the barriers that are there, in speeding up the roll-out of infrastructure by commercial players and in providing a greater level of consistency.

I hear what the Chairman says on the mapping of black spots. Certainly people such as the Chairman, who are in touch within a particular geographical area, could probably contribute a lot but what we took was a structured approach through the broadband officers through the local authorities to do that mapping exercise. Then there is a separate exercise.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is that completed?

Mr. Ciarán Ó hÓbáin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Has the Department the 31 local authority maps?

Mr. Ciarán Ó hÓbáin:

That has been completed.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If Mr. Ó hÓbain has that information he must know the percentage of coverage across the country?

Mr. Ciarán Ó hÓbáin:

The percentage varies across networks.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am asking for the national percentage by operator, for example.

Mr. Ciarán Ó hÓbáin:

I can come back to the committee on the percentage by operator in terms of their licences. The licences that ComReg provide have minimum thresholds in terms of what they have to deliver. Commercial providers can go beyond that. There is only one commercial provider that would claim to be over and above 90% in terms of population coverage, which is different to geographic coverage. The work on the black spots, and a separate piece of work which was done to help in decision making going forward to determine where coverage should be prioritised, was about more than where people live. It was also about where people gather and where they need mobile coverage. This work has been completed and it will feed into the work of ComReg going forward.

Separately, the Department is working to develop a 5G strategy in the context of a connectivity strategy. Earlier, we had a conversation around 4G-5G versus fibre and broadband. I am not an engineer, but in terms of my brief, I engage with industry, the communications regulator, the telecommunications companies and the people advising on the broadband plan. The point was made earlier, and referenced recently by the head of Vodafone Ireland during its recent 5G trial, about 5G being complementary to high speed broadband. This is about connectivity not only within one's house or place of work but outside one's door. The engineers will probably be upset with how I am explaining this but as I see it 5G and fibre are very fast but in terms of any expected roll-out of 5G the capacity and the amount of data are not comparable. 5G can expand out but this would require investment at a level that no commercial player would consider sensible - with more electronics en masse. The Secretary General mentioned earlier that in the recently published ComReg estimates it would cost €1.8 billion to achieve 99% plus population coverage with 5G. This would provide a level of service such that a person could watch Netflix, but not if all of his or her neighbours chose to watch Netflix at the same time. That is the difference between 5G and fibre. With fibre, one has a dedicated signal. The two can work together.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let us park broadband for now. Mobile phones have been around for 25 years. This conversation about black spots could and should have been had by the Department 15 years ago. Some of the black spots identified ten years ago are still black spots today. I would contend that the principal cause of the problem in regard to mobile phone coverage is the State in allowing companies granted licences to provide less than optimal levels of cover. If a licence specifies 75% cover, it is not the fault of the company if it only meets that requirement, rather it is the fault of the State for setting the coverage requirement at that level. If a licence granted today requires an operator to provide only 75% coverage then in 15 years' time there will be lots of people complaining about not having a service. The reason we do not have the coverage is because the licence does not require it. If the licence required 100% coverage, that is what we would get.

I would like information from the Department on the operators, their licensing arrangements and the percentage of coverage by population and geographically over the lifetime of their renewals. I believe that when these operators were first granted these licences the percentage of coverage required was higher than is the case in the more recently issued licences. It could have been 90% but was reduced in new iterations to 80%, 78% and so on. This enables operators to cherry pick areas geographically. This was not only aided and abetted by the State but forced on the people by the State by not holding operators to a higher standard from day one. I accept that the Department is on a learning curve as a result of this failure and that it does not want to be caught with the same problem with broadband but we will come to that in a minute. Twenty-five years on, there are far too many black spots. I ask that the Department send to the committee data on the percentage of the population geographically in black spots. It is all very fine to talk about plans, communications and understanding the problem. The dogs in the street could have done that a decade ago.

Mr. Mark Griffin:

As part of the process, we are working with the local authorities to identify infrastructure that can be used to site masts and repeaters. The purpose of the ComReg report published last Friday was to try to tease out some of these issues. In the move from 75% or 90% population coverage to almost 99.5% geographic coverage there are big trade-offs in terms of cost. The decisions that need to be made in terms of the next licensing round include the conditions to be required through a round. In other words, is it a population focus or a geographic focus and what are the costs involved?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I understand that. The point I am making is that there is a big difference between 75% coverage and 99.9% coverage, the latter being the ideal. We need to increase coverage from 75% to 85% or 90%. It is not okay to say just because we cannot meet 100% we cannot have a discussion on the issue. We need to increase the level of coverage. I ask that the Department forward to the committee data on the renewals. ComReg is supposed to audit a random number of the masts annually to ensure the level of coverage promised is being met. The Department might also send us the most recent audit reports in that regard.

Mr. Ciarán Ó hÓbáin:

We will take the Chairman's request to ComReg.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is that data not published?

Mr. Ciarán Ó hÓbáin:

It is published by ComReg.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask Mr. Ó hÓbáin to arrange for the most recent report to be sent to the committee.

Reference was made to a repeater, which enables a signal transmitted to a house to be repeated, and the recent licensing of repeaters. How many households have repeaters?

Mr. Mark Griffin:

I do not know.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Perhaps the witnesses will get that information for the committee. I read in the documentation provided this morning that licences for repeaters have been issued. I would like to know how many repeaters have been installed. I tried to get one from one of the biggest operators in the country but I was refused it.

Mr. Mark Griffin:

We will check it out.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am sure the witnesses are sensing a level of frustration from rural Deputies in regard to mobile phone coverage. Given the less than satisfactory delivery of mobile phone coverage and the fact that the same institutions are involved in the delivery of both, I am sure they understand our scepticism when it comes to the national broadband plan. When it comes to negotiating tenders and contracts, who sits at the table on behalf of the public? What is the level of financial and technical expertise of that group? Are they an equivalent match to those on the other side of the table?

Mr. Mark Griffin:

Our principal commercial adviser is KPMG at senior partner level. They have been involved in the process from day one, providing us with detailed financial and commercial advice. The Chairman also asked if they are as good as the people on the opposite side. On the basis of what I have seen, I would say absolutely yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Very well. That is the first thing. I would like a clarification. I am reading a sentence in a reply to a parliamentary question I asked, dated 7 September 2018. The question reference number is 35974/18. There is a paragraph describing all the wonderful initiatives mapping the black spots. The reply states:

In addition to its work on handset testing, following a consultation process, ComReg has also developed a licensing scheme [I do not know if this is operating] which will enable households and businesses to use mobile phone repeaters to boost signals into their premises and bring immediate improvements in mobile coverage.

That is from the Minister's reply to a parliamentary question. Can somebody give me a detailed on note on whether any of that has actually happened, and the numbers? I have provided the reference number to that parliamentary question.

I would like to move back to the subject of broadband. I will take it in steps. These are questions requiring straight "Yes" or "No" answers. This is a system where the State is investing and the private sector is putting in money. It might not meet the legal definition, but it is essentially a public private partnership, PPP. Is that fair to say? It does not meet the legal definition.

Mr. Mark Griffin:

Yes, in inverted commas.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The State and the private sector are putting money in. It is a public private partnership of a type. I would like to clarify this. This infrastructure is not a design and build programme. Is that correct? I am comparing it to other PPPs with which people are familiar. To use the usual terms, it is not a design and build programme; it is not a design, build and operate programme; and it is not a design, build operate and finance programme. The Department is going to identify a preferred bidder. The preferred bidder will contribute X and the State will contribute Y. Is that the type of structure we are talking about?

Mr. Mark Griffin:

It is effectively a programme to design, build, operate and maintain. It is a gap-funded model. Effectively, the bidder puts in equity and the State puts in a subsidy to meet the gap. That is paid over a 25-year period. The design, build, operation and maintenance are carried out by the company.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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So there are no upfront costs to the State from this broadband plan.

Mr. Mark Griffin:

No. As expenditure is incurred, it is assessed and evaluated. Is it carried out in accordance with a contract and a payment is made.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What do we want to know in advance? We have spoken this morning about the State pre-paying for services that may not ultimately be delivered. This is a rolling situation. In the case of the school projects held by Carillion the State had not paid up. The PPP company was carrying the cost until such time as it handed it over, and then the State was to pay an annual leasing. The State made no prior payment and was not caught if something went wrong. Is this proposal a proposal for the State to pay up from year one on an ongoing basis? At what stage does the taxpayer start putting money into this programme, or does that happen from day one?

Mr. Mark Griffin:

I will let Mr. Ó hÓbáin take that question, but there are some caveats about what we can and cannot say at this point.

Mr. Ciarán Ó hÓbáin:

Without going into the detail of the procurement of the contract, it is clear that the payment from the State would follow capital investment and building. It will be linked to work that has been done.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Surely some of these details were referenced when the Department put out the document outlining what it was looking to tender. I hope that information was in there. I presume the Department put this information on eTenders or wherever the process started. Surely there had to be information to give people who might want to express an interest an idea of what they were talking about. That cannot be confidential if it is on eTenders. I want to get a feel of what this contract is. Mr. Griffin knows what I am getting at.

Mr. Mark Griffin:

I do.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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This has been called a gap measure. The Government announced it was adopting a gap-funding model to procure the infrastructure. In that model, the infrastructure is designed, built and operated by the operator and the Government puts in the shortfall. Without disclosing it, is there a figure above which the Department will not go on behalf of the taxpayer?

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In previous PPPs, it has often been the case that a preferred bidder is identified but it is never brought to conclusion. Up to that point, are all costs to date being worn by the consortium that is putting in the bid? Is the State caught for any costs up to the signing of the contract? Are we paying for the bidders to put in their tender?

Mr. Seamus McCarthy:

There are advisory costs.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I mean in relation to the other side.

Mr. Seamus McCarthy:

In regard to the provision of the service, a site acquisition cost arises in a classic PPP. Other than that, there are no expenses.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The cost to the State of professional fees has been €23 million to date. That is fine. I want to establish that when the preferred bidder is identified, there is still no contract in place. I ask the witnesses to talk us through the process. Once the preferred bidder is identified, what is the process by which the contract gets signed? Talk me through the process between those two steps.

Mr. Ciarán Ó hÓbáin:

When we get to-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Would it be helpful if we had the senior KPMG person advising on this before the Committee on Public Accounts? Mr. Ó hÓbáin said he is not an engineer. I do not know if he is an accountant. It is a somewhat left-field question. We did not suggest that. The witnesses can understand where we are coming from and why I ask the question. I have made the point. We will move on. Mr. Ó hÓbáin need not respond if he does not want to. That is all I will say

Mr. Ciarán Ó hÓbáin:

After the preferred bidder has been identified the next stage is the award of the contract, but very significant work remains to be done. There is a 1,500 page contract, and that contract has to be closed out. There are approximately 40 contracts, subcontracts and direct agreements that have to be closed out by a preferred bidder to the satisfaction of the Department before the contract with the Minister can be signed. That is the significant piece of work that has to be concluded after determining the preferred bidder. In its tender, the bidder identifies its solution to the deployment plan, subcontractors, how it will build this network and how it will operate it. The bidder identifies parties that will deliver on that work for it. In the period after identifying the preferred bidder and before a contract is concluded, the bidder must follow through on those commitments and put those contracts in place. That is the significant piece of work that will have to be done.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is that months' of work?

Mr. Ciarán Ó hÓbáin:

As with a PPP, it will take three to four months for that type of-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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As such, there is essentially no contract with the State until the contract is signed?

Mr. Ciarán Ó hÓbáin:

Correct.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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So in theory, even after the preferred bidder stage, if the bidder feels that the State is being too onerous in the contract negotiations it can walk. In theory, if the State is not satisfied that the preferred bidder is doing what it wants, its representatives could decide the process is not working out.

Mr. Ciarán Ó hÓbáin:

I think it is fair-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can that happen?

Mr. Ciarán Ó hÓbáin:

It is absolutely the case that until there is a contract, there is no contract. When the preferred bidder has been identified we very clearly identify all the conditions precedent on which they have to deliver. There is clarity at that point as to what steps need to be discharged over the period between identifying the preferred bidder and signing the contract. Until there is a contract, there is no contract.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Tell me about the communication. ComReg is involved. Will that body be the regulator of the service, as it is for mobile telephone services? What will ComReg's role be after the process?

Mr. Ciarán Ó hÓbáin:

ComReg has no direct role at the point of the awarding of a contract. The operator of the network is the operator of an open-access wholesale network. That operator sells services to retail providers like Sky, Vodafone, Virgin Media and Eir. It will operate in the telecoms market in Ireland and as with any other operator in that market, it will fall into a market in which ComReg has powers. ComReg's powers remain the same. No direct role is envisaged as of today.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is, at the point of awarding the contract.

Mr. Ciarán Ó hÓbáin:

At the point of contract, yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Ó hÓbáin was likening the mobile phone system to the broadband network, noting the similarities, etc. If the regulator has a role concerning the mobile phone signal in a location, will it not have a role in regard to the provision of broadband service?

Would that not be a logical extension?

Mr. Ciarán Ó hÓbáin:

The regulator has a role where it licenses or regulates an individual company.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will a licence be required in this case?

Mr. Ciarán Ó hÓbáin:

Licences could be required if part of the broadband operator's solution was wireless and licence spectrum was being used. The regulator could have a role in the broadband operator accessing, for example, the Eir network, which is core to this-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Or the MANs, which the Department mentioned.

Mr. Ciarán Ó hÓbáin:

Yes, but ComReg does not regulate the MANs.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Why not?

Mr. Ciarán Ó hÓbáin:

It regulates networks which it has designated as having significant market power, but the MANs have not been so designated.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Department was telling us how brilliant the MANs are in the 94 urban areas but Mr. Ó hÓbáin is now saying they do not have very much power and do not require regulation.

Mr. Ciarán Ó hÓbáin:

I did not say "very much". A high bar must be passed to be deemed to be in that dominant position.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let us return to learning from the mistakes made in the issuing of the licences for the mobile phone companies, which has given us a bad service in many areas. One of the reasons was that the licence did not specify a high enough target, although I am not suggesting the target should have been 99%. As time went on, the regulator went easier on the companies. Will the percentage of target be specified in the contract or will it be in the licence? Who will oversee the implementation of this? Two or three years into the process, if the company is found to be unable to do it anymore for a variety of reasons, or if it is just dragging its feet, does the Department have a process by which it can remove the contractor? That would be normal in a large contract like this. It cannot be that the State is locked in and has to pay €2 million to get the contractor off the pitch. How will the Department protect the State in the event of the contract not being developed?

Mr. Ciarán Ó hÓbáin:

That question was already asked but I did not have the opportunity to answer it properly because I was answering a question on ComReg's role in this regard. The 1,500-page contract, which was mentioned, seeks to impose a strict and clear regulatory regime on this contract.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Ó hÓbáin mentioned a regulatory regime, but who will the regulator be?

Mr. Ciarán Ó hÓbáin:

It is the Department's contract, the Minister's contract, so the State would be regulating the contract.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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A party to the contract is a regulator of the contract.

Mr. Ciarán Ó hÓbáin:

It is the enforcer of the contract. "Enforcer" is the word I would use. The contract is very strong on the issues the Chairman raised. For example, it sets out in considerable detail what the winning bidder has to do. It will have put forward a technical solution and deployment plan and will have to deliver on them. It will have to upgrade that technology over time to keep it consistent with what is available in other parts of the country. It will have established the cost for delivery. There will be payment milestones which are absolutely linked to the roll-out and there will be clawback around those. There will be oversight of the tendering process for subcontractors and the price of materials. There is a very strong regulatory oversight through the contract because the contract calls out the regulation.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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When a dispute arises, what will be in the contract to protect the taxpayer? Will every dispute go to court? What is the dispute resolution mechanism? These are billion euro contracts and there is no point in finding out in four years' time that something was not covered in the contract. What provisions, not specific to whoever gets the contract, will be in the contract in this regard?

Mr. Ciarán Ó hÓbáin:

At the more practical level, the approach that has been adopted is to be as explicit as possible. Part of the reason the dialogue of this contract has been so extensive is to ensure that one has limited, to the extent one possibly can, the possibility of a dispute arising over the interpretation of what clauses in the contract mean. Once one is into resolving disputes, one has a problem. The focus of the contract, therefore, has been to be detailed and explicit so there is no scope, or limited scope, for such disputes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There are disputes with many public contracts, and issues arise with contractors. Is there an arbitration mechanism? What mechanism should have a contract like this have in it?

Mr. Ciarán Ó hÓbáin:

I am starting to drill down into the detail of the contract to a greater level than I should. Suffice to say, these issues are anticipated and, at the point when a decision about whether to appoint a preferred bidder is made, the intention is that we will publish a significant amount of information with significant detail about the controls in place in the contract, including, to answer the Chairman's question, how disputes are managed. I probably cannot go further than that today.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Planning for this contract started in 2013. As was noted earlier, the document provided to the committee said the Department launched a procurement process in December 2015 and, at that time, a speed of 30 Mbps was specified. Will a speed of 1 Gbps be specified, or what figure will be specified? Future-proofing can mean anything to anybody but taxpayers need to know what speed of fibre broadband will be provided in their homes per the contract. Will an upload and download speed be specified in the contract?

Mr. Mark Griffin:

Fibre provides speeds of 1 Gbps plus. It will be predominantly fibre in homes and we expect the bidder to make a minimum offer of 150 Mbps to additional consumers from the start of the process.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will Mr. Griffin repeat those figures?

Mr. Mark Griffin:

As it will be predominantly fibre in homes, there is no effective limitation on speed. It will be gigabit.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Department mentioned earlier, and Mr. Griffin has just done so again, that the regulator can take action if the contractor has to take a connection from the existing Eir network, leaving aside the MANs because they are high speed. The Department also said it will use some of the Eir lines and poles, and that the person who is still in the tender contract is in discussion with Eir.

Mr. Mark Griffin:

Not the copper.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It will be new wires on old poles.

Mr. Mark Griffin:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin should say that because when people hear the word "poles", they think of the old copper wire that is not fit for purpose.

Mr. Mark Griffin:

There will be new wires on old poles and, in many cases, there will be new wires on new poles.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The regulator normally takes action if there is a dispute between the person who gets the contract and Eir, the owner of the existing network, over what the latter is charging. Disputes will arise as years go on and the regulator normally has a function in that context.

Mr. Mark Griffin:

It sets the price.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is a role for the regulator in this project.

Mr. Mark Griffin:

Absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Department gave the impression there is no role for the regulator.

Mr. Mark Griffin:

Mr. Ó hÓbáin said for the Eir network, where there are 1.2 million poles or 15,000 km of ducts, it will all be a regulated price which the regulator will determine.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What percentage will the contract specify? Is it in the region of 99%? All the publicity claims it will be every house.

Mr. Mark Griffin:

It will be every house.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does every house want broadband?

Mr. Mark Griffin:

We will consider each individual deployment area. I do not know what the exact figure is but each deployment area contains approximately 5,000 premises. We and the contractor will do a low-level design of each of the 5,000 premises to see what makes sense in the type of infrastructure to be provided. Fibre may not make sense in all cases and it may not be economical to do so. It is safe to say, however, that for the vast majority of the 542,000 premises-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There will be 90%-plus.

Mr. Mark Griffin:

Yes, I would say more than 90%.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Griffin referred to areas with 5,000 premises. Are they all identified in the pre-contract stage or are they subject to negotiation after that?

Mr. Mark Griffin:

At a high level, the deployment areas are identified and a lower level design is then prepared by the bidder but approved by us.

Would that be approved before the contract is signed, rather than being worked out as one proceeds over the next number of years?.

Mr. Ciarán Ó hÓbáin:

The low level design would happen after a contract award. The low level design is effectively when one is in the build stage. In the proposal the proposer sets out how it would roll out a fibre network for all of Ireland. The low level design is getting onto the ground in a relatively small area to do so.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let us say an area is completed and a couple of new houses are then built there. What happens the new houses?

Mr. Ciarán Ó hÓbáin:

It recognises that there will be new houses.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Who sets the fee for that? Previously, the local authority used to do it for water. Irish Water does that now and it charges what it wishes. Will we be in the hands of the private sector or will the regulator have a say in setting that price?

Mr. Ciarán Ó hÓbáin:

The contract addresses how that is dealt with. I will make two points about the contract. One is that it is the ambition, and the contract was written for this, to ensure that the service that is provided in rural Ireland is at least on a par with the one that is available in urban areas. Part of that is cost. The contract addresses the manner in which the owner of the network can charge the retailers who come on the network, such as Vodafone, Sky and so forth. It sets a standard charge for that.

To return to the point on the 30 Mbps, there are-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are really hung up on that.

Mr. Ciarán Ó hÓbáin:

It is a very important point. The world has moved on. The three bidders in the process said fibre, which meant it would never be 30 Mbps but always 100 Mbps and more. However, one must think about who will be selling services on the network. It will be the big retail players such as Sky, Vodafone, Eir and so forth. They will not be differentiating. Dermot Bannon is doing the advertisement for Vodafone now. After the news on a Sunday evening he is selling the same service whether one is living in the middle of Dublin city, north County Dublin or south Mayo.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is a universal price.

Mr. Ciarán Ó hÓbáin:

The companies will provide the same service. It is a matter for them to decide if they want to differentiate on price but it is difficult to conceive that they would want to.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are all familiar with the amber area of the map you referred to earlier. If some of the commercial operators want to and consider it commercial to do some work in this amber area, can they do that tomorrow morning?

Mr. Ciarán Ó hÓbáin:

The short answer is that the map is dynamic until such time as there is a contract award. The European Commission will say that if a commercial roll-out has happened or is proposed one cannot put State money into going into the same place. I am paraphrasing it somewhat simplistically. If there was new commercial roll-out one would have to take that into account.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Who will redraw that map at the point of the contract next spring?

Mr. Ciarán Ó hÓbáin:

The map has been-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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At present what is happening with some of the bigger providers is that if there are three or even 23 houses on a road they say they cannot touch them because they are in the amber area. They are giving the impression that they are not allowed in there. Can they go into the amber area and pick houses where it might be viable for them to provide it? Is that happening at present?

Mr. Ciarán Ó hÓbáin:

I am sure that as a public representative you are receiving some communications because we see many of them in the Department. I will not refer to a particular operator but these are about people whose houses are very close to a roll-out by an operator. Usually the issue is that another 100 m would include one house or a few more houses. The Department cannot control that. It cannot require an operator to include premises. However, there is no barrier to commercial operators rolling out infrastructure in Ireland.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Or into the amber area today.

Mr. Ciarán Ó hÓbáin:

Anywhere in Ireland.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is what is being said by providers. Perhaps they do not wish to go there so they quote the national broadband plan and say they cannot go into the amber area. The amber area is being used to possibly prevent some people getting broadband at present.

Mr. Ciarán Ó hÓbáin:

It is one of the complexities.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Do you understand my point? They are using that reason. You referred earlier to the reinvestment in the metropolitan area networks and the money invested. Who will own the network of fibre to each home when it is completed?

Mr. Ciarán Ó hÓbáin:

The national broadband plan network is gap funded, which means that the bidder would own the infrastructure the bidder builds. However, as outlined earlier, the bidder is proposing to build this predominantly by using eir's network and the MANs. The MANs are owned by the State and will continue to be owned by the State. The eir network will continue to be owned by eir. The fibre that would be built on the eir network or any new poles could be owned by the broadband company.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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This is a different funding model. The Minister owns 100% of the MANs infrastructure. In this case, even though the State is going to put in whatever amount, and only God knows what the figure is at this stage, it will not own even 1% of the structure. The cable will run from the eir network or the MANs in the town to the houses five or ten miles away and even though the State will have paid a significant amount of the cost of providing it to the houses it will have zero ownership of it when it is complete.

Mr. Ciarán Ó hÓbáin:

All the poles and the ducts it is on will be owned by the existing poles and ducts in the eir network but the fibre would be owned-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the State getting for its investment?

Mr. Ciarán Ó hÓbáin:

For 25 years there will be infrastructure in place that could deliver a high speed broadband service to all the people in that catchment area.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What happens at the end of 25 years?

Mr. Ciarán Ó hÓbáin:

The first question at the end of the 25 years is what the value of the 25 year old fibre would be. It could be fibre that would have to be replaced at that point. As it is a gap funded model, under the contract the assets are owned by the bidder. I am not going too far into the contract by saying that it provides that at year 25 the bidder can continue to use those assets, if it would be obliged to, for a further ten years to continue to provide services to all the people connected to that network or the business could revert to the State.

Mr. Mark Griffin:

The State also gets the economic activities generated in the area which simply would not happen in the absence of it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I missed the point about where it reverts to the State.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will Mr. Ó hÓbáin refer to this again because I have a follow-up question about it?

Mr. Ciarán Ó hÓbáin:

If at the end of 25 years the bidder sees the business works and is prepared to continue, it would commit through the contract to continue to provide the service to all the people connected to the network for a further ten years, effectively making the contract a 35 year contract. In the event that the bidder did not wish to proceed the business would revert to the State. The cost at which that would happen-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What do you mean by that? You said the bidder is the owner.

Mr. Ciarán Ó hÓbáin:

A company will be established to operate this business and if that business does not continue it will revert to the State. There will be a cost to the State and that is provided for in the contract. When the details of the contract can be made available that will be more explicit.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If the private company or the consortium owns the fibre that is going to everybody's front door, I do not understand how the State will own the business of providing the broadband.

Mr. Ciarán Ó hÓbáin:

It is committing that at year 25 it would either continue and extend the contract for a further ten years, delivering to those-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Or walk away.

Mr. Ciarán Ó hÓbáin:

Or walk away.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In other words, the contract includes a buy back at the valuation of the fibre network at the end of 25 years. That is the impression I am getting. If the company continues it further, it continues to own it for another ten years. If it chooses not to do that, you are saying the State buys back the product. This leads to my follow-up question. In public private partnerships, PPPs, the funding model for the motorways, at the end of what we will call the concession period of 25 years it is up to the company that builds the motorway to give the road back to the State in the same condition it was on the first day. It must maintain the road to the highest standard to the last day and give it back in full working order at the end of the 25 years. That does not appear to be happening here.

The PPP model of funding is very close to what we are talking about here in that the State put in significant money and the private sector put in some money. They got the money from the toll or the usage charge, exactly as whoever is the bidder here will get the usage charges. It is identical in many ways to one or two of the motorway schemes that are run on a concession basis with a condition that, at the end of the concessionary period, they would hand it back to the State in the same condition as it was in on day one. Is that happening here? I am looking at lessons learned in other areas. I am sorry to be getting into this but it concerns the specifics of the contract. If I do not ask, our successors will be here arguing and asking did we not do our work.

Mr. Ciarán Ó hÓbáin:

It speaks to the timing of this conversation at a point at which we could signal the intention. A time when we could have this conversation on a more equal basis would probably be when a decision is taken by Government to take a course of action and when significant detail is published around what the contract would be.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It would be too late then. The contract will not be published. They never publish a PPP contract around here. "Commercial sensitivity" is the most common phrase. I would be stunned if officials did not quote that back to us.

Mr. Mark Griffin:

We can explain the operation, the mechanics and the basis on which a gap funded model was chosen over a concession agreement. We have reviewed it on a number of occasions during the process, and the view was still that gap funded was the most appropriate model in these circumstances. We can come back at a later stage and do a little bit of a deeper dive, so to speak, on the rationale for that with the committee.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I want to let the other members in. They must be tired listening to me.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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We are not.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I have one last question. There was mention of the metropolitan area network system, MANS, in the urban areas, and reinvestment by the company. I said they were not doing it out of the goodness of their hearts and I think Mr. Griffin said it was based on 10% of the gross revenue. Is that correct?

Mr. Mark Griffin:

I think so, yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is something like that. Somebody mentioned 10%, I think it was Mr. Griffin.

Mr. Mark Griffin:

I did.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The reinvestment was required to keep it maintained and up to speed. My question is whether there is going to be an equivalent here to maintain the broadband. Mr. Griffin need not specify a figure, but in respect of what has been done in the MANS to ensure the system continues to be maintained, namely, a percentage of revenue going to maintenance and upkeep, is something similar going to be provided here? What mechanism is in place to verify the gross receipts or the gross turnover in MANS, as I speak, and in this new proposal? How does the Department know it is getting its 10% reinvested in MANS? What is its measurement, verification and audit mechanism in that regard?

Mr. Mark Griffin:

In the MANS, the 10% is stitched into the contract. We spoke earlier about the quarterly review mechanisms, the KPIs, and the measurement of how they are compliant with the terms of the contract. They are also audited and also produce an annual report, so we have a line of sight-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What verification does the Department do on behalf of the taxpayer to make sure that 10% of gross proceeds are reinvested? Who does that audit?

Mr. Mark Griffin:

That is done within the division in the Department. The audit was done a couple of years back using our own internal audit unit. We have a financial adviser on contract who was part of the process as well.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The MANS contract provides the Department with the right to access to financial information in respect of the company. Something similar - I am not saying it is the same - is happening-----

Mr. Mark Griffin:

In the national broadband plan, NBP, it is open-book accounting that we are looking for. We will have full sight of the accounts of the organisation and how the money is being spent. Every single claim that comes in through the Department will go through a very rigorous process to make sure expenditure has been duly incurred - mature liabilities, the whole lot.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will be into the beginning of 2019, at least, before a contract will be signed because it is going to take a few months to get to that stage. Given that this all started in 2013, six years will have elapsed between the date the original specifications were drawn up and launched and the signing of the contract. Technology has moved phenomenally in the meantime. If the officials were starting on 1 January 2019, would they be starting from where they did with this contract? One could not possibly think they would. Has the passage of time made the contract almost past its sell-by date before the first hole in the ground is even dug? We are looking at a long-term contract and it is such a long time.

Mr. Mark Griffin:

We started the procurement process in December 2016 and set the basic benchmark of 30 Mbps. If we had started a little bit later, we would have set the benchmark higher, but we are getting it anyway through what all the bidders came forward with, which is fibre to the home. Every other single member state, I think I can say with certainty, right across Europe, is behind us and they are all going for a fibre to the home solution complemented by 5G. Some of the member states that got a little bit ahead of us are now redoing what they did because they did not pitch the level of technology sufficiently high. Fibre to the home is the solution and would be the solution if we went to the market today.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I will open the floor to other members now. Deputy Catherine Murphy is first. We will take the same sequence as this morning.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Can we have an hour and a half?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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You can have as long as you want once the questions are on topic.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I want to come back and clarify a number of things from this morning. Will Mr. Griffin reconfirm that Enet never led the current bid for the national broadband plan?

Mr. Mark Griffin:

Yes, it was part of a consortium, and while I do not want to stray too far, it was never an equity investor. I think that is a fair comment to make. The lead was Granahan McCourt, start to finish.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Does prequalification extend to the subcontractors as well or is it the ones named in the consortium?

Mr. Mark Griffin:

No, I do not believe so. I will ask Mr. Ó hÓbáin to correct me if I am wrong. The PQQ extends to the top of the pile, as it were.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Where there is equity.

Mr. Mark Griffin:

I think so.

Mr. Ciarán Ó hÓbáin:

It includes subcontractors to a limited degree but not all subcontractors.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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What would be the case for some subcontractors?

Mr. Ciarán Ó hÓbáin:

When I say "not all", the reason is that they could have a great many people to assist them, more than the bare minimum needed, but what they have to do to get through the gate to come into the process on day one, and the same test is applied if there is a change in the bidder make-up at year 2 or at the end, is to see whether that party could have come through the gate on year 1 from a technical, commercial point of view. They have to have-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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They have to have the range of skills, for example, the skill to put it on the poles and roll it out, in addition to having the money. That would be the case. The ones that would fall into that category are the ones-----

Mr. Ciarán Ó hÓbáin:

Correct. I think the Deputy has paraphrased it generally.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The officials said the Department had done some stakeholder analysis. Often we can learn more from losing a football match than from winning it, as has been said. The ones who are not happy are the ones the Department needs to be talking to. BT was quite forthright in its comments. It said it was seeking fair competition and that Enet should be fully compliant with the rules of state aid approval. It questioned whether state aid approval allows Enet to sell to itself since it is stated specifically that Enet cannot act as retail service provider. I asked earlier about AirSpeed, which is also owned by Enet, so it is selling to a retail entity that it itself owns.

Is that not unfair competition?

Mr. Mark Griffin:

I actually do not know the owners. I am not familiar with the detail of the ownership structure.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Will Mr. Griffin check this out and come back to me?

Mr. Mark Griffin:

Absolutely.

To come back to the earlier point on the work done by Analysys Mason, all concerns raised by any company on pricing or transparency were provided, with the agreement of the company, to Analysys Mason to feed into the report.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We will see it in the next while.

Mr. Mark Griffin:

Yes.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Westnet did price comparisons on similar municipal networks and stated ours is the most expensive state-owned metropolitan fibre in Europe. Does Mr. Griffin concur with this? Has this analysis been done?

Mr. Mark Griffin:

I am not familiar with the report but I imagine Analysys Mason looked across the full spectrum of issues affecting price.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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It is pretty important if we are going to go with the same entity for the national broadband plan that we have a very expensive entity to begin with in terms of wholesale price. We need to know. We need to hear more on this and on the price comparison with other countries. I know not all things are the same because there could be a city that has the same population as lives on this island.

Mr. Mark Griffin:

Yes.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I understand that but it should still be possible to get a comparator.

The State does not have a stake in Enet. It is the Irish Infrastructure Fund, IIF, that has the stake.

Mr. Mark Griffin:

I understand the Irish Strategic Infrastructure Fund, ISIF, is one of the investors, with IIF and others.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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It is not-----

Mr. Mark Griffin:

It is a wing of the NTMA. It has a pot of money and it invests in communications and energy.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social