Paschal Donohoe (Dublin Central, Fine Gael)
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On the gap funding model and the front-loading from the tax payers, the key is that we are seeking to expand a broadband network, where we do not own the current network. The fundamental factor which made the gap funding model the appropriate one to take is that we are looking to extend an asset which is not currently owned by the State. If we were looking to create an asset to deliver 100% coverage, we would have to build it and then own it. That would cost more than what I, on balance, think is the preferable option open to us and open up a new set of risks and challenges as we go down the planning process and look to put new infrastructure in place. That is why the rental or concession model we are using is the best way to move forward.

The State's money is being front-loaded because the delivery of the infrastructure is also being front-loaded. We have faced the charge, which is understandable from the Deputy's perspective and that of people who seek broadband, that there is a delay. There is disappointment that it will take up to seven years to get to the 100,000 homes per annum after the first year where we will build up to that.

The reason the investment is front-loaded is that the delivery of the infrastructure is at the start of the 25-year period with the balance of that period being used to maintain it with a further ten years after that.

The Deputy is right that the equity contribution is up to €222 million but the overall cost of this project will be in the realm of €5 billion so there is a further €2 billion that the consortium will need to provide in order to deliver all of this and our contribution is capped at €3 billion with a possibility, although not one I am going to commit to in front of the committee today, that the cost will come in below that as we work our way through the different phases of the delivery of this.

Regarding the Deputy's point about transfer of money, it is transfer of money but it happens retrospectively. At the end of each period, if the broadband has been expanded, the consortium gets paid and if the contract is not delivered, it incurs penalties and-or does not get paid. Is it paid for doing this? Yes, it is paid via a subsidy. Why does it need a subsidy? It is because the private market will not deliver 100% coverage. The subsidy is delivered retrospectively with many different clawback mechanisms in place.

With regard to the corporation tax piece, the great risk of corporation tax is that one relates corporation tax to day-to-day current expenditure. As I said in response to Deputy Lahart, current expenditure is growing at 4% per year. We have massively increased capital expenditure and corporation tax has played a big role in paying for that in addition to dealing with the difficulty I have had with a Department over the past number of years. Even routing that in, the growth in current expenditure is 4%. I go back to the point made by Deputy Stanley. We are looking at extending an asset we do not currently own. The question therefore arises as to why we would want to own something if it is adjacent to something that is in private ownership.