Dr. Matt Yardley:

The €800 million and the €2.7 billion refer to the subsidy. There were changes to the project which impacted on our estimate of the cost. That was then taken into account in the subsidy model which influenced the numbers cited by the Deputy. From our perspective, there are three main reasons the subsidy figure increased. Two are cost-related and within our scope of work and, as such, I will address them. The first relates to Eir's commitment to roll out in the 300,000 homes area. When we constructed our model, knowing that Eir would build in that area, we made an assumption that we would buy a product from Eir to traverse that 300,000 area. That was a reasonable assumption as it would be the most cost-effective way for a bidder to get through to serve the remaining 540,000 households. Through the process, particularly at final bid stage, it became clear that that product was not fully consistent with what the bidder needed to meet all of its obligations in a 25-year contract. The bidder had some nervousness about relying on that product to traverse the 300,000 area because it was signing up to a range of obligations for 25 years and everything was dependent on the connection through that area. We took the decision on the cost modelling side to inform the Department that it would be more prudent not to assume that product was available but, rather, to build through that area with new fibre using duct and poles from Eir. That is more expensive because it involves deploying new infrastructure across that area. That is stage 1, and it was the most important cost change through the process.