Rose Conway Walsh (Sinn Fein)
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I thank Mr. Watt for his opening statement. It would have been beneficial to have had it a little earlier than 9.53 a.m. today.

Mr. Watt has a broad area of responsibility. In terms of members needing time to scrutinise the statement, it would have been appreciated if we had got it earlier.

I want to concentrate first on broadband. The Government recently signed the contract with Granahan McCourt for the rolling out of the broadband plan, which is the most costly capital project in the history of the State. As Mr. Watt is aware, two ownership papers were produced by PwC and KPMG in 2015 that formed the basis of the Government decision to pursue a gap funding model, a privatisation model that means the private sector will finance, design, build, operate and own the infrastructure with the State giving the subsidy. This was chosen over the four other options including State financing and ownership, which we in Sinn Féin have long advocated. As we predicted, all of the bidders fell out of the bidding process except Granahan McCourt, wiping away the only stated advantage of the gap funding model, which was competition. As a result, the taxpayer will be subsidising Granahan McCourt by up to €3 billion, with the private operator contributing only €220 million in the initial funding through working capital and equity.

In his own words Mr. Watt has stated: "I note that by 2028, the private operator [will have all of their moneys paid back] in dividends and interest [...] while the Exchequer could have paid out almost €2.5 billion". In his letter to the Minister for Communications, Climate Action and Environment, Deputy Richard Bruton, dated 16 April 2019, Mr. Watt wrote that the contract "represents a major leap of faith" which represents a major subsidy from the taxpayer for private benefits. Regarding the final cost benefit analysis, Mr. Watt concluded that his Department does, "not believe that this CBA justifies the use of scarce public funds on this scale". Regarding the risks borne by the State and the private bidder, Mr. Watt again wrote that there are, "unprecedented risks to the Exchequer posed by this proposed project". He further stated: "New technological advantages [...] could result in a stranded, obsolete asset, despite Exchequer investment of up to €2.275 billion by 2026 by 2026 - in an asset that we will not even own". Mr. Watt further stated: "I would question whether the further risk associated with guaranteeing service provision over 25 years is genuinely transferred to the private operator or, in reality, actually retained by the Exchequer." He further stated:

In effect, the private operator is being insulated from project [risk] while being afforded a massive upside potential in terms of any excess profitability. [...] I wish to re-emphasise one further time this Department's fundamental concerns in relation to the unprecedented risk that the State is being asked to bear in the event that the current NBP contract is recommended for approval by Government.

In conclusion, Mr. Watt stated, "I find it difficult to see how such a contract represents value for money for the State or is in the best interests of the taxpayer."

In a reply to a parliamentary question received by my colleague, Deputy Jonathan O'Brien, on 21 May 2019, it was confirmed that after 12 months of full deployment, by as early as October 2028, Granahan McCourt can asset strip, flip and sell on the infrastructure that was predominantly funded through the taxpayer subsidy. I agree with much of what Mr. Watt said but in terms of my question, has his view on the Government's national broadband plan changed?