Brian Stanley (Laois-Offaly, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Mr. Mulligan is one of the main people overseeing this in the Department. He and I discussed this matter a couple of years ago, along with Mr. Ó hÓbáin. The Department of Public Expenditure and Reform, on 3 April 2019, issued observations and memos for the Minister's attention. I have copies in front of me. The Department set out its concerns. The document I have to hand, from Mr. Robert Watt and Mr. Brendan Ellison, is one with which Mr. Mulligan will be familiar. It states:

We strongly recommend against approval of the appointment of the preferred bidder to the current NBP procurement process on the grounds of: cost and affordability, impact on the National Development Plan and on projects forgone as a result, value for money and specifically uncertain benefits, unprecedented risk for the Exchequer and compatibility with [the spatial strategy] Project Ireland 2040.

It also states the Department believed significant progress could be made with an alternative approach. Basically, it was saying other providers were already in the field in a lot of the relevant localities. I am familiar with some of them in Laois–Offaly. They were out there providing wireless broadband before the Department was. The two officials mentioned the cost and set out a chart on it. The document stated, "This is a more prudent approach to a long-term investment of this nature compared with committing to a 25 year contract which, by its nature, does not have the same flexibilities." They set out what this entailed. Basically, it was providing a spine.

The document states, "In terms of value for money, we have major concerns in relation to the credibility of the [cost-benefit analysis] for the National Broadband Plan". At the time, a sum of up to €3 billion was being mentioned. The document also states, "Furthermore, under this proposal the State will not own the asset, despite investing up to €3 billion in it (as compared with a private sector equity investment risk of only [the wording here is blacked out]". It goes on to state, "The lack of a competitive process in arriving at the final bid is also a real concern for the Department". It outlines the risks to the Exchequer: "[W]e believe that the State is being asked to take on unprecedented risk associated with this project". It claims the State was being asked to commit nearly €3 billion, which was to provide returns to the private operator and owner of the asset, while the latter was risking only a given amount of equity. This amount is blacked out in the document. At the time, the amount was reckoned to be around €250 million. The document states the private operator, for the given amount of equity, "will own the entire asset while accepting the State has mechanism to safeguard". The document also sets out what its authors believe was an alternative approach and, towards the end, questions why the likes of the ESB were not already being used more. Could Mr. Cleary state whether the Department of Public Expenditure and Reform still stands over that memo of 3 April 2019?