Seán Sherlock (Cork East, Labour) | Oireachtas source

I welcome the motion before the House. I have some technical questions to ask and will also request a further discussion on this issue here to discuss the more technical aspects of this plan. Perhaps that could be done outside the committee structure because every Member of the House has a vested interest in the issue and, while not necessarily being members of the relevant committee, they may be spokespersons in that area. That is the new paradigm we are in.

As I understand it, the options that were placed before the Minister were whittled down to two. The first, which the Government chose, is the commercial stimulus or gap-funding model whereby the private sector finances, designs, builds, owns and operates the network. There are contractual obligations within that model.

Second, there is the full concession model whereby the private sector again finances, designs, builds and operates the network, but the asset is handed back to the State after 25 years. My understanding is that going for the full concession model, involving a reversion of the asset back to the State after 25 years, would have had implications in putting the entire cost of the project on balance sheet. There would therefore have been an impact on fiscal space.

I did not hear the Minister's opening remarks but I think he referred to Deputy Howlin's earlier intervention about certain choices that have to be made by the Department of Public Expenditure and Reform. I will not get into a political tit for tat on that. However, the logic of opting for the fully privatised or gap-funding model is that the fiscal space would not be covered by the Exchequer's capital funding envelope.

I am seeking a discussion on the KPMG report which advised the gap-funding model. What was the legal advice in real terms for opting against the full concession model? I am told - and, to be fair, the Department has been open about this - that the full concession model was deemed to be significantly more complex from a contractual perspective. In addition, it would take six months or possibly longer to negotiate a contract. One tries to be as factual as one can but if one goes to a company like KPMG, or another external adviser in the private sector, on the law of averages they are not necessarily going to say that one should come back with a model that reverts the asset back to the State after 25 years. That is why I want to have a further discussion on this matter which warrants further investigation.

The KPMG report presented arguments in favour of the commercial stimulus model. A departmental document stated that this model placed all the technology and demand risk on the private sector, while costing the Exchequer less. In addition, the asset will rely extensively on commercially-owned third-party assets which will not be within the control of Government. That is one of the considerations which warrants further discussion.

There is cross-party support for this motion and we all have myriad examples in our own constituencies. However, anything we do now could be surpassed by new technologies in the provision of broadband. We do not know what kind of technology will exist in 25 years time. I am not breaching the Minister's confidence in saying that we had a discussion on this matter previously; it was an open conversation. If new infrastructure is being created and the State is investing in it, a more conservative view would be to retain the network in State ownership because we do not know what will happen technologically downstream. That would be a more cautious approach. Is there is a mechanism to have a discussion here on how we would fund the cost of the full concession model over a longer period that the five or six years we are talking about? We can only talk in limited terms about the future fiscal space but if the capital envelope goes from approximately €275 million up to €600 million, which may be the true cost, is there room for such a discussion? This is particularly relevant given our relationship with the EU at present and given the new political realities that exist with the EU.

I know the Minister will say that this would slow down the process. I do appreciate that point and I am not trying to score political points. I noted Deputy Stanley's reference to a Labour U-turn, but in fact there is no U-turn on this. We are, however, trying to have as broad a discussion as possible so that we can future proof what we are creating now. In that way, we will not give something away which we might have been able, with foresight, to retain as a public asset. That is the logic of what I am proposing.

However, we will support the amendment. Given that the scheme has now been announced and agreed at Cabinet, I do not know if the scheme has any legal standing beyond the fact that the Parliament will make its own voice heard on this issue. The scheme will proceed as agreed by the Government in the final analysis. Nonetheless, there is an opportunity to have a more detailed discussion about the KPMG aspect, and the full concession model versus the gap-funding model.

I would like us to have that discussion in a more detailed forum.

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