Richard Bruton (Dublin Bay North, Fine Gael) | Oireachtas source

The gap funding model was chosen after a very detailed evaluation which was originally carried out on behalf of the State by KPMG. It went through a financial test and also went through a number of non-financial tests, and it was found to be cheaper to go this way. The biggest reason is because we are using rented poles and ducts that are already in the core service. We are not building from scratch; we are not setting up a new company to build fibre on new poles that we erect. It is the lowest cost it can be in terms of rolling this out. More importantly, it minimises the risk to the State of having to come back at the end of 25 years and having to invest again. It provides an incentive for the owner of the fibre to get on board a lot of business and make this viable in order that it can continue to fund the replacement costs and the impact of weather, and make sure it can operate this profitably into the long-term future.

By contrast, if this was coming back to the State in year 25, the risk is that the asset would not be future-proofed and we would not see the new capacity. It would be managed with a rundown date to the point where the company had to hand it back.

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