Tuesday, 14 May 2019
Ceisteanna ó Cheannairí - Leaders' Questions
Leo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
I am confident that National Broadband Ireland has the capacity to deliver. If it does not, there are protections in the contract. If the company does not deliver, if it seeks an increased subsidy or if it fails to meet certain milestones, the State can terminate the contract and take over the network. I am confident, therefore, that it has the capacity to deliver but I also understand that if it does not, the contract will protect the State in that regard.
The Deputy's assertion that the State is investing €3 billion upfront as capital is not correct. The State is investing nothing upfront and will make its contribution only after the work has been done. The company must raise the money, lay the fibre and then pass and connect the homes. It will be paid for the work that is done as homes are passed and connected, which is why the way the Deputy has presented the matter does not tell the full story. The project is worth between €5 billion and €6 billion, with approximately half being invested in the form of a State subsidy and the remainder being delivered and provided by the company. It must carry out the work before it is paid and collect the user charges from Sky, Vodafone and all the other operators that will sell on services to the public. The Deputy has zeroed in on the initial investment, that is, the equity or working capital investment of €220 million. If the company does not deliver, it will have to invest more equity. If it does deliver, it will get its investment back and also a return on that investment. The risk to the State is capped; the risk to the company is not. It is important to understand that. We need to bear in mind that only one bidder remained at the end of the process.