Dáil debates

Tuesday, 14 May 2019

Ceisteanna ó Cheannairí - Leaders' Questions


2:05 pm

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy. While I am happy to answer his questions, we should not lose sight of the objective here. The national broadband plan is the largest ever investment in rural Ireland and probably the most significant investment to take place since rural electrification. It is about connecting 1.1 million people, 450,000 homes, 50,000 farms and 50,000 businesses to high-speed broadband. The project is ambitious. Ireland will be one of the first - if not the first - countries in the world to do this. We have chosen fibre as the technology because nothing is faster than the speed of light and nothing ever will be. It is good for the economy through the encouragement of home working and for the environment through the reduction of commuting and emissions. It will help us to enable modern educational techniques and pursue ehealth in particular.

The contract has not yet been signed. It will be September or October before we are in a position to sign it. There will be hearings. The Minister is attending one today at the joint committee. There will be debates in the House. I ask the following sincerely not only of the main Opposition party but of others too. I appeal to them not to rule out supporting the national broadband plan just yet. I ask them to spend some time listening to the arguments and considering the plan because if we fail to sign this contract in a few months’ time, we will be back to square one. The digital divide between urban and rural Ireland will remain and deepen and it will take many years before we can put together another plan. I appeal to Members not to rule out supporting the plan until they have had a chance to consider all the facts and scrutinise the alternatives. I came to support this decision in October after Deputy Naughten resigned as Minister and I asked Deputy Bruton to take on this job. I asked him to look at the whole matter afresh, see if it was the right thing to do, consider the alternatives and see if there was an easier, cheaper, better or quicker way to do this. He considered all of the options and came to the same conclusion the Government reached last week, namely, that there is no better option. Any alternative will involve delays, will be slower, will cost as much if not more and might not even meet the objective of connecting all homes, farms and businesses.

As to the financial model, this is a €5 billion project and it is important to bear that in mind. It is €6 billion if one includes VAT and contingencies over 25 years. Of that €5 billion, the company must come up with €2.4 billion in equity, working capital, borrowings and user charges. The State will only pay the subsidy after the work is done. The company must roll out the fibre and only after it has passed the home, farm and business threshold will it be paid. It will be paid more when those premises are connected. The company must come up with the full €2.4 billion. What Deputy Micheál Martin has zeroed in on is one aspect of the funding, namely, the initial equity and working capital totalling €220 million. This is made up of €175 million in equity and €45 million in working capital. That is only the initial, upfront investment by the company. The total amount it has to find is €2.4 billion for what is a €5 billion project. If the project is successful, the company will get its equity back and a return on that. However, if roll-out is delayed, as some predict, and if take-up is not as fast as we project, the company will have to put in more equity. That is the crux of the matter. National Broadband Ireland, a private company, is taking the risk here. Its risk is not capped, whereas the risk to the State is capped.


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