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

I thank the Senators who contributed. I hope I can reassure Senator Horkan. The plan does provide for a lower figure, but that is absolutely due to state aid rules. Originally, it was projected to cover 750,000 homes, but once a private sector operator put up its hand to take on provision in part of the area, there was an obligation on the State to carve it out. That is the reason for it and it is a condition of state aid provision, as Senator Conway-Walsh indicated. That is why the area is smaller.

Senator Horkan is right about the cost. The cost of rolling out fibre over 96% of the land area is not greatly reduced. There will be fewer connections, but it does mean the cost will be higher. However, they will certainly not be six times higher. The figure of €500 million to which the Senator referred was the cost of the project envisaged to bring fibre to 1,100 villages, but there would have been no service to homes or premises. It was a very different project.

When we had the tender process and a competitive dialogue, it was because we did not know what the cost would be. It was not a costed operation. At that stage a €1 billion estimate was made, but it was simply to fulfil the requirement under the public spending code, that prior to starting the exploration of a competitive dialogue, we needed to have some indication of the cost and that was the figure indicated. It was at a time when there were many more homes to participate. There is an explanation for it, but it will not take three times as long. It will be completed within seven years. The earlier project was to have been completed in five years.

A number of Senators repeated some of the comments about the Department of Public Expenditure and Reform and I am pleased to have an opportunity to deal with them. The benefit-to-cost ratio was dragged left and right through a very detailed verification process and challenges were made to all elements of it. The verification process was part of a robust tendering operation. Reductions were imposed on some of the benefits and elements were identified that had been overlooked on the cost side. This was the system working. It was verification of the benefit-to-cost ratio and showed that it was credible. It went through the most stringent verification process a benefit-to-cost ratio could undergo. It is very important to bear this in mind. It was not a political benefit-to-cost ratio. It was done based on objective tested rules that were extremely conservative. Many Senators would blanch at some of what was excluded such as the opportunity to provide for a greater level of remote working. We all recognise that this could be healthy. We could see rural people being able to stay in their communities and multinationals being more willing to move into regional areas if they could be assured that workers would be able to work remotely.All those future opportunities are staring us all in the face. Anyone who reads any material about where the technology is heading will recognise that. The options were all ruled out and it was said they could not be considered. The 30% benefit-cost ratio is ruling out all these elements, which is really the reason we are doing what we are doing. We want to afford people the opportunities in question.

On the issue of recouping investment, of course the company aims to recoup its investment. It is not a charity, no more than any other business that tenders for a PPP project or any other project. It wants to recoup its investment but, as I said in my opening statement, it carries the risk. It will recoup its investment only if it is successful. If it fails to roll out the network on time, it will incur penalties. If it fails to achieve the take-up, it will incur penalties. It carries the risk and has the obligation to deliver on take-up.

It is also important to bear in mind the size of the company. In 25 years, it will have a turnover of €150 million, based on paying a regulated fee on the basis of its expected take-up. Investing €175 million in equity initially and €45 million in working capital must be considered in the context of a company whose turnover in the long term is projected to be €150 million. What the company is doing is undertaking to design, build and operate and to roll out the 156,000 km of fibre for us on existing poles and through existing ducts. It will run the service. It will be a small company, one tenth the size of Eircom. It will be a wholesale company delivering open access at a regulated price. Some talk as if this company will be ripping us off. It has a very tight mandate. That needs to be borne in mind. There was no breach of the public spending code. That is very clear.

Members are entitled to raise the meetings of the former Minister, Deputy Denis Naughten. The conclusion is that he did not have any access to the decision-making, evaluation, tendering or standards that needed to be met. The assessor, Mr. Peter Smyth, found he did not have that access and could not have had an influence. What is more, Mr. Smyth found that, by stepping down, the former Minister removed even the hint that the process was in some way prejudiced. That has been evaluated. While people are certainly entitled to raise the matter, it is fair to say that it was evaluated.