Peadar Tóibín (Meath West, Sinn Fein)
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803. To ask the Minister for Communications, Energy and Natural Resources the reason the national broadband plan will not be part of Government owned infrastructure. [22223/16]

Denis Naughten (Roscommon-Galway, Independent)
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The Programme for a Partnership Government commits to the delivery of High Speed Broadband under the National Broadband Plan (NBP) as a matter of priority. This is being achieved through private investment by commercial telecommunications companies and through a State intervention under the National Broadband Plan (NBP) in areas where commercial investment is not forthcoming.

On 5 July 2016, the Government selected the Commercial Stimulus Model as the optimum ownership model for the network that will be part-funded by the Exchequer.  The Government considered two ownership models, having narrowed the options down last December, from five models. The two models are:

- Commercial Stimulus where the private sector finances, designs, builds, owns and operates the network, with contractual obligations to the Department; and

- Full Concession where the private sector finances, designs, builds and operates the network with contractual obligations to the Department.  In this model, those assets funded by the State are handed back to the State after 25 years; commercial assets that support the NBP infrastructure would however remain in private ownership.

Both Models will deliver the same network, with the same service specifications and controls, for 25 years. In both models, the winning bidder(s) will be subject to stringent contract provisions to ensure that the network delivers quality, affordable high speed broadband to all parts of Ireland that cannot access services.

The Department has completed detailed costings, down to every individual premises in the Intervention Area and, on that basis, has modelled the likely cost of each ownership model. It would not be appropriate to publish the expected cost of building the network, the likely cost to the State, or the expected terminal value of the network, while a major public procurement process is underway. I do not intend, therefore, to indicate the overall estimated Exchequer funding parameters, or projected costs or values of the network.  Ultimately, the costs will depend on the price that bidder(s) quote in the tender process.

In choosing the Commercial Stimulus Model, the Government has had regard to the impact of the Full Concession Model where the entire project is likely to be on the Government’s Balance sheet. This would impact the general Government deficit by approximately €1bn more than the Commercial Stimulus Model and would also reduce the available capital spend for other key investment projects by up to €600m over the next six years.

The Government’s priority is to deliver this network as quickly as possible. My Department has been advised that the Full Concession Model could take at least 6 months longer to negotiate because of the complexity of identifying assets and in particular assets owned by third parties.

The Government has, therefore, chosen the Commercial Stimulus model as the optimum approach for the National Broadband Plan intervention.  The decision on ownership has allowed the procurement phase to move to the next stage, where three bidders have qualified and been invited to participate in formal dialogue with the Department. The Dialogue process with bidders will commence this week.