Written answers

Thursday, 30 May 2019

Department of Communications, Climate Action and Environment

National Broadband Plan

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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128. To ask the Minister for Communications, Climate Action and Environment the position regarding the potential sale of the holding company or a company (details supplied) in the context of the national broadband plan; and if he will make a statement on the matter. [23087/19]

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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129. To ask the Minister for Communications, Climate Action and Environment the shareholders of the holding company of the national broadband plan; the shareholding of each; and if he will make a statement on the matter. [23088/19]

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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I propose to take Questions Nos. 128 and 129 together.

National Broadband Ireland (NBI) is a new entity established by the bidder Granahan McCourt for the purposes of delivering the NBP. The equity of NBI will be invested via a holding company as would be typical for projects such as this.

The holding company will be wholly owned by Granahan McCourt Dublin (Ireland) Limited, subject to the Minister's special share in NBI. The Minister will hold one special share in National Broadband Ireland; the special share does not count as equity share capital.

The NBP Contract contains a suite of measures in relation to changes in ownership and control. For example, NBI is obliged to notify the Minister of any Change in Ownership that is restricted by the NBP Contract throughout the life of the Contract and there are provisions in the Contract in relation to clawback payments in the event of a sale of NBI prior to year 10 of the contract. If a Change in Ownership occurs, NBI (in new ownership) will continue to be bound by the NBP Contract.

NBI is obliged to seek the written consent of the Minister prior to the occurrence of a Change in Ownership of NBI that occurs at any time from the commencement of the contract up until one year after the completion of deployment. After the one year anniversary of the completion of deployment, the shares of NBI can (subject to certain exceptions) be sold without Ministerial consent but not to Unsuitable Third Parties. Unsuitable Third Parties include excluded parties specifically set out in EU procurement regulations, parties materially involved in the arms trade, parties who have been convicted of a criminal offence related to business, parties who have materially failed to comply with tax rules and parties whose activities pose a threat to national security.

The NBP Contract requires that the Minister’s consent is obtained for a Change of Control in respect of a Shareholder (i.e. Granahan McCourt Dublin (Ireland) Ltd) in National Broadband Ireland at any time until 12 months after the Deployment Completion Date. The Minister cannot unreasonably withhold his consent in this regard.

Also, if any shareholder has a contingent commitment to make a loan or equity or capital contribution to NBI, NBI is required, until that commitment has been delivered, to seek the written consent of the Minister to a Change in Ownership which results in the shareholder ceasing to have Control of NBI.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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130. To ask the Minister for Communications, Climate Action and Environment the status of the national broadband plan contract; if it exists in a draft form; and if he will make a statement on the matter. [23089/19]

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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The National Broadband Plan (NBP) agreement sets out the contractual framework for delivery of the project. The Agreement is a very detailed contract tailored specifically for the unique requirements of the NBP, running to over 1,500 pages.

The Agreement has been subject to detailed and extensive dialogue with bidders over the past 3 years, resulting in a number of revised versions being issued, including a last draft before Final Tender.

The recent Government decision to appoint a Preferred Bidder means work is progressing to close the contract, including the finalisation of financial and legal documents. A period of final due diligence on all elements of the contract is part of the normal conclusion of a procurement process.

NBI will be supported by a number of experienced subcontractors and is currently tasked with finalising negotiations on contracts with approximately 40 subcontractors to assist in the delivery of the NBP. In order to support deployment it is anticipated that a subset of approximately 15 to 20 of these subcontracts will be required prior to contract close.

It is anticipated these elements will require a number of months, with contract close expected later this year and deployment commencing shortly after that.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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132. To ask the Minister for Communications, Climate Action and Environment the position regarding contractual links which exist with the ultimate investors for the national broadband plan; and if he will make a statement on the matter. [23091/19]

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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The National Broadband Plan (NBP) agreement sets out the contractual framework for delivery of the project. The Agreement is a comprehensive contract tailored specifically for the unique requirements of the NBP, running to over 1,500 pages.

The Government decision on 7 May 2019, means that it is intended to award the NBP State intervention contract to National Broadband Ireland, subject to conclusion of the contract close process, including the finalisation of financial and legal documents. A period of final due diligence on all elements of the contract is part of the normal conclusion of a procurement process.

National Broadband Ireland (NBI) is a new entity established by Granahan McCourt for the purposes of delivering the NBP. The equity of NBI will be introduced by the investors via a holding company (or holding companies) as would be typical for projects such as this.

The precise manner in which National Broadband Ireland will be capitalised by its investors will be contractualised prior to contract close. Those contracts will be reviewed by the Department and its advisers to ensure they are in an acceptable form and content for agreements of that nature and reflect the investors commitments in respect of NBI’s capitalisation. The Minister will have the right through those contracts to enforce any outstanding funding commitments on behalf of the project if necessary. The finalisation and review of those contractual arrangements are an important part of the due diligence process that my Department is carrying out with the Bidder in advance of Contract Award.

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