Tag Archives: National Broadband Plan

Fianna Fáil leader Micheál Martin; Taoiseach Leo Varadkar during Leaders’ Questions

This afternoon.

In the Dáil, during Leaders’ Questions.

Fianna Fáil leader Micheál Martin raised what he called “the shifting sands” in relation to the composition of the consortium which will be responsible for delivering the Government’s National Broadband Plan.

In particular he drew attention to the relationship between Granahan McCourt, owned by US billionaire David McCourt; Tetrad Corporation; and McCourt Global, which is owned by David McCourt’s billionaire brother Frank McCourt.

In doing so, he claimed the Government hasn’t been fully transparent about the financial guarantees from different entities which will underpin the project.

Mr Martin’s comments followed Justine McCarthy, in The Sunday Times, reporting at the weekend that McCourt Global were denying that they had involvement in the broadband plan, despite the Minister for Communications Richard Bruton saying they did last week.

Prior to last weekend’s report, Ms McCarthy previously reported that Frank McCourt was also at a dinner meeting that the former Minister for Communications Denis Naughten held with David McCourt in New York in July 2018.

Last Sunday Mr McCarthy reported:

“After repeated attempts to contact him [former Minister for Communications Denis Naughten] last week, Naughten said on Friday that he would reply by email to questions about his interactions with Frank McCourt. He has not done so.”

Mr Varadkar told Mr Martin today that he was “weaving one of his many conspiracy theories”.

Mr Martin started out by saying that last week Fianna Fáil TD Barry Cowen was told there were three investors involved the plan – Granahan McCourt, Tetrad Corporation and McCourt Global.

He said just last evening, Fianna Fáil TD Timmy Dooley was told both Tetrad Corporation and McCourt Global had reiterated their support to final tender.

But he said, last night, in a further written reply, it emerged there will only be two investors – Tetrad Corporation and Granahan McCourt.

He added:

“And we’re also told, Deputy Dooley was, that Tetrad provided a commitment in relation to the equity only required for the project. In other words, they will contractualise a legal underpinning of €175million from the lead bidder – a far cry from the €2.4billion Taoiseach that you gave the impression in the House some time ago that they would be putting in.

There is no legal lein from what we can see on that at all.”

Mr Martin went on to raise the dinner meeting between the then Minister for Communications Denis Naughten and US business man David McCourt in July 2018 in New York, and the minutes of the same.

Mr Martin said:

Taoiseach, in hindsight, I would put it to you that that meeting held on 16th of July, 2018 in New York, between former minister [for communications Denis] Naughten and David MCourt, Frank McCourt was actually quite significant.

“It was a month before the deadline for guarantees of financial underpinning and the consortium had to be submitted. The deadline was August 15th.

“Four serious issues were discussed in relation to the project. We know that there was a need for a permanent Irish-based leadership position, the importance of the 15th of August 2018 deadline and the need for the necessary financing to be in place at the time. This deadline will be met, the minutes say.

“‘The need for any changes in the make-up of the consortium to be avoided or, if necessary, to be kept to a minimum’. ‘The importance of this issue is understood by the consortium which has been advised by Arthur Cox that as long as the consortium’s lead bidder remains unchanged, such changes should not necessitate any delay’.

“Now we now of course know that there was a change in the lead bidder actually from Enet to GMC [Granahan McCourt]. There was a change in the lead bidder and there was a change in the consortium. And there was a change in those who were financially underpinning the project.

And there’s been an impression since Taoiseach that McCourt Global have been in this from the very beginning. McCourt Global are saying they weren’t involved in this, in any shape or form. And Frank McCourt was at that meeting, Taoiseach.

Minister Naughten had to resign, he’s been less than forthcoming. He’s gone silent, he’s not available to comment on this. And I’m putting it to you Taoiseach that it’s extremely important that you would talk to the former minister and get him to give a comprehensive, transparent statement in terms of all of these meetings.

“You might confirm to me, Taoiseach, did Peter Smyth [who reviewed the plan’s process last year and found meetings Naughten had with McCourt didn’t influence the process], during his inquiries speak to Frank McCourt?

“Where will the ultimate liability fall if the plan fails? Or if Granaham McCourt Dublin Limited folded – would it fall on Tetrad Corporation to provide the equity on the National Broadband Plan?”

In response, Taoiseach Leo Varadkar said there was nothing new in what Mr Martin said and that it was well known that the consortium had changed for many months.

He added:

I wasn’t at that dinner [in New York]. No current member of Government was at that dinner. Minister Naughten was, I can’t answer questions on his behalf but I am confident that all of this was covered in the independent report done on this matter carried out by Peter Smyth some months ago and that’s published and in the public domain.”

He added:

In relation to the financial guarantees, National Broadband Ireland will make available €220million in equity and working capital upfront. This will be legally required by the contract which is being finalised. There is no upfront contribution from the taxpayer. The taxpayer only contributes after the fibre is deployed, homes are passed and subsequently connected.

“The total cost of the project is between €5billion and €6billion, including VAT and contingencies with roughly half coming from the State in the form of the Exchequer subsidy and the other half from the investor and commercial revenues.”

In terms of the upfront contribution – €175million comes from Tetrad Corporation and the rest from Granahan McCourt Dublin Ireland Limited. The funding commitments will be contractualised in advance of the contract award…”

Mr Varadkar went on to say:

I understand the department has now corrected the record and clarified any confusion in relation to McCourt Global’s role. It’s role, as I outlined to the Dail last week, is one of two entities relied on for pre-qualification.

“They provided a letter of support. At final tender the equity commitments were provided by Tetrad and I’m sure Minister Bruton will be happy to clarify any further issues or to answer any further questions in this regard.”

Mr Martin said Mr Varadkar’s respond was unsatisfactory and that the information had been “dragged” from him.

He also said that, as for Mr Varadkar’s assertion that the record was corrected, this only emerged last night in PQ replies.

He added:

You can’t go on being as detached as you are. A former minister responsible for this project and this tender met with the preferred bidder on a number or occasions.

“And we were led to believe they were all innocent dinners – ‘ah sure, we’re just having a personal lunch’. They were not, come off it, Taoiseach.

“You can’t stand up here as Taoiseach of the country and say ‘no one in the current Government is involved’. For God’s sake, he was a former minister with you. You still depend on him for support.

Frank McCourt, of Global McCourt [sic], was at that dinner and they weren’t there talking about the weather.”

“…You pretended you saw no evil until all the other dinners emerged and then Denis Naughten fell on his sword. Denis Naughten, the former minister, has an obligation to talk to the House and tell us everything that took place in relation to this.”

“Gobal McCourt [sic] have now disappeared. Global McCourt [sic] have now disappeared minister, and you’re department was telling The Sunday Times two weeks ago that, your department was telling The Sunday Times two weeks ago that Global McCourt [sic] were the financial underpinners of this project in two series of articles.

“You’re confusing the [inaudible] deliberately in my view, at this stage. What are you hiding in relation to the relationships between GMC and Tetrad and Global..”

Mr Varadkar went on to say:

The fact that Deputy Naughten attended those dinners is old news. It’s been in the public domain for many months, we knew that last year. Deputy Naughten resigned from Government over six months ago and we used the interim period to make sure that this bid was sound and that it was the right one to go forward with. And an independent report was done by Peter Smyth, as the independent auditor, dealing with all these matters.”

“Deputy, deputy, deputy, calm down, deputy you need to calm down…

“Ceann Comhairle, the deputy really needs to calm down here. The Government has been very transparent on this matter.

What’s happening here is, once again, once again, Deputy Martin is weaving one of his many conspiracy theories.”

Mr Martin replied that when the controversy arose over Mr Naughten’s dinner meetings, Mr Varadkar also accused Mr Martin of creating a conspiracy theory.

“Twenty-four hours later, he resigned,” he added.

US giant McCourt Global denies backing David McCourt’s national broadband bid (Justine McCarthy, The Sunday Times, May 19, 2019)

She told the Taoiseach that broadband provision in rural Ireland remained a “big problem” and she asked him how long people are going to have to wait. “It’s not fair that people in Dublin get access to everything. Everyone should have those opportunities,” she said.

Seems legit.

*stares into abyss*

Fintan O’Toole, in The Irish Times, writes:

At stake in the broadband scheme is what Robert Watt, secretary general of the Department of Public Expenditure, has called in an official memo “the unprecedented risks associated with this project”.

When was the last time unprecedented risk turned into a disaster for the Irish taxpayer? A decade ago. Whose fingerprints were all over it?

KPMG.

And who devised the outrageous model at the heart of the NBP?

KPMG.

As of January, we have so far paid KPMG, one of the biggest consultancy and audit firms in the world, €11.33 million for work on the NBP.

This is the way public policy is formed in the State now.

Good times

Fintan O’Toole: KPMG hoovers up fees as politicians forget everything (The Irish Times)

Previously: The KPMG Connection

Minister for Finance and Junior Finance Minister Patrick O’Donovan

Last night.

On RTÉ’s Drivetime.

Limerick County Fine Gael TD and Junior Finance Minister with special responsibility for Public Procurement, Open Government and eGovernment Patrick O’Donovan spoke to Mary Wilson.

He was on the show to talk about his proposed ‘opt-in’ eGovernment service – called the Digital Postbox – which will allow citizens to receive State correspondence electronically.

But they also discussed the National Broadband Plan – after Ms Wilson asked if there was enough broadband to make this service a reality.

From their discussion:

Patrick O’Donovan: “It’s regrettable and it seems a pity now that we have a kind of alliance building up that’s opposing the delivery of rural broadband…”

Mary Wilson: “I don’t think people are opposing the delivery of rural broadband, minister. They’re raising big questions about Government investment of €3billion which has to be, you know, up front Government investment. And is it €200million from Granahan McCourt?”

O’Donovan: “Well, I’m not going to get into what the specifics are in relation to it.”

Wilson: “Why not? Let’s get into it”

O’Donovan: “Because, as the minister for finance said, Mary, over the weekend and you know this as much as well as I do. There’s a commercial contract negotiations currently under way, the Government have said what are maximum liability is going to be.

“But it’s interesting, you know. While the opposition have given a whole plethora of reasons of why they’re against the roll-out of rural broadband to the people like the 22,000 people in Limerick that need it. They’ve provided no alternative.

“It reminds me a bit of the Brexit-type scenario. Some of the people from the Brexiteers who say ‘alternative technologies’. I mean I heard one person suggesting, you know, that we roll it out to the village. We’ll bring broadband to the village and God is good after that for the people who are living out in the hills around it.”

Wilson: “But at least, at least, at least your colleague, the Minister for Agriculture [Michael Creed] when he was asked a straight question: how much, he answered the question on Clare FM. He was asked ‘how much?’ and he said ‘something shy of €200million’. I’m asking you a straight question.”

O’Donovan: “I’ll give you a straight answer. I’m not a member of the Cabinet, I don’t know. And I don’t know because…”

Wilson: “Should you ask?”

O’Donovan: “No, I’ll tell you why I shouldn’t ask. Because it’s commercially sensitive between the Government which are the 15 members of the Cabinet and the consortium that has been put together to deliver a service that no, remember, no commercial company out there, after having dragged this around for years. No commercial company out there is prepared to deliver broadband to the 22,000-odd people in County Limerick…”

Wilson: “OK. Was Michael Creed, was Michael Creed wrong when he was asked a straight question to answer honestly?”

O’Donovan: “Well I don’t know. To be honest about it. I don’t know because I, what I can tell you, with my hand on my heart, I don’t know the answer to the question that you’re asking. What I do know…”

Wilson: “I know but Michael Creed did and he answered it. Was he wrong to answer it?”

O’Donovan: “Well I’ll tell you – we’re in the middle of commercially sensitive negotiations.”

Wilson: “But the figure is out there now. A man at the Cabinet table has given us the figure.”

O’Donovan: “But no one has, Mary, with the greatest of respect, no one has said that that’s the right figure or the wrong figure. What we know is that the maximum amount that the State’s liability will be, when you take out VAT, is €2.6billion and again, as I say, I have heard no one in the Opposition benches, or no one in the media, or nobody even in the commercial companies that are out there, who could possibly deliver this, saying ‘we could do that for a lot cheaper’.”

Listen back in full here

Rollingnews

Thanks Bebe

From top: David McCourt with Taoiseach Leo Varadkar at a Science Foundation of Ireland event in new York, March 2018; Economist and associate professor at University of Limerick Stephen Kinsella

This morning.

Economist, associate professor at University of Limerick and Sunday Business Post columnist Stephen Kinsella spoke to RTÉ Radio One’s Seán O’Rourke.

It followed Fine Gael Minister for Agriculture Michael Creed saying Granahan McCourt will be putting less than €200million into the National Broadband Project, compared with €3billion from Irish taxpayers.

Mr Creed’s comments were made on Clare FM last Wednesday and reported by Justine McCarthy in The Sunday Times yesterday.

Mr O’Rourke asked Mr Kinsella for his thoughts on a ministerial press statement saying that Granahan McCourt is “responsible for €2.4billion towards costs” in relation to the project.

Mr Kinsella said:

“They have to run the network but they’re not being paid to actually install it. We’re paying them to install it. So the State fronts up the money first, builds up the network and they then operate the network.

“And in operating the network they recoup fees from the operators that they’re going to contract out to – to sell you your broadband: Vodafone and so forth.

“So while they will have to invest that money, they’ll be getting it in, in revenue as they do so. So the actual amount of the money that they front up, as the minister said, will be in the region of  €180million.

“This time last week, we conservatively estimated, my colleagues Eoin Reeves and Donal Palcic, estimated it [the €180million figures] to be around €300million-€400million. And we assumed that we were very conservative when we assumed that.”

Asked if he thinks it’s a good deal for the State, Mr Kinsella said:

“…The negatives are that the advice from the Department of Public Expenditure has been ignored and the public spending code hasn’t been adhered to. And we don’t really have full confidence that the private sector is bearing enough of the risk to justify the amount of investment that the State is putting into it.”

Given Mr Kinsella’s earlier estimate of €300million to €400million now being confirmed as €180million, Mr O’Rourke asked Mr Kinsella: “how could they get it so cheap?”

Mr Kinsella replied:

This is the question. It would be a very low-ball figure in the history of public-private partnerships like this and again my colleagues at the University of Limerick, Eoin Reeves, and and Donal Palcic are very well published on this, and around €300million-€400million would have been a conservative estimate. €180million seems quite low.”

“But again we are where we are now. The Cabinet has decided to award preferential bidder status to this company. If they decided to cancel it tomorrow there could well be very serious legal implications for the State.

“So the question is, right now: What aspect within the contract structure exists, to make sure that three or four years down the line, this company can’t just flip and asset strip it, extract the public value that is already put in there – that’s the key question for me at least.”

Listen back in full here

Earlier: Bryan Wall: Your Money And Your Broadband

Previously: “Seán, You’re Sounding Like A Member Of Fine Gael’s Frontbench”

Fianna Fáil leader Micheál Martin and Sinn Féin president Mary Lou McDonald

Sinn Féin will move a Dáil motion next week seeking to stop the National Broadband Plan and to appoint ESB to deliver broadband to rural Ireland.

In a statement, the party’s president Mary Lou McDonald said:

“The National Broadband Plan is flawed and will not deliver what is needed.

“Micheál Martin says he wouldn’t sign this plan but he won’t do anything about it. This is typical Fianna Fáil – words but no action.

“Well, here’s a challenge to Micheál Martin and Fianna Fáil. Sinn Féin will move a private members motion in the Dáil which calls for the appointment of ESB to deliver high speed broadband to every home, farm and business in rural Ireland.

“This would ensure the infrastructure stays in public ownership, it would deliver value for money and, crucially, it would finally deliver high quality broadband for rural communities.

“It is time for Fianna Fáil to put up or shut up. They should support Sinn Féin’s motion.”

Sinn Féin to move Dáil motion to appoint ESB to deliver broadband to rural Ireland (Sinn Féin)

Earlier: Fibre Optics

Rollingnews

Fianna Fáil Leader Micheál Martin

The Fianna Fáil leader said that if his party came to power before the contract with the government’s preferred bidder was signed it would not go ahead with the deal. It would instead set up an agency within the state-owned utility company to deliver the service.

Hurrah!

However, Fianna Fáil would not bring down the government over the scheme, which is expected to cost taxpayers €3 billion and provide broadband to 540,000 homes and businesses.

Oh.

Micheál Martin: I’d axe €3bn broadband contract (Collette Sexton, The Times Ireland edition)

Meanwhile

Last night: Lacking Fibre

Previously: The Plan: Save Denis



This afternoon.

Dáil Eireann.

Social Democrat co-leader Catherine Murphy (top), Sinn Féin’s Brian Stanley (centre) and others are questioning Minister for Communications Richard Bruton on the National Broadband plan.

Watch proceedings live here

Last night: ‘The Procurement Process Should Be Cancelled’

Meanwhile…

This afternoon.

Leaders’ Questions.

Minister for Communications Richard Bruton (above) defends overruling civil servants who warned against the National Broadband Plan to Fianna Fáil leader Michael Martin (top) and others.

It follows the publication of documents this afternoon showing that the Secretary General of the Department of Public Expenditure last month called for the procurement process to be cancelled.

Earlier...

Minister for Finance Paschal Donohoe (left) and Robert Watt, Secretary General at the Department of Public Expenditure

Documents released this afternoon show that Robert Watt [Secretary General at the Department of Public Expenditure] went so far as to call for the [National Broadband Plan] procurement process to be cancelled.

On 1 April, Robert Watt wrote a note to Paschal Donohoe in advance of the minister’s meeting with the Taoiseach some days later.

He strongly recommended against the plan on grounds of affordability, risk and value for money.

Minister was warned that National Broadband Plan posed great financial risks (RTÉ)

Mr Watt wrote:

“In relation to value for money, we do not believe that the cost-benefit analysis has been undertaken.

“The justification for spending €3billion on broadband has not been presented and we believe this involves excessive costs and risks for the Irish taxpayer, with questionable benefits, incremental improvements in broadband based on National Development Plan investment are more affordable and sustainable from a risk perspective.

“This alternative course of action should be pursued and the procurement process cancelled.”

Claire Byrne on RTÉ’s News at One interviewed the minister and asked if he had “wrestled” with the decision to go ahead with the project.

Mr Donohoe paused for a number of seconds before answering.

“Deeply,” he said.

Listen back in full here

Note in full here

National Broadband Plan documents

Earlier: “Seán, You’re Sounding Like A Member Of Fine Gael’s Frontbench”

The Plan: Save Denis

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