THE MINISTER FOR Public Expenditure and Reform Paschal Donohoe was advised by his secretary general that the significant cost increases of the National Broadband Plan would mean that other projects would be cancelled or put on hold as a result.

Among the projects that could be affected by the almost €3 billion cost of the National Broadband Plan (NBP) were social housing, the repair of regional roads, and flood relief plans. 

Documents released today show that as recently as last week, the secretary general of the department Robert Watt and other civil servants advised Cabinet they could not justify sanctioning the €2.97bn for the NBP, and “strongly recommended against” the decision.

The memos released say that five government departments would provide 80% of the total capital spend of almost €3 billion. Using the reallocation of €1 billion as an example of the knock-on effect reallocating funds would have on other areas of government, the memo listed a number of projects that would be affected.

The Department of Housing, which accounts for 30% of the NBP funds, would receive €300m less, equating to cancelling the construction of 1,500 social housing units.

The document warns this could cancel the delivery of the Tralee Wastewater Network (worth €23m) and the Kilkenny Regional Water Supply Scheme (€21m).

The Department of Transport accounts for 20%, so €200m less would be equal to the entire allocation for regional road restoration improvements. 

This could lead to work on the Sligo Western Distributor Road, the Killaloe Bypass, the Dunkettle Interchange, and the Moycullen Bypass being cancelled.

The Department of Education and Skills accounts for 13%; €130m less would mean plans to provide for 26 primary schools, serving 12,500 pupils including ASD units, would be cancelled. 

This would also include €40m investments in Dundalk, Tallaght, and Limerick IoTs that would also be cancelled.

The Department of Health accounts for 9% of the spend; €90m would mean eight less primary care centres. New ambulance bases and deployment points would also be cancelled. 

The Department of Business, Enterprise and Innovation accounts for 8.5% of the total, leading to €85 million less for the department. This would cancel the annual capital allocation for Enterprise Ireland and Local Enterprise Development. 

A further €148m would be could from remaining programmes including flood relief works and prisons, the document says.

In a warning to the Department of Public Expenditure, the memo says: “It is to be noted that the capital expenditure outlined above is to be delivered by government as there is a little or no interest from the private sector in providing these services (other than perhaps under PPP-type arrangements).

In contrast, there is significant commercial investment in the provision of high-speed broadband and this is constantly expanding.

Despite these warnings, the government is continuing with the NBP. Speaking to reporters this evening, Minister Paschal Donohoe said he has full confidence in his general secretary Robert Watt, who was strongly advising against the broadband plan in these memos, and said that no projects would be delayed or in risk because of the plan.

The minister maintains that none of the projects mentioned by his secretary general are at risk due to government proceeding with the broadband roll out.

In Cabinet yesterday, Donohoe said he made a recommendation to his colleagues that from 2021 onwards, a decision would have to be made to provide additional capital funding to fund a period 2021-2025 where much of the cost for the broadband plan will have to be paid.

He added that none of the projects mentioned in the memo will be delayed because of this decision.

Donohoe said current expenditure has grown by 4% per year with economy growing at a far greater rate.

Topping up Project 2040 spending

If the current rate of expenditure is maintained across 2021-2o25, the government will be able to pay for the broadband plan and other projects. 

The decision made yesterday means that the spending for the government’s much heralded Project 2040 will need to be topped up. 

The National Broadband Plan aims to connect the most rural areas in Ireland to high-speed fibre broadband, enabling businesses to become more efficient, and homes to gain access to services at a time when people are being encouraged to carry out errands online.

It has drawn controversy after all bidders bar one (Granahan McCourt) withdrew from the tendering process and after Denis Naughten resigned as Communications Minister after it was revealed he held private dinners with David McCourt, head of Granahan McCourt.

Naughten said of his resignation, that it was “more about opinion polls than telephone poles. It’s more about optics than fibre optics”.

The government approved the NBP yesterday; but it has been accused of rushing through the project to please rural voters, just weeks before the local and European elections on 24 May. 

With reporting by Christina Finn