LAST UPDATE | 26 Jun 2019

TAOISEACH LEO VARADKAR says he is “all ears” about Eir’s claim it can deliver the National Broadband Plan (NBP) for less than €1 billion but questioned whether the claim “stacks up”.

The company’s CEO Carolan Lennon told the Oireachtas Communications Committee yesterday that Eir would still be interested in the contract but that it would have to be on the same model they are using to provide broadband to 300,000 other rural premises.

The government announced in May that it is to proceed with its plans for the €3 billion NBP, which aims to bring high-speed internet to more than 540,000 homes, farms and businesses across rural Ireland.

Eir was among the original bidders for the contract but pulled out of the process and US-based investment firm Granahan McCourt is now the government’s preferred bidder for the contract, which has not been signed yet.

Speaking this morning, Varadkar said that the Eir must answer exactly what they are proposing. 

“The objective here is to ensure that 500,000 homes and business in rural Ireland have access to high-speed broadband at the same speeds and same costs as people in urban Ireland so if this can be done at a much lower cost to the exchequer than I’m all ears,” he said.

But the reality is that Eir was part of this process, submitted an initial bid of almost €3 billion and pulled out citing high risks and too much oversight. So we need to assess now is whether what they are now saying, is a genuine offer, whether it stacks up, and whether a further procurement process will take a very long time, and whether it will be compliant with the EU procurement.

During Leaders’ Questions today, the Taoiseach said a letter has been issued from the Department of Communications about the €1 billion price-tag the company mentioned yesterday.

He added that he did have concerns about the figure, and questioned whether the customers would end up paying more for the service.

Varadkar said he was interested to hear more, but pointed out that the government can’t just hand over the contract to another company, stating a new tender process would have to take place.

Speaking earlier today, Finance Minister Paschal Donohoe said he expects discussions with the company to happen but also raised concerns about Eir’s past involvement in the process. 

“I’d expect that engagement will take place on this matter, yes. I’d make two points in relation to it, firstly Eir withdrew from the broadband process that was underway and they had an opportunity to put forward a proposition but they withdrew from it,” Donohoe told RTÉ’s Morning Ireland programme.

Secondly, after they withdrew from it they then expanded their coverage to a further 300,000 homes, which influenced sort of the process that they had left. But they made a number of points yesterday and particularly what we now need to clarify is what exactly is the kind of coverage, what is the kind of service, and what is the cost of that service that is behind the proposition that they outlined and I’m sure that that matter will be engaged on in the coming days.

Shortly after the government announced that it wanted to press ahead with the plan in May, a tranche of documents were released showing that top civil servants “strongly recommended against” proceeding with the plan.

Asked yesterday whether Eir had raised the €1 billion figure in their tender submission, Lennon said the procurement model used by the department did not make this possible.

“The technical submission was trying to be compliant with a procurement model that the department wanted us to be compliant with,” she said.

“What I’m saying is, if you said to me, ‘here’s a billion euros, go build fibre to the home in rural Ireland tomorrow’, I would say okay, but I will do it on the criteria that I built the 300,000 with. Now that’s not the same criteria that the department wanted for the procurement process.”

Former Communications Minister Denis Naughten has also questioned the €1 billion figure put out by Eir, and also explanations as to why they company pulled out of the tender process in the first place.

With reporting by Christina Finn