Update on National Broadband Plan: National Broadband Ireland

This is our first meeting following the summer recess. I welcome everyone to the meeting, especially our witnesses from National Broadband Ireland, NBI. No apologies have been received. Our session today will focus on the national broadband plan, NBP. The purpose of this meeting is to receive an update on the roll-out of the NBP. I welcome Mr. Peter Hendrick, chief executive officer - infrastructure; Mr. T.J. Malone, chief executive officer - deployment; and Ms Tara Collins, chief marketing officer at NBI. The NBP is of huge interest to this committee and representatives of NBI have appeared before us previously. We hope to continue our series of engagements. Broadband is top of the agenda for many people, particularly in rural areas.

All witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks and it is imperative that they comply with any such direction. Witnesses attending remotely outside of the Leinster House campus should note that there are some limitations to parliamentary privilege and, as such, they may not benefit from the same level of immunity from legal proceedings as witnesses who are physically present. Witnesses participating in this committee session from a jurisdiction outside the State are advised that they should also be mindful of their domestic law and how it may apply to evidence they give.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person outside the Houses or an official by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that in order to participate in public meetings they must be physically present within the confines of the place in which Parliament has chosen to sit, namely, Leinster House and-the Convention Centre Dublin. Hopefully, we will not return to the latter at any stage. It is great to back in Leinster House. Reluctantly I will not permit members to participate where they are not adhering to this constitutional requirement. Any member who attempts to participate from outside the precincts will be asked to leave the meeting. In this regard, I ask any members contributing via Microsoft Teams to confirm that they are on the grounds of the Leinster House campus. Oireachtas Members and witnesses are accessing this meeting remotely and only I, as Chairman, and the necessary staff essential for the running of the meeting are physically present in the committee room. Due to these unprecedented circumstances and the large number of people attending the meeting remotely, I ask for everyone's forbearance should any technical issues arise.

I now invite Mr. Hendrick to make an opening statement on behalf of NBI. As our meeting is limited to two hours, Mr. Hendrick has only five minutes to make his opening statement. We are anxious to ask questions and have a discussion on the issues as quickly as possible.

Mr. Peter Hendrick

I thank the Chairman and the committee for the invitation to discuss the national broadband plan. I am Peter Hendrick, CEO at NBI, and I am joined by Mr. T.J. Malone, who is CEO of NBI deployment and leads the team building the NBI network, and by Ms Tara Collins, our chief marketing officer who oversees all stakeholder and community relations.

Speaking on behalf of Mr. Malone and Ms Collins, who had the opportunity to meet committee members in person out in the field in recent weeks, it has been a pleasure to present first-hand how the NBI network is being deployed. I hope these sessions have been informative and helpful as it is always hard to convey the size, scale and complexity of the NBP without this context.

For this reason, there remains an open invitation to all committee members to experience the work of our teams out in the field.

I thought it might be helpful if I started by providing the committee with an update on NBI’s progress. Our teams have now scaled, with construction active across all 26 counties and over 1,000 people hired, onboarded and working on the project. That includes our key sub-contractors Actavo, Entegro, Indigo, KN Group, Secto and TLI. We are also working with infrastructure operators such as Open Eir and Enet. I would like to acknowledge all the hard work that has been done by everyone involved to date, and the collective commitment to bring high-speed broadband to those that need it most. Across the project there have been major achievements, despite operating for 19 out of 21 months in an environment where Covid-19 has caused unprecedented disruption. More than 251,000 premises have been surveyed, of which in excess of 221,000 are designed or are in detailed design. These activities are a vital precursor and are continuing at pace. It is the survey and design activities that are creating the pipeline for the build works and, ultimately, for premises to be passed. Right now, there are more than 108,000 premises under construction with works under way. More than 20,000 premises are currently able to place an order via their preferred retail service provider. I am happy to say that, as of this morning, that number has increased to 23,000, with the release of almost 3,000 premises in Dundalk. This will rise to 60,000 premises from December.

Since the commencement of the project, there have also been other major achievements outside of the fibre to the home programme build. Some 371 broadband connection points, BCPs, including in schools, have been installed by NBI. With respect to the BCP programme, NBI met its contractual obligations for 2020 in full. Already, the BCP project is having a major impact and will be even more vital as we move into a post-pandemic Ireland. They will facilitate remote working by putting connectivity into the heart of communities in advance of the fibre to the premises roll-out. With BCPs and schools, it is important to recognise that, taken together, we are building a network of over 900 strategic connection points for community use by the end of 2023. We are making progress on the schools programme, with 140 delivered by NBI. We have already announced our commitment to accelerate installations for primary schools in the intervention area. Originally, many of these schools could have been waiting up to seven years. We are delighted to be able to bring this forward and bring next-generation broadband to the next generation. We have also increased our minimum speeds from 150 Mbps to offer 500 Mbps as the minimum.

As the CEO of NBI, I am incredibly proud of the work that our team has delivered, particularly among the turbulent conditions caused by the Covid-19 pandemic. The impact of Covid-19 has resulted in the need to introduce extensive mitigation strategies and re-baseline original roll-out targets. Obviously, the original volume projections were conceived pre Covid, and could never have predicted or accounted for the operational environment created by the global pandemic. If we cast our minds back to the end of last year and the beginning of 2021, which was when NBI was scaling construction work and moving into the final stages of construction for the first deployment areas, there was a sudden and significant increase in Covid-19 cases. The number of active Covid-19 cases increased from 15,000 to 17,000, which was already the highest since March 2020, and then proceeded to hit more than 100,000 active cases by January last. To provide the committee with some context to this disruption to our construction programme, during this second wave of Covid-19 from December 2020 to March 2021 one of our major contractors faced having 40% of its total workforce unable to work at a given time due to Covid-19 cases or personnel being close contacts of confirmed cases. The extreme number of Covid-19 cases at the start of 2021 made it impossible to predict certain elements of the roll-out progress during that period and added significant risk to the programme. This was not just a factor felt by NBI; the pressure was also felt by every one of our subcontractors and other partners. During this second wave, the impact was arguably felt more severely than the first wave due to where we were at in our mobilisation plan. The impact of this disruption meant that by April 2021, we had to re-baseline the plan for 2021, targeting 60,000 premises for year end.

The team is as frustrated as anyone with the fact that the pandemic has disrupted our original plans. The principal objective on which our entire team remains focused is delivering high-speed broadband to homes, farms, schools and businesses as quickly as possible.

As we head into 2022, this will mean finding ways to recover delays to the programme and increase the volume of our completions. In fact, in areas where we were affected by Covid-19, such as surveying, we have already recovered and are ahead of the plan. To underpin all of this, we have contracted with Open Eir to increase the volume of pole replacement and duct repair commencing from 1 October 2021. We have also been working closely with our many tree-trimming contractors to significantly increase the volume of their work, as completion of these two areas of work is required before we can begin to install the NBI network.

I assure the committee that the management team of NBI and our board and shareholders are very positively disposed to bringing forward the overall completion of the project, a goal that we believe is achievable. This principally involves bringing forward the completion timescales for premises currently scheduled to be passed in years 2025 and 2026. Extensive work is already under way, which includes the procurement of additional contractor resources to commence in the fourth quarter of this year to meet the increased output of the Eir “make ready” programme. Other operational efficiencies and experiences gathered from the initial deployment areas can be industrialised to assist with project acceleration, as can the new section 254 licensing processes with the support of local authorities. These plans to catch up and ultimately bring forward completion of the roll-out will continue to mature over the coming six to nine months.

I would also like to provide an update on some specific matters that have been progressed further to requests from the committee. First, with regard to premises in the amber area that are located adjacent to commercial operators' networks in the blue area of the map, NBI is consulting with the market, via a tender process, to identify alternative wholesale solutions. If suitable solutions are identified, they will be provided by third-party operators but would be provisioned, activated and assured by NBI and would be subject to the same contractual service-level agreements, SLAs, as the rest of the NBI Network. The pre-qualification process has been completed for this and we are moving to the next stage of the tender process. We expect frameworks to be in place by the end of the year with pilot implementations to be done during the first quarter of 2022.

Second, we are acutely aware for the need to engage with, communicate with and inform all stakeholders. Central to our marketing activities are two core themes, namely, addressing any information deficit and managing the expectations of end users. A range of marketing, communications and stakeholder engagement initiatives are being deployed, such as targeted door drops, e-zine updates, local press releases, local advertising, our social media channels, in-person information events and county council presentations, to name a few. Specific to the website, NBI’s website is an always-on development and its evolution is built with best-in-class user experience principles, based on research, experience and testing. In particular, recent focus has been on a simplified menu structure and site navigation; simplified frequently asked questions, FAQ, categorisation to make information easier to find; increased use of graphics and iconography; animated videos to explain and demystify some topics; and a new interactive roll-out map displaying anticipated roll-out date ranges for all end users. We also operate a contact centre with dedicated communication channels to assist with queries from end users and political stakeholders. The team strives to provide seamless experiences across all touch points, which includes phone, email and social networks. The role of the contact centre is to provide information on the roll-out of the programme and to register stakeholders for email updates, so that we can keep them informed as the programme progresses and share updates specific to their premises.

Ireland’s NBP is part of a much broader pathway set out by the European Commission to ensure every household has access to high-speed broadband by 2025 and gigabit connectivity for all by 2030. Commercial investments from Eir, Siro and Virgin Media, as well NBI’s deployment to 544,000 premises, is placing Ireland at the forefront of European nations in terms of providing high-speed broadband to 100% of the population. The migration from legacy broadband to fibre broadband is already well under way. The latest ComReg data show that, at the end of the second quarter of 2021, there were almost 309,000 premises with fibre connections in place, out of a total of 2.2 million fixed-line subscriptions, showing an annual growth of 54%. A report published in May 2021 by the Fibre to the Home Council Europe states that almost 56% of homes in Ireland have access to full fibre, compared with the European average of 44%. The same report cites Ireland as the fastest growing market, in volume and percentage terms, for fibre to the premises subscribers.

I conclude by stating that NBI is acutely aware of how vital high-speed broadband has become to our lives. Despite the extreme and turbulent conditions faced during the last 19 months because of the impact of Covid-19, the work of our team provides a platform and gives us the confidence to deliver the project on time, or earlier, and on budget. We welcome the opportunity to take questions from the members of the committee.

I thank Mr. Hendrick. The first speaking slot is for a Deputy from the Fine Gael party. I will limit each speaker's time to seven minutes initially. We see then if we have time remaining at the end.

I will zoom in on two areas. Public representatives are getting queries about broadband provision every day of the week. It is a major issue on the ground. In his presentation, Mr. Hendrick referred to one major contractor having 40% of the total workforce. I read in media reports that this contractor was doing 60% of the work. Is that correct? I also read that the contractor is from the UK. What were the circumstances in which NBI ended up in a situation with a UK contractor doing 60% of the work with 40% of the workforce? Would it be fair to say that if that contractor was not confined in any way during the roll-out, it would then have been possible to have reached the target of 115,000 premises earmarked to be have been in place by the end of this year, rather than the figure of 60,000 which was achieved? When the detail is examined, is that a fair summation of why the target figure of 115,000 has not being reached this year? Would that be a fair comment?

Mr. Peter Hendrick

It has certainly had an impact. There are two different contractors. The UK contractor that we had worked with in recent years-----

What is the name of that contractor?

Mr. Peter Hendrick

That was a company called Kelly Communications, from the UK. It was due to commence activity in summer 2020. It was part of the framework agreement in the context of the building programme and also part of our connections programme. Unfortunately, that company could not bring resources into Ireland because of Covid-19. It is a separate contractor from the contractor that had 60% of the workload. The contractor in that case was KN Networks. They are two different contracts, but both had an impact in respect of the scale of our programme in 2020 and 2021.

Is KN Networks based in the UK as well?

Mr. Peter Hendrick

No, it is an Irish-based contracting company.

It accounts for 60% of the work being undertaken and, therefore, that figure concerns an Irish company.

Mr. Peter Hendrick

That is correct, and that was at the beginning of the deployment. It must be borne in mind that we had 19,000 premises under construction when we came before the members of this committee this time last year and KN Networks then had 60% of that work.

Did KN Networks continue to do 60% of the work?

Mr. Peter Hendrick

We have 108,000 premises under construction now and that work is spread across four contractors. At the beginning of the programme, however, when we were mobilising, we had two main contractors in the first phase. We have now extended that work to four contractors.

What percentage of the roll-out work was Kelly Communications contracted to do?

Mr. Peter Hendrick

In the beginning, for the first three deployment areas, we were going to start with three contractors. It was envisaged that Kelly Communications would have been allocated a third of that work. It did not come into the programme, however, and the second contractor, KN Networks, took 60% of the work that was going to be contracted to Kelly Communications. Ultimately, it was that company that was impacted between December and March regarding resource availability for 2021.

I am trying to get to the reason that explains NBI having achieved less than half of its target for this roll-out. The target set for the end of this year was 115,000 premises. Mr. Hendrick is confirming that 60,000 premises will be completed, which is roughly half of the initial target.

Mr. Peter Hendrick

That is correct.

I am trying to find out why that happened. We know that Covid-19 had an impact, and we are also reading various reports about this situation. When was Kelly Communications supposed to start its work?

Mr. Peter Hendrick

All three contractors were supposed to start their respective work near the end of 2020.

Did they all start at the end of 2020?

Mr. Peter Hendrick

The two main contractors started at the end of 2020.

Which contractors were they?

Mr. Peter Hendrick

They were Secto Services and KN Networks.

Where is Secto Services based?

Mr. Peter Hendrick

It is an Irish-based contractor.

The contractors included Secto Services and Kelly Communications. Secto Services accounted for 30% of the work.

Mr. Peter Hendrick

The original plan was to have three contractors and it was envisaged that each would get a third of the early-phase deployment work.

Originally, then, Secto Services, Kelly Communications and KN Networks were each to get a third of the work.

Mr. Peter Hendrick

That is correct.

The only contractor based in the UK was Kelly Communications.

Mr. Peter Hendrick

That is correct.

Kelly Communications ran into trouble with the impact of Covid-19. When did that company become constrained by the effect of the virus?

Mr. Peter Hendrick

It happened between the middle and the end of 2020.

That is fine. Kelly Communications was supposed to start its work as a contractor for NBI in 2020. Is that correct?

Mr. Peter Hendrick

The company was supposed to start its work in the second half of 2020, which it could not do. As a result, we reallocated that share of the work to KN Networks and the company then accounted for 60% of the building programme in 2020.

When did KN Networks take up that 60% of the work?

Mr. Peter Hendrick

It took up that work in the second half of 2020, when we signed an agreement with the company regarding that additional workload that Kelly Communications could not undertake.

If KN Networks took up that additional work, it was then getting 60% of the work and Secto Services was getting 40%. If those two contractors were in place and both were starting on time, why is the work that it was envisaged would be completed by now down by 50%?

Mr. Peter Hendrick

We are giving an example of the circumstances involving just one contractor and the significant impact it experienced in the last year. However, it was not only that one contractor that was affected. The other contractor was also affected but not on the same scale. Equally, all our partners and supply chains were impacted in the last year. We are just giving an example of the impact on one specific contractor, that had 60% of the workload, to give an idea of the overall scale of the impacts experienced in this context.

What I read in the media is not what I am hearing from Mr. Hendrick. The media reports stated that a UK contractor accounted for 60% of the work and that it was extremely constrained by the impact of Covid-19. What I am hearing today is that the work of the contractor from the UK, Kelly Communications, was taken up by KN Networks. NBI then had two contractors in place, with KN Networks doing 60% of the work and Secto Services undertaking the remaining 40% of the roll-out.

I will ask a hard question. It is not correct to say in that context that the impact on the UK contractor was the reason for the delay in the roll-out. NBI had the contractors in place to take up the slack that arose because Kelly Communications could not carry out its allocated work. I ask Mr. Hendrick to comment on that aspect. I also ask him to tell us when NBI will catch up on its specified targets for the roll-out. Has the Department contacted NBI regarding whether penalties will apply because of the delay in fulfilling its contract? I am interested in finding out when NBI envisages that it will meet its targets. It has a seven-year plan for this project. When will that be published? Is it possible that the time required for this programme can be reduced from those seven years?

I was contacted by person who lives in Limerick, only a short distance outside Lisnagry, which is an intervention area. People there have received an update from NBI stating that the earliest possible date for connections in the context of this roll-out will be between January 2025 and December 2026. Those people are probably looking over their ditches at the existing fibre cable of another operator, yet they are being told that it will take three to four more years to be connected to broadband. Work has been done on the cap intervention areas and on the pilot programme. I will let my colleagues pick up on those aspects.

I want to drill down into the reasons that explain why NBI has achieved only 50% of its target for this roll-out. This is not about a contractor from the UK not being able to do work here. There must be some other reason to explain this situation and I would like to know what it is. I also wish to know when NBI will catch up on the targets set down in its contract. What is the target for the completion of work by the end of 2022? In addition, when will NBI publish its plan regarding its envisaged seven-year programme of work? Can the time required for the completion of the work be reduced? Moreover, there appears to be a low rate of take-up in respect of the line that the NBI has laid to date and the witnesses might confirm whether this is the case.

Media are calculating it is of the order of about 14%. Will you deal with those very quickly? I will let my colleagues pick up on other points and areas that I have not covered.

Mr. Peter Hendrick

I will break it down into sections and allow my colleague, Mr. T. J. Malone, to give you some more detail in terms of the recovery plan, the numbers for 2022 and a sense of the momentum of the build programme. In terms of the impact, and I accept it is not one thing that has delayed the programme for this year, Covid-19 has impacted on all of the supply chain and all of our partners feeding into that supply chain. The UK contractor, Kelly Communications, is just one element of it. Obviously, there is a reprocurement activity that we have to do. We do not just immediately award to another contractor. There is a delay in terms of looking at what the mitigations are and whether a contractor can mobilise and meet the demand of the additional workload. There are many moving parts in terms of all the impacts we have experienced. In March 2021 we sat down with the Department and looked at all of these, and we looked at a rebaseline, and under the contract we considered what reliefs we could get. We had to spend a good deal of time showing the Department all of the things that feed into the delay and ultimately the relief and the changed milestone deliverables for 2021. There is a huge amount of detail in this that-----

Mr. Hendrick, what did you agree with the Department as the new target for the end of 2021? It was 115,000. What is the new target?

Mr. Peter Hendrick

It is 60,000 premises at the end of 2021.

Is that with no fines?

Mr. Peter Hendrick

When there is an impact on the programme, under the contract, if there is means for seeking relief for something that is outside of our control, which Covid-19 was, there is not an associated penalty if you get relief on contractual obligations. In terms of penalty, we do not get compensated for our operational costs and all our overhead costs. In terms of that delay we also suffer the loss of revenue. The contract does not see NBI made whole for some of these delays. Even though we get relief on time, we do not get compensation. I would say the cost to NBI is quite significant in terms of our operational overhead costs and our loss of revenue.

When do you believe you will get back to meeting the targets set down under the original contract? Will it be the end of 2022, or the middle of 2022?

Mr. Peter Hendrick

As of 1 October we have contracted to increase the capacity of the Eir "make ready" work, which will really only start to show fruit towards the end of 2022 into 2023. On the number for 2022 and the plan around that, I am going to pass over to Mr. Malone for more insight, if that is helpful.

What I might do is go to my colleagues and they can pick it up because I am conscious of time. I thank Mr. Hendrick but he will appreciate there is extreme disappointment amongst the general public that we are only half way to where we expected to be. Whereas it was 115,000, it now it is 60,000. That is a disappointment. We want to see how we can assist so that is brought back on course. I call Deputy Darren O'Rourke.

To be helpful, I will pick up on that question to Mr. Malone. How does NBI plan to make up for the lost time, and what assurances can it give that we will not be here six or 12 months down the line, notwithstanding, that we hope we will not have Covid-19 to deal with in the same way. However, there are many moving parts to this project. We hear about supply lines, materials and the workforce. There are two questions. The questions are on the schedule for getting back on track and when the seven year plan will be published, and on assurances that we will not be here again in six or 12 months' time.

Mr. T.J. Malone

I agree with Deputy O'Rourke that there has been a huge amount of work done over the past 12 months in getting to where we are, and getting back on track. If we take this year, we are running approximately six months behind where we would like to have been. Our whole purpose has been about trying to make sure we get back on track and that we can recover that ground and get back into a seven year plan that we are contracted to do. That plan will be submitted to the Department in the coming week, with the timelines on that as well.

If we look at next year's plan, the 2022 plan, that would have seen us delivering somewhere in the region of 90,000 homes for that year. That was the original plan laid out for next year. Next year will see us pretty much back on track on that. We will deliver close to 7,000 premises a month, which gets in about 84,000 homes for next year. We will strive to surpass that, if possible, but that is what we are looking at. That gets us back into the run rate we had originally envisaged, and all the work we are doing at the moment gets us to a point where we start recovering from there. Next year gets us back on to the run rate. From the end of 2022 to 2023 onwards, we then start to eat into that gap and pull it back into the seven year plan. As Mr. Hendrick mentioned earlier, much of the work has been done. We have engaged with Eir on the Eir "make ready" part of it, we have engaged with suppliers to make sure there is no shortage of materials in the market and we are talking with our contractors on a continuous basis, not alone just to pull back the seven year plan, but we are obviously looking to see where we can accelerate from that point and bring this plan in sooner than the seven years. We are extremely confident on the seven years and working to see exactly how much we can knock off that plan and bring in some of those 2026 and 2025 numbers as well.

I thank Mr. Malone. To be a bit parochial about it, and talk specifically about my own county of Meath, I want to ask if NBI has information on, how many houses have been surveyed in Meath in the past 12 months, and how many houses have been connected or have been passed. I am most interested in the number passed. There have been 23,000 to date. How many of them have been in County Meath? I appreciate that there is a network of distribution and of roll-out in terms of regional or local exchanges and the deployment areas, but I am looking at my own county, and huge swathes of it, almost half of it, are not due for completion until 2025 and 2026. Is it the case that all of the deployment areas or the regional exchanges will be operated at the one time? I ask that question in terms of the distribution and the scheduling of areas. Is it the case that we are going to be lopsided for whatever reason, or will there be an even distribution based on the technological constraints? Are there other considerations in terms of the roll-out?

Mr. T.J. Malone

I will take the first part of that. One of the mandates that we had when we sat down to look at the deployment plan at the very start was to ensure that no county was left behind and to bring all 26 counties at the one time. If I was to look at this from a logistical and selfish and from a normal roll-out point of view, you would tend to go into one county, finish that county and move to the next county. From a contractor's and from a sensible point of view, to try to finish, you would do one county and move on. However, because of the nature of this, and we are very conscious not to disadvantage any particular county, we have set out to bring all 26 counties together at the one time. Obviously, different counties have different numbers of houses and premises. If you take Cork, it would be by far the biggest county in terms of premises that fall into the intervention area. Meath would have somewhere in the region of 18,500 or 19,000 homes.

In terms of the initial areas in Meath that we are looking to take on board, we split the country into 227 different deployment areas. Deployment areas are basically what most people would know as an exchange area. Those particular areas could be based in one county. Skerries would be one, for instance, and that could bleed into other surrounding counties. Dunboyne and Clonee would be in the Deputy's area. That would cover premises in Dublin, Meath, and it would bleed into Kildare and surrounding counties. It would cover all of those areas.

On the first ones coming up in the Deputy's area, houses would be served from the Drogheda area and the Skerries area. Dunboyne and Clonee would also be done. All of those are surveyed and designed.

Delvin is another location in the Deputy's area that is being surveyed and designed.

The key for us, particularly in the Meath area, is getting that through the local authorities. In general, local authorities have been fantastic to work with. We have found the engagement with Meath County Council a bit tougher. We have had conversations and recent engagement with the CEO of the council and others. We are moving forward in Meath but we have been slow getting engagement in the county to get the roll-out through. In general, the local authorities are key, as I said. If I were to fast forward to the next two years, 2022 and 2023, we would be looking at approximately 5,700 premises going live in Meath in that period.

Mr. Malone is not the first person to make that point to me about the local authority in Meath. It is an issue which my colleagues and I in the area have picked up on already. How many premises, if any, have been passed in County Meath at this stage?

Mr. T.J. Malone

There are no premises passed and released in County Meath as of yet.

I thank the witnesses and Mr. Hendrick for his opening statement. I read it last night. I am not a technophobe but it was a jargon-filled statement, if he does not mind me saying so. I think I got my head around most of it.

I was the chair of the Southern and Eastern Regional Assembly in 2014. I remember chairing a meeting of 53 councillors from Fingal across to Clare and down to Kerry and Cork. It included basically half the country or more in population terms. It struck me at that meeting, which took place more than seven years ago, that half of the councillors in the room, including those from Dublin and Cork city councils, Fingal County Council and Dún Laoghaire-Rathdown County Council, pretty much said nothing, while councillors in the other half of the room were totally frustrated. Alex White was the Minister at the time. We were promised at that stage that everything would be delivered. I appreciate that was before Granahan McCourt and National Broadband Ireland were involved but it has been a very long wait for a lot of people. As a Senator living in Dublin who represents people from across the country, and who has four grandparents from the country, I appreciate that broadband is as important as electricity and running water. That was the case even before Covid but it is more so now because broadband allows people work in their communities without having to travel and spend hours in traffic on motorways and so on.

I have looked at NBI's website and read Mr. Hendrick's statement. There is a lot in it and, to be fair, the website is quite detailed. NBI is saying the intervention area covers 96% of the land mass but only 23% of the population. Does that mean the 77% of premises in the country not covered are all based in the 4% of the land mass that is not in the intervention area?

Of the total 544,000 premises, 23,000 have been delivered. The roll-out will be for the seven years from 2019 to 2026. At this stage, after two years, less than 5% of the premises have been delivered. I appreciate there is front-loading of surveying and so on. How realistic is achieving the figure of 60,000 by Christmas? By the end of 2021 and 2021, how far will NBI be? There is an enormous amount of frustration. I hear of people who have to drive with their laptop to park in hotel car parks to pick up a Wi-Fi signal. I appreciate the connection points are good but it has taken so long for many people. It is not acceptable from the point of view of the State and members of the public that the roll-out is at this stage. Will Mr. Hendrick address those points first as I am conscious time is short?

Mr. Peter Hendrick

I thank Senator Horkan and appreciate his questions. When I think about the intervention area, it is defined not necessarily by geography but by broadband speeds. When the former Minister, Alex White, announced the plan originally it was based on a 30 Mbps threshold. Any premises that had less than 30 Mbps was deemed to be in need of an upgrade to high-speed broadband.

That map, or the amber area as we call it, was completed after consultation, the final part of which took place in September 2019 when the Department asked all the retail and wholesale operators in Ireland what were their plans in terms of delivering high-speed broadband to every area across the country. It received 180 responses to that plan and, ultimately, the outcome of that was all of the premises that are in the intervention area. The challenge is that they are not necessarily all located in one area. They tend to be in every county be that urban, suburban or rural. The challenge for the network is that it needs to cover a large distance in order to service those premises. Equally, we need to make sure that the capacity and future-proofing of the network meet the demand for the next 25, 35 or 40 years. It was as a result of the mapping consultation undertaken by the Department that we ended up having to look at this from a nationwide perspective. It is not simply in one geographical area. I hope that answers the Senator's question.

On the 23,000-----

I am sorry to cut across Mr. Hendrick. If he is saying that NBI has to target 96% of the landmass which represents 23% of the population, is it fair to say that the other 77% who are not being targeted live on 4% of the landmass?

Mr. Peter Hendrick

This involves the access network. Just because we are building a network, does not mean there are houses all the way along the route that do not have broadband. Some do have broadband greater than 30 Mbps. The premises that do not are the ones we are serving. We have to build the infrastructure to get there. That is, therefore, part of the challenge. We have to build the infrastructure no matter how far they are away.

NBI is effectively having to develop on parts of the landmass that do have broadband in order to get to the places that do not.

Mr. Peter Hendrick

That is correct. The 23,000 premises include those which are available today to place an order. That number is increasing. Every two weeks we update the industry forum. The industry forum includes the retail or wholesale operators that have signed up to sell services on the NBP network. Today, there are 46 retailers that are actively signed up and are looking to sell services on our network. That number increases every two weeks. As we start to build the network, that number will increase.

In terms of the overall count, I appreciate that 23,000 does not sound like a large number. If, however, we look at the forward indicators in terms of getting to a point where we will be able to offer a service, we must consider at what stage we are at with the surveys. We have half the entire country surveyed as of today. Those surveys then have to be designed. We have to check what poles need to be replaced and what ducts need to be repaired. Once we have the designs complete, we then issue them to Eir for the "make ready" aspect of their infrastructure. We are putting cables up on Eir's poles and in its ducts. We need Eir to do what is called a "make ready" programme. It will replace any poles that need to be replaced or repair any ducts. Equally, we have to trim trees in order to put the cables on the poles. There is a whole element of pre-work required. We have designs being submitted to Eir,. In the coming weeks, we will increase those designs. Today, there are 108,000 premises that are actively under construction and work is happening on the ground throughout 26 counties. In the coming weeks - Mr. Malone can go into this point in more detail - we will be issuing contracts for subcontractors in respect of 195,000 premises. One can see the momentum is building and there is a time between when we issue the contracts and when we get homes passed. Those numbers will start to increase very quickly versus where we were 12 months ago.

At this stage, we are at less than 5% delivered. NBI has a detailed website. Perhaps the plan as outlined by Mr. Hendrick could be put on that website so that people can see that X amount are ready now, by December that figure should be 60,000 and by next March it should be 90,000. It could include the 108,000 premises referred to and the 195,000 premises that are going into the system. People in each area need to know this. Counties like Longford have 8,000 premises but Dublin has almost 14,000. The point was raised that Cork, with 80,000 premises, has the largest number. Every single premises houses a family. These are people who could work from home and those who are trying to run businesses in rural Ireland, where businesses are needed more than anywhere else.

I have one final question as I am conscious of time. On the cost of the investment, I appreciate that some people call it a cost while others call it an investment. I regard it as an investment in the areas that need it most.

There will be 544,000 premises between schools, farms, homes, business premises and so on. How much does that work out at, roughly, per premises in terms of the cost of State investment?

Mr. Peter Hendrick

I appreciate the question. Unfortunately, I cannot give a specific answer here today because there is not one premises the same. We can come back to the Senator with the details.

I am not looking for a cost for each of the individual 544,000 premises. Clearly, it is a national network. Delivering post to a very remote location costs more than delivering to an apartment block, and it is the same with electricity and so on. I am looking for the average cost, that is, the total cost of the programme divided by the total number of premises. What is the cost?

Mr. Peter Hendrick

We can come back with some details. What I would say is that the cost in the first number of deployment areas is in line with our budget expectations. As well as passing homes, we are also connecting homes. We are in a good place from the perspective of the cost of the project. On the Senator's point regarding the website and communications, it is important that we are saying today that we are very confident in the programme. Given what we have done to date in terms of the build programme, the connections programme and the take-up, we are very confident today in terms of the programme coming in on time and on budget. Our real focus now is on the recovery from 2023 onwards in terms of bringing that six-month delay back in, and also in terms of acceleration. In the meantime, we can come back with some numbers.

To clarify, of the 227 areas that NBI has broken the country down into, only 33 of them have commenced. Is that correct?

Mr. Peter Hendrick

We have issued 33 to contract. I will let Mr. Malone give a bit more detail on that.

Mr. T.J. Malone

From a construction point of view, we have started construction in about 25 of those deployment areas and 40 of them are contracted with contractors. There is a great degree more and we are surveying at the moment or have completed surveys in approximately 90 of the deployment areas. For the actual construction part, we have done or started on 25 and we have 40 contracted at the moment, which brings us to 145,000 premises. We have run the tenders for the next 50,000 premises, which brings us up to 62 deployment areas. Those tenders have been run, they have come back in, the evaluation process has been conducted and we are now ready to sign contracts in the next two to three weeks with those contractors for the next 50,000 premises.

I thank the witnesses for their contributions. I can see there is a lot of work being done but, clearly, time is of the essence. I ask that the website is updated with as much information as possible with regard to the plan.

Thank you. I call Deputy Joe Carey.

I confirm that I am in my office in Leinster House. I thank the witnesses for coming before us today and for their continued engagement with the committee. I want to recognise the fact that I was on a field trip with Mr. Malone, Ms Collins and some more of the NBI team in parts of County Clare like Cratloe, Meelick and Ardnacrusha. It was great to see on the ground the issues NBI encounters on a daily basis and great to get an understanding of the issues, where the pinch points are and the type of work that NBI does to make this enormous project a reality. It would be beneficial if this whole committee went out and saw on the ground the type of work and the challenges that are posed. Coming away from that day, I had a deeper understanding of that work, and I thank the witnesses for that. I thought it was a very good exercise and perhaps, as I have suggested, this committee should seek to have such a field trip in the future.

There is disappointment with the level of progress. Obviously, Covid had to have a deep impact on the type of work NBI is doing. It is encouraging to hear that NBI is determined to make up the six months it has lost and it is good to hear of the work it has put in place in the gap intervention areas, which is one of the issues the committee homed in on.

Will the witnesses elaborate on that type of work and when they expect we will see the outcome of that work in terms of pilots? I notice the witnesses were calling them clusters and reference was made to identifying these clusters and going in to address the issues. With regard to Cratloe, I made representations and I know NBI is advancing a solution for a particular road there, which is very welcome.

In regard to County Clare, as Mr. Malone described it, the project is coming out from the exchange in Limerick and building back into south-east Clare and east Clare, then going back into areas like Shannon, Newmarket, Ennis and Clarecastle, as well as west Clare and north Clare. It would be advantageous if the witnesses could explain to the committee, which is a public forum, why it needs to be that way, why these delays will happen and why the scheme is to be built in a particular way. They might also explain how many houses in County Clare have been surveyed and how many connections will be made by the end of this year and into next year.

The issue of the gap intervention areas is a very pertinent question given NBI is proposing a pilot by the first quarter of 2022.

Mr. Peter Hendrick

Absolutely. When we take the intervention area as it stands today, we start with approximately 537,000 premises. When we talk about what we call infill, some of those are premises that are currently amber premises. We have defined them in terms of how we are looking at it from a solutions-based approach. We define them in terms of adjacent infill, where they are next to what we call a blue area, where there is a commercial operator, or urban infill, where premises are more urban but there is not a commercial network providing a service today, and then rural extension. As part of the procurement process that we have under way, we have engaged with a number of infrastructure providers to see how we could extend parts of our network and their network in terms of finding a solution. It helps us to also focus on the wider roll-out plan and the acceleration plan.

That is under way at the moment. We have gone through pre-qualification to see if each of these infrastructure providers can meet the contractual requirements in terms of service obligations, future-proofing and the SLAs, and we have had a positive outcome from that. We are going through that framework process over the coming months and we will have a pilot early next year. That pilot is to test that all of the technical pieces work and also the integration between our software systems and their software systems, where appropriate. Quite a lot of work has been going on since the beginning of the year to look at this.

In addition, to answer the question around some of the additional premises that come in later on, we are now approaching almost 550,000 premises on the map. Some of that is because of GeoDirectory updates, where new premises have been added into the map, and there are also premises that are not getting 30 Mbps, whether it was because their commercial operator thought they were going to build out the network or that they simply are not getting the speeds the commercial operator thought they were offering and, hence, they are coming back in through the work of our team, through the work of Deputies and Senators and also through feeding into the Department of the Environment, Climate and Communications. Those numbers have grown so at all times we are evaluating solutions in order to fill all of those requirements for premises that we can connect into networks locally or premises that have been added in. There is a constant evaluation of new premises in terms of the programme.

On Mr. Malone's side in regard to the roll-out programme, he is very much focused on the larger-scale project, getting the plan to where we can recover from the delay of Covid, and also identifying what are the key enablers that we can do in terms of accelerating that plan. Hopefully, I have answered that question and Mr. Malone can give a bit more detail on the sequencing of the build programme.

Mr. T.J. Malone

To give some background on the sequence, as Mr. Hendrick said earlier, we have 47 different service providers that have signed up for us, which is a huge number of service providers. We are acting as a wholesale provider. We are not a retail service provider. We basically build the motorway and they come on it. We hand over our traffic at a point where we can meet all of the different bodies.

We have two different data warehouses located in Dublin where all the different service providers come into. At that point in time there is a single point where we can hand over all the traffic that comes back off the network. From there, we buy dark fibre that is already in place and which goes all the way out to what we call the regional exchanges. They are the first ones that are in place to get up and running. They serve as the core focal point of the first deployment areas. There are 33 of them all around the country. They are the first ones we need in order to get the speed into getting the roll-out commenced in the early stages. From there we then build out. It must be contiguous, so you go from one to the next and so on. If you build a particular deployment area that is not in sequence and it falls out of sequence and does not have a connectivity back to the previous one then you just do not have light. Light does not travel to it and you end up with what we call a stranded asset, or a set of houses are built, that look great and all the network is in place but we cannot actually provide any service to them. That is the nature of why we must build out in the sequence we are doing. As I said earlier, you could potentially go into a county and build all of the county out faster in a contiguous way and go clockwise and anticlockwise doing that, but we are trying to bring all 26 counties together across the entire country. That is the reason. I gave an analogy the last time around that it was like having a Christmas tree with the light at the top but if you cannot plug it into the socket at the bottom then you cannot get light to it. That is basically it. You have to work in a pattern the whole way up. Included in all that, we must build in resilience. Our operating service level agreement, SLA, here is that we are in operation 99.95% of the time. If for any reason there is a break in the network we must be able to minimise the disruption, minimise the number of houses affected and reverse the path back to the other areas. We are constantly building backhaul and contingency into the plan. That is the sequencing and that is why we are going through with it.

If we go back to County Clare itself, we probably have somewhere in the region of just over 10,000 premises surveyed in the county at the moment. The first of those premises will be coming live in October, November and December. They will be fed out of the Limerick deployment area. We will have somewhere in the region of 1,640 premises that will go live within the coming weeks and months in County Clare. The ones that follow on from that are a few premises coming in from Gort, and then Kilkishen is the first main one located in County Clare itself, followed by Corrofin. By the end of 2023 we are looking at somewhere in the region of 5,500 premises up and running, with Corrofin coming in just after that as well.

I welcome NBI coming before us and its ongoing engagement with the committee and with some of us as individuals in our own constituencies. Obviously we had delays due to Covid. The 114,000 figure was re-baselined and we are looking at 60,000 this year. One of the requests the committee put in was that we would have a complete plan for the entirety of the seven-year programme. I believe that is done now. We go on the website and we get everything. Does that include the catch-up on Covid delays?

Mr. Peter Hendrick

That is correct. It is a seven-year plan so it assumes we are catching up but obviously our desire is to improve beyond that.

In what time period would we catch up on those Covid delays?

Mr. Peter Hendrick

Initially we have spread it out over the seven years but our ambition and belief is we can start that earlier in 2023.

Mr. Peter Hendrick

We can start to do that recovery from 2023, correct.

By what date does Mr. Hendrick hope to complete it, roughly speaking?

Mr. Peter Hendrick

Our ambition is obviously to accelerate, which means we must catch up earlier. That is the work we have got going on at the moment. We contracted Eir to increase its output from the first of October and that is phased over 18 months. Eir is going to increase the number of poles and the number of ducts it is going to repair. Over the course of quarter 4 this year we are engaging with contractors around their ability to mobilise more resources to increase into 2023 to recover it. We will have a better sense over the next six to nine months of what that recovery and acceleration plan looks like.

That is okay. At that point NBI will be able to give detail on this.

Mr. Peter Hendrick

Correct.

Are we still operating on the basis of the greater acceleration, which I think we are all considering at this stage to be a seven-year plan becoming a five-year plan? Is Mr. Hendrick talking about that being complete in the sense of the plan being in place by the end of this year and everything being done on a contractual footing?

Mr. Peter Hendrick

Right now we are focused, with the Department, in terms of contractualising for 2022 on the basis of what we call the "known knowns" of our contracts with our subcontractors and also with Eir. In parallel we are working on the increase in volume from Eir. We have that contracted now. We contracted it during the summer. That kicks off on 1 October. Then there is the procurement activity we must undertake. We are ahead on surveys, we are getting ahead on design and all that will feed into the volume we need to contract with our subcontractors. At the beginning of next year we hope to be in a position where we actually understand what the recovery looks like from 2023 and what our plan is for bringing some or all of the deployment areas forward from 2026 and obviously 2025. I am not sure it will necessarily be contracted early next year but we are working with the Department on all the enablers to ensure we get to a position where we can bring forward those deployment areas in 2025 and 2026.

All right, but within the next six to nine months NBI will basically have those two pieces of work done. I am referring to the catch-up on the Covid delays and then the acceleration whereby we are looking at seven years becoming five.

Mr. Peter Hendrick

Obviously, that is an ambition. We will know better when we look back at the feedback from all of our supply chain and all the materials suppliers and contractors feeding into that programme.

It is vital that the information, as best as NBI has it, is constantly updated on the website in order that people can see how long they are going to be waiting for the roll-out of broadband. There is a requirement on Government to ensure that people are offered alternatives in the short term and that it assesses and ensures what the best is for those people because we all know the realities that exist in some areas and the absolute necessity of broadband connectivity.

I welcome the work that has been done on capacity regarding contractors and what have you but if we are talking into the future about this acceleration, NBI will need to ensure that it is already dealing with contractors on whether they have the capacity. I assume it is also dealing with Eir and ESB Networks in the context of ensuring that they have the capacity to be part of that acceleration. We are talking about improvements in dealing with local authorities with the section 254 guidelines, but is there a need for a greater level of capacity within the authorities? Mr. Malone spoke about Meath County Council and certain difficulties. What can we, as a committee, do to improve that work? I am aware that there were also difficulties in dealing with CIÉ and others on crossing their lands and so on. Where does that matter stand? Has the engagement improved and are we close to a solution?

Mr. T.J. Malone

Maybe I will take this one, if it is okay. Beginning with the question on local authorities, I will explain section 254 for people listening. When we set out on this project, a number of new telegraph poles needed to be put up in order to allow us to build our network across the entire country. We use as much existing infrastructure as is in place but it still requires an number of new poles. We set about getting a standardised set of guidelines in place with each of the local authorities. At that stage, we engaged with the County and City Management Association, the road management office, the Local Government Management Agency and the Department. We brought all parties together to get an idea of what good looks like because the thing you need more than anything when you are rolling a programme of this scale is predictability and fluidity for our contractors in order that we can predict with certainty that we can work when we go into a particular area. It is no different from building a house. When you put in your foundations, you need to know that your bricklayers are coming next and when your plasterers, roofers, etc., are coming. We are exactly same, only we have polers, cablers, etc., coming.

The biggest concern we had was that the local authority in County Galway would have one set of guidelines and that the authority in County Kerry would have a different set. We have engaged with them and that has now been agreed and is in place. It was signed off on and introduced by the Minister at a large forum involving more than 200 members of planning sections within the local authorities that was held on 5 May. The introduction of it is now starting to take place. Like anything, it takes a little while before it beds in with all the local authorities. In general, the local authorities are all extremely engaged and see the importance of this.

They are working very well with us to get this. Obviously, we are tight for resources.

Are there any asks in the context of the planning permission difficulties and so on that existed before or is NBI reasonably happy in that regard? Will more capacity be required in the future to deal with an acceleration of the broadband roll-out?

Mr. T.J. Malone

The ask at the moment relates to the competing priorities local authorities have with regard to planning. When we go in, we are competing with these priorities in every local authority that is under time constraints. The Departments of Housing, Local Government and Heritage and the Environment, Climate and Communications are working together to legislate for a timeframe in this regard. We are all working together to get that done. I believe it will be done later in the year. The first thing is to ensure that a timeframe is in place for applications for section 254 licences to put up new poles. The Department issued a circular on 18 August. This went out to all local authorities and the planners within them and said that, while we are waiting on the legislation, applications for licences relating to the national broadband plan were to be given priority. We are starting to see that across the board. As we start to build and accelerate-----

Could I just clarify one point? Does the planning permission issue with local authorities account for much of the delay in the roll-out to date? Would it make sense for local authorities to set up dedicated units to deal exclusively with these matters? I presume NBI is seeking road opening licences. That all falls under that category. How big of a component of the delay in the roll-out was the absence of a structured arrangement with the local authorities? Would it make sense for each local authority to set up a dedicated unit to allow planning applications relating to the roll-out to be fast-tracked? Would that speed up the process a great deal?

Mr. T.J. Malone

While it has not specifically delayed us, it has put a great deal of pressure on everybody. It has put a massive amount of pressure on our side. We have had to resurvey and redesign certain areas to accommodate the guidelines that came out. It is also putting massive pressure on the local authorities to get through backlogs quickly so that we can proceed on time. It has not specifically delayed the roll-out but, to answer the Chairman's second question, we should definitely have a dedicated resource for the national broadband plan. I believe that it where Deputy Ó Murchú was coming from as well. It is not just our licences that are being processed. The authorities are processing licences on behalf of NBI, on behalf of Eir for its "make ready" works and on behalf of our contractors to allow them to carry out work on the ground. They are not only processing applications for licences for poles, but also applications for road opening licences. There are two parts: the road engineers and the planning departments. When you go to the local authorities, you are also dealing with municipal districts so you could be dealing with four or five different people when you are dealing with one particular application for a set of poles. To answer the question in short, if we had dedicated resources within each local authority that could handle our licence applications and process them in a timely fashion, it would be of great benefit to us in attempting to complete this plan in less than the seven years.

That is something we need to chase up. Could we finish up by dealing with CIÉ and possibly even Transport Infrastructure Ireland, TII, and others?

Mr. T.J. Malone

I will take CIÉ first. There will be somewhere in the region of 664 or 665 crossings across the entire 227 deployment areas over the coming years. These crossings may be overhead or underground. It was important to get an agreement in place with CIÉ from a commercial point of view, a technical point of view and, above all, a safety point of view. We spent several months getting such an agreement in place and I am glad to say that we are now in a position to sign. We had a meeting last week at which all the final bits and pieces of the terms and conditions for the master agreement were agreed and the agreement will now be signed in the coming days. We will then apply for each individual licence we need as we go forward.

One of the issues we have had with TII and the national roads infrastructure is that, if you apply for a licence in respect of part of the national roads infrastructure and there is already a licence in place, you cannot get a licence until the previous licence has been closed off.

That other licence might have nothing to do with our project. It could be for something else that is happening, whether it is a local authority, Irish Water or somebody else bringing something down a national road. In fairness, TII has come to the party with us. We have had a trial taking place in Blessington for the past couple of weeks whereby we have concurrent licences open. We are doing that a view to extending the practice across the rest of the country.

We might need a follow-up note if there is a requirement on us to do some chasing up on that issue, but I welcome the fact that there is a pilot in place.

I assume I am out of time. Unless somebody else wants to ask a question-----

I thank Deputy Ó Murchú -----

-----in respect of the roll-out in County Louth, I will take this opportunity to welcome the fact that Dundalk got a mention at the beginning of the meeting.

When Mr. Malone is dealing with other counties, he can deal with Louth as well.

I appreciate that.

I confirm that I am in my office in Leinster House. I thank Mr. Hendrick, Ms Collins and Mr. Malone for being available and for engaging with us in our meeting today. They were also available earlier in the day and I took the opportunity to meet them briefly in Buswells Hotel. In particular, I thank them for taking time to travel around the country over the summer and meet with members of this committee in their constituencies and walk us through situations in which broadband is being installed. That was very welcome. It is best practice engagement. Forgive me for saying this, Chairman, but the chief executive of Aer Lingus is running away from the committee while we have another entity here that is running to engage with us. This is what our committee would like to see from all bodies with which we deal.

The NBI website has been improved and there is much more information available. That information is more localised in nature and allows people to drill down in terms of what they want to access.

I have a number of questions. My first question would be applicable in respect of any part of the country in which NBI has crews at the moment. When NBI came to Clare, we could see where cables were being brought above and below ground. I was brought into a housing estate where substantial works were required in terms of ducting and installing additional chambers. There were some significant civil engineering works involved. If that was the case in one housing estate in Clare, when it is replicated throughout Clare and the remainder of the country, is that a factor in pushing up costs for NBI? Was this factored in by the company when it submitted its initial bid?

Mr. T.J. Malone

The survey is the key thing for us. When we go out to do a survey, we identify the amount of work that needs to be done. In the area to which the Deputy referred, we needed to put in stand-off chambers. If we survey an existing Eir chamber and there is not enough room to locate our equipment within it, we have to build what we call a stand-off chamber - a chamber beside the existing chamber - into and out of which we can bring cables and in which we can locate our equipment. All of that has already been factored into our costs. Ours is a fixed-price contract with the State. All of those matters have been factored in. As Mr. Hendrick alluded to, in the first three deployment areas that have been completed, we are able to go back and check to see that we are coming in on budget in the context of what we predicted. The work that was done upfront early on is now paying dividends. As the Deputy quite rightly said, there is a significant amount of work involved. We estimate that somewhere in the region of 12% to 14% of the infrastructure required for this project will be new, whether it is poles, chambers, ducting or whatever.

I thank Mr. Malone. The important takeaway for us and for the public is that this is a fixed-price contract and that NBI will come in within the price range agreed. As was stated earlier, the ambition is to pull this back from being a seven-year roll-out to a five-year roll-out. People in the rural extremities of Ireland would really appreciate that.

The next question for Mr. Malone also refers to the day in Clare and our visit to a level crossing. NBI explained how the live broadband cable went down the road and then stopped. There was a whole rigmarole in the context of getting it across the level crossing to continue onward. Significant licence arrangements are required by NBI with Irish Rail and other entities. Can Mr. Malone elaborate on how that is progressing?

Mr. T.J. Malone

We have had lengthy discussions with Irish Rail and CIE over the past number of months. We have been working with them for the past six or eight months.

As the Deputy quite rightly said, where we are crossing a live railway, safety is paramount, as is making sure we and our contractors take all of this into account. CIÉ must have the appropriate oversight from an engineering point of view to make sure when awarding a licence that everything is very clear and that all of the criteria and documentation needed are there and accounted for at the time.

We have been working with CIÉ over the past months to make sure we can put in place a master agreement. The Deputy must understand this is a project that has never been seen before. The terms and conditions CIÉ may have had with other operators in the past and which may have worked will not work for a project of this scale and this size. We have been working extensively with CIÉ in recent months to try to get our service level agreements and that we get the proper documentation put in place when we apply for licences on how it would work and how CIÉ could work at speed with us. We are glad to say we are finally in a position whereby both parties are happy and in the past week we have reached an agreement. It will be signed and put in place in the coming days and we will then start crossing CIÉ lines.

That is very good to hear. I presume this will speed things up. Obviously these are initial teething problems but if licences are in place the problem in Cratloe should not be replicated elsewhere in the county or country.

Mr. T.J. Malone

That is absolutely it. As I said earlier, for a programme of this scale and size and for the contractors it is all about fluidity. It is about us getting on the ground and making sure we can do the work when we are there the first time instead of having to parcel premises into deferred areas and then come back. Our ambition is to get as many premises up and running and turned on as quickly as we possibly can. The Deputy made reference to people looking over fences at other people. There is nothing worse than having to walk away and leave a few houses stranded over something simple. I am glad to say we are in a position to keep it moving.

I thank Mr. Malone. In general, where is the roll-out at in County Clare? I have seen the teams working on the ground. In my locality not a day goes by without one of the vans passing on the road. Everyone is anxious to know where the roll-out is at in County Clare and what timelines we can expect in terms of the network being live and available to homes.

Mr. T.J. Malone

The first 1,636 premises will be released in Clare over the coming months. As I said when we came before the committee previously, each deployment area is further broken down and split into ribbons. Each ribbon has a number of houses in it. Each ribbon of fibre might have four or five different ribbons within it depending on the size of the deployment area. The first deployment area serving houses in Clare is fed from Limerick and it has a number of ribbons. They will start to be released from the end of this month onwards. In October and November we will see premises in Clare come live for the first deployment area, comprising 1,636 premises. The next one we will see is Gort and we will then see Kilkishen, which is the main one. This will be somewhere in the region of the first or second quarter of 2023. By the end of 2023, we will have approximately 5,500 premises covered and released in Clare. At present we have approximately 10,000 surveyed.

That concludes my questions. I thank the witnesses for their engagement. National Broadband Ireland is the first entity I have seen that has gone beyond the committee room and gone down on the ground to see what is happening and engage with members there. All of the questions I had have been asked with regard to looking into chamber holes and looking up at polls along the roadside. This is practical stuff. I had a pretty dull list of questions because all of the questions I needed to have asked about County Clare were answered in County Clare. This should be a lesson for all other entities coming before the committee. We are a lot happier and have many of our questions answered with this high level of engagement. I thank the witnesses.

Mr. T.J. Malone

I thank the Deputy.

On that note, we are delighted to have National Broadband Ireland in before us. The CEO of Aer Lingus, Lynne Embleton, came before the committee and we welcome her continued engagement. I want to put this on the record.

I welcome our witnesses. This is a huge contract. It is a massive undertaking. It is very complex with regard to technology and logistics. I thank the witnesses for their willingness to share information, to engage with us and to keep the public informed of progress.

I do not have to state it, but the performance and delivery of NBI is crucial to the lives of the many thousands of people who require high-speed broadband. It is also vital in terms of our ability to grow the economy, particularly in the context of an emphasis on regional development. As a Deputy who represents a rural constituency, I know the lack of broadband connectivity is having very negative impacts on the ability of rural communities to remain sustainable. As a result, the work of NBI is absolutely vital.

Mr. Malone made two big statements. He indicated that NBI may be looking at recovering the time that has been lost due to the Covid delays. I ask him to confirm that is what he is saying. He mentioned that, under the contract, NBI has relief on time. In other words, it is contractually bound to deliver within a specified time but, because of the impact of Covid, it will get some relief in that regard. It hopes to make up that time, however.

Mr. Malone also mentioned that it is a fixed-price contract. All those who are in business are aware that there is currently a shortage of materials. The cost of materials has increased. In some instances, manufacturers and suppliers are taking advantage of the Covid shortage to hike up prices. Is Mr. Malone saying that those cost increases have to be covered by NBI and will not be passed on? Are they covered under the existing contract?

There is massive frustration and, at times, anger in rural Ireland when people see that their neighbour across the road or a short distance up the road has broadband but they do not. There are gap areas. At previous meetings of the committee Mr. Malone undertook to look at this and see how NBI can contribute to bringing a service to those people who are caught in the gap areas. Can he indicate the timescale in terms of the progress by NBI on this matter? Is NBI getting co-operation from the other networks in terms of assisting each other to provide that service?

Finally, the natural question for me to ask is what level of engagement and co-operation is NBI receiving from Tipperary County Council? Mr. Malone does not have to answer that today but if he can, I would appreciate it. Across Tipperary, how many houses have been surveyed and how many have been passed and released? When does Mr. Malone expect numbers to be connected?

Mr. T.J. Malone

I will hand over to Mr. Hendrick to deal with the issue of the gap areas. The Deputy made a number of other points that I will address. The Deputy is right in what he heard in respect of making up the lost ground. We are currently six months behind on the programme but it is absolutely our intention to make that time up and bring it back within the initial seven-year plan. That is our intent and it is absolutely what we are planning. We are very confident that we can do that.

As regards materials and the rise in the cost of materials within the contract, I refer to the overall envelope of subsidy that has been allowed for this project. Any increases above and beyond that entire subsidy fall to NBI to cover. Likewise, the Department has inserted a clause whereby it has the ability to recoup from NBI savings resulting from reductions across the board in materials, etc. There is a robust contract in place to cover those matters.

In the context of Tipperary, there are approximately 29,500 properties in the county. None of them have yet gone live or been passed but several projects are under construction and will be going live towards the end of this year or at the start of next year. These include Tipperary town and its perimeter deployment area, as well as Clonmel, which is coming under construction, and Roscrea. There are several areas where work is under way. Tipperary is probably well served from that point of view. We believe that approximately 10,500 premises in the Tipperary area will be passed and ready for service by the end of 2023.

As regards engagement with Tipperary County Council, we have found it very good to deal with, as has been the case with the vast majority of local authorities.

We have found no issues there at all. This is also the case with the majority of people, who are open, helpful and looking to see how they can speed things up with us.

Mr. Hendrick might make a comment on the intervention areas.

Mr. Peter Hendrick

On the Deputy’s first point, we are aware of the importance both of getting this network built and of making sure that it is a reliable service that is at a price point equal to customers living in more urban areas. Therefore, a critical part of our project and the contract is to ensure that it is of equal service to anyone who is in an urban area and has an equivalent fibre-based service.

On the deployment plan and its impact on people who live close to other networks, obviously we are deploying this across all 26 counties and it is difficult to meet all demands at any one time. Hence, we looked at two things. The first was how we approach infill premises. These are premises that are close to what we call the commercial areas. These premises are in urban areas and could be connected to networks today if we had a contract in place with certain operators. That is under way at the moment. We have a pre-qualification framework in place, as I said earlier on. We will put that in place at the end of this year, with pilots early next year. I hope this will resolve the challenges that a number of people face today with broadband.

It has been helpful to have 46 of the retail operators signed up to the NBP programme and connecting to the NBI network. This means we are getting a great adoption of customers, particularly with some of the wireless operators. Some of their customers are transitioning from wireless to fibre. The net impact is that they are freeing up capacity on their own network. This means that retail operators are delivering a better service to customers who may not fall within an area that we cover today but who are just outside it. A number of operators have come back to us and told us the customer experience has been fantastic. This is on foot both of just connecting to our network and the ongoing delivery of 500 Mbps, which has been transformational for people's lives, and because it has freed up a significant level of capacity on the network, particularly for people who are working from home and who utilise a lot of video content. This is a combination of our deployment in every county, the releasing of capacity on legacy networks that probably are finding with Covid-19 the increase in demand of bandwidth has had an impact on the services they deliver and the infill review we are doing with wholesale providers.

In terms of the contract and relief, obviously we have relief for the 2021 plan in respect of what we experienced with Covid-19 and our supply chain. However, it is critical from our perspective, as well as that of the Department, that we put all of the enablers in place including all of the contracts with our suppliers, with Eir and with our subcontractors, to recover from that delay. Certainly, that is our focus from here until the end of 2022 in order that we can start showing the acceleration of the plan towards the end of the project.

We will now move to Deputy Matthews, who has seven minutes.

I thank the broadband team for their attendance. Deputy Cathal Crowe referred earlier to the time the witnesses gave to members to travel around our various constituencies to look at the installation on the ground. We got a sense at first hand of some of the difficulties the team is encountering, such as collapsed ducts, networks legacy issues, knowledge of where these ducts go and all the other stuff that goes with it. This was quite helpful. I was also pretty impressed with the standard of installation. Many years ago, I did a bit of work on fibre when it first came in. I, therefore, kind of understand the complexity of that project that the team has taken on, as well as the complexity of the cable installation, management, all the other issues and bespoke situations in which they will end up and all the other factors that can complicate an installation like that.

I will follow up on Deputy Lowry. The witness spoke about capacity release, where people have signed up and where the connection may be releasing capacity on other networks. Does he have feedback from people? People often say to me: "I should be getting 30 Mbps here but I am only getting 5 Mbps, yet I am outside the NBI so what can I do?" Is it those people for whom we are seeing some capacity release?

Mr. Peter Hendrick

I will give the example of a wireless network. There is only a certain amount of spectrum available to provide services to a number of customers. Obviously, if one develops or designs the network to service 1,000 customers, for example, there is a shared amount of bandwidth available to the 1,000 customers. One particular operator in Cavan has found that by customers migrating onto the fibre network, the number of premises that are connecting to the network has reduced. With the increase in bandwidth from people working from home, there were challenges in meeting the demand. What has happened now is that as the operator takes customers off and they are on fibre, it has freed up additional bandwidth. Ultimately, therefore, one gets a better balance of customer experience across the fibre and the wireless network. These are homes that fall outside the area we are servicing. They might be connected from a base station within our area, but they ultimately fall outside the area in which we have built the network at that given time.

When NBI passes premises and it is up online and people can see that their house is passed now, and I know as part of that survey and installation work NBI is looking at the last 100 m, 50 m or whatever it is into a property and everything that is required to get the fibre into the house, typically what is the time between a house being passed and somebody getting the fibre if he or she applies for a connection?

Mr. Peter Hendrick

Our standard connection lead time is within ten working days. In order to achieve that we have had to do many things, and surveying is a critical part of that. We are surveying what is involved in the connection. We feed that into the design. Then there is the scope of works that is required to complete that connection. Is it the installation of a pole or do we need to go underground? How many metres of cable are required and what type of installation is it? How many crews are required to complete that installation?

When we receive an order from the retail operators through our software systems directly from their software systems and feed that back to them, they get all the information, for example, the type of order and it requires a timber pole in somebody's driveway or in a field to connect the house, it might be 150 m of cable and will require two contractors on site and will take four hours to complete the job. The end user has a complete view of what is going to happen. We are glad to say that of the connections we have completed to date, we are at a very high what we call "net promoter score", which is unseen today in the telecommunications industry. We are at 92%. Of all the connections, it is very high. Ultimately, we want that to feed into the in-life performance from a reliability perspective. As a result of the work we have done up front - survey, design, the scope of works and the bill of materials in terms of the installation - and feeding that all the way back so the customer knows the day we are going to turn up, how many people are required to do the job and how long it is going to take, the customer experience is very high. Ten working days is our standard installation.

It is worth noting that it is the pre-survey work that NBI does which is helping it to deliver that. That is an impressive part of the overall project. Finally, could the witness provide an update on Wicklow? I know that NBI is quite advanced in Kilcoole and Blessington and that other areas are going through the design stage as well. If he has time, Mr. Malone might offer Deputy Ó Murchú an update on Louth. One of our Green Party representatives there, Anthony Murphy, would be interested too. If Mr. Malone could outline the position in Wicklow and Louth, in that order, we would appreciate it. Somebody can let Deputy Ó Murchú know what is coming.

Mr. T.J. Malone

That is no problem. As the Deputy said, Kilcoole is the furthest advanced at present. There are almost 2,000 premises in Kilcoole. We see all of Kilcoole being released back into the market as being available for service by December this year. We are hoping that it will start in November and bleed into December, but the 2,000 premises in Kilcoole will be available by December. We are also building out in Blessington. Blessington is one of those deployment areas that is quite large and spans a number of premises from a build point of view. It comes into the Kildare jurisdiction and also comes into south Dublin.

It comes into the back of City West, etc. There are approximately 1,400 premises in the Blessington area or in the Wicklow area. We have a number of ribbons there. We are working on the first four ribbons within Blessington to try and have them ready by the end of this year or in early January. The Blessington project is well advanced and making good progress. The next ones to come after that will be Redcross and Enniskerry. Both of them have been surveyed and designed, and will be part of the patches we are releasing in the next deployment areas once they go into construction.

If it is acceptable, I will jump back to Deputy Ó Murchú's questions. There are in the region of 8,800 or 8,900 premises in county Louth. The first two deployment areas there are Dundalk and Drogheda, which make up 4,300 premises. That means almost 50% of the premises are in the first two deployment areas. Dundalk is going very well and we will start to release premises in Dundalk in the coming weeks. We expect Dundalk to be completed and released by December. Drogheda is just starting construction at the moment. We are just working on some licensing issues in order to get the licences freed up for the Drogheda area. Some of them also bleed into Meath. We are also making good progress in Drogheda. As I said, 4,325 of the 8,791 premises are in the first two deployment areas in Louth.

As I am due to speak in the Chamber shortly, I will not take my full seven minutes. I thank the witnesses for their level of engagement, not just today but, as articulated by a number of other members of the committee, also previously. Unfortunately, I was unable to avail of the offer to meet on-site, but the offer was greatly appreciated and the level of engagement makes a significant difference in our being able to do good work with the witnesses at meetings like this and beyond.

Mr. Malone spoke in detail about the obstacles, many of which are understandable. In answer to a question from Deputy Ó Murchú, he said it would be 2023. It may be an answer to a slightly different question. When does he believe NBI will be operating at a consistently good capacity so that it is hitting good targets? While it might be dealing with some everyday obstacles, is it generally going at a clip that would make Mr. Malone and his colleagues happy? I am not talking about targets; I am just talking about when it will feel it has that momentum. I ask him to answer that question after which I have a few more questions.

Mr. T.J. Malone

We see that happening in 2022. This year has been all about coping with where we are and getting ourselves into a good position to get into 2022. "e envisage getting consistency, fluidity and programme delivery on the ground, and up and running, in 2022. We see 2022 as the year for us. There are obstacles, problems and issues out there. In any project of this scale, one will experience unknowns throughout. We believe we have come across the vast majority of them in the first year. We have come across a number of issues, found solutions and dealt with them. No doubt, we will find others as we go through it. In the first 12 or 18 months of any project of this scale, the big issues are reached fairly early in the project and solutions are found to work around them. We touched on some of them earlier, including the local authorities, the section 254 issues and the make-ready works. We have worked through all of those to put ourselves in a position so that we are confident when we hit 2022 we will start to get into a steady pace. We call it industrialised. That is where we get into an industrialised state whereby, from that point, we can then start to have a platform to move on to meeting and exceeding the targets.

Following on from that, I ask Mr. Malone to give an indication of the structure of NBI's contact centre. Are phone calls answered by in-house staff or is it that outsourced? How many calls are being answered? I have not heard of many problems with it; I am not coming from that angle. However, if NBI is moving to a more industrialised pace and people are seeing stuff being done, I imagine it will be busier. I want to make sure the phone line is operating well because people may not have Internet access for chat and that kind of thing.

Mr. T.J. Malone

The Deputy is right. I will hand over to Tara Collins. The contact centre falls under her remit and she would be abreast of all of the deployment plans and scalability so I will let her answer that question.

I have one more question after this.

Ms Tara Collins

It is true that our contact centre is another vital channel for our communications with end users and other stakeholders. As the Deputy is aware, our dedicated line for political representatives is included in the contact centre. The team in the contact centre has doubled in size in the past 12 months. We are meeting all of our service level agreements. The team there strives to provide seamless experiences across all of our touch points, which include telephone, email and all of our social networks. In addition to our marketing activities on social media where we proactively market, we also man the social networks in terms of responding to all of the queries that come in. The role of the contact centre is to provide information on the roll-out of the programme primarily and register stakeholders for email updates because in respect of feeding into our take-up, we need to create demand and be able to communicate directly with end users. We have just exceeded 50,000 registrations so we are communicating directly with 50,000 people in the intervention area.

The Deputy's other question concerned the quantities. We are managing 350 to 500 points of contact every week. In busier times, this can go up to about 600. The maximum we have seen on a weekly basis is about 600 points of contact but we are well manned. The operation is outsourced to the Rigneydolphin Group with which we have a very good relationship. We are very happy with the level of service it is providing. It is also managed in-house through my team via our head of customer experience so it is tightly managed.

That is great. It is a manageable amount.

Ms Tara Collins

It is.

Even at the high end, it is a manageable amount. That is good to hear.

My next question is for Mr. Hendrick and concerns the board of directors. I note on the website that the board of directors and the members of the board are not listed. It is just the chair - David McCourt - who is listed. I know National Broadband Ireland is a company and not a semi-State body but in the case of semi-State bodies that deliver large pieces of infrastructure such as the ESB or Irish Water, the board of directors would be listed. Could this be done in the interests of transparency given the important investment National Broadband Ireland is making? Is it something National Broadband Ireland could discuss?

Mr. Peter Hendrick

We will take that on board. Our board has a significant level of experience in rolling out large construction and telecommunications infrastructure projects so we are not short in depth of experience at board level but we will take this feedback on board.

National Broadband Ireland teases that on the website - that they are all great people - so it would be nice to know who they are.

Mr. Peter Hendrick

I appreciate the feedback.

This is an important discussion. Deputy Lowry summed up for many of us the importance of the national broadband strategy. It is akin to rural electrification. Our country requires this national broadband plan to be successful. The rebirth of our country in a post-Covid world hinges on the national broadband plan being successful. I am not trying to be dramatic. If we are looking at a new working from home strategy and a new way of doing business, connectivity domestically, regionally and internationally is important. All of us recognise that in a world where our corporation tax regime is being questioned, we require a high-quality national broadband plan to sell our country.

I commend our witnesses on their engagement with the committee.

What they did during the summer with members of the committee was very successful. They brought members to on-site locations to explain, show and engage. I propose that the Chairman write to the Working Group of Committee Cathaoirlaigh and recommend that other agencies adopt the same model of engagement. It allows for greater transparency and gives us greater confidence in dealing with queries and issues and it shows us the work that is being done, notwithstanding the roadblocks relating to many issues about which we have heard today.

We made reference to the website and engagements. Will the witnesses present to us, not today obviously, a county-by-county and, with counties, area-by-area breakdown of the work and activity in train? That would be important for our work in dealing with people. I could list places like Ballygarvan and Waterfall in my area as examples of places where there is a lack of clarity, but I will not do that today.

The issues of the delays relating to and the symmetry with the councils need to be ironed out. We have all experienced delays in getting contractors, whether it is builders or tradesmen. There are rising costs in construction from the point of view of work and materials. What effect will that have on the national broadband plan? Is there a contingency plan in the context of rising costs?

Mr. T.J. Malone

We have framework agreements in place with all our contractors. Contractors are split across design and build. We have three design contractors and four build contractors. We are looking to bring additional build contractors onto the pitch to help. There is a shortage of labour in the market in general. We have close relationships with our contractors. We give them forecasts of what is coming and when it is coming. Many of our contractors are working with outsourced recruitment agencies and internal agencies on the ground in different countries around Europe looking for labour and bringing it into the country in respect of places where there are shortages. They are also engaged with some universities, including Technological University Dublin and Kerry college, where apprenticeships are being run over 18 and 20 weeks in which they go through specific design for fibre-optic-related and civil engineering-related activities in the field. They are working with them and putting some of their own people through that.

On cost, we have frameworks and agreements in place with the contractors in respect of rates for set periods. Over the periods when they come up, we review the rates up or down with them, depending on where the market is. NBI's contract is on the basis that whatever the envelope is from subsidy, we have to work within that regardless of rising costs.

So there will not be any impact on the State or cost to the State in the contract.

Mr. T.J. Malone

No. it is covered in the initial subsidy envelope.

On the issue of work shortages, how successful has the outreach and targeting been?

Mr. T.J. Malone

It has been very successful so far. We are working with the contractors in respect of three areas: the ongoing work; the recovery of the seven-year plan; and to see where we are positioned from an acceleration point of view to bring that back in. We are confident we can get back the six months we have lost within the seven years of the plan. We are working with them in granular detail on what a deployment plan would look like and what resources they can make available.

Taking that into account, and as Mr. Hendrick said earlier, 2022 is kind of banked now. The figures we are looking at for 2022 are there, so any incremental decrease on the seven-year plan timeframes would take effect from the end of 2022 or from 2023 onwards. That gives us time to work with the contractors to source those additional crews and that different capability. We have seen some programmes around Europe - fibre commercial city programmes rather than rural programmes - finishing off. In Portugal and places like that, the contractors are engaging with individuals and other contractors from those countries and getting great success in bringing them across as well.

I thank NBI for its presentation. Despite what Senator Horkan alluded to, there is a lot of detail in the opening statement in the context of the issue of subcontractors and the disruption. As an educationalist, I impress on the witnesses the importance of our education establishments, especially primary and post-primary but now also third level. The frustration people have experienced with the Covid delay in the roll-out of broadband will last only for so long. NBI has a window of opportunity that I think the witnesses all know they need to work on and to build on. Importantly, as Senator Horkan said, the jargon will take us all only so far; it is the delivery that will be critical. I say that with respect.

What NBI did over the summer, I stress again, is very important. I ask the witnesses to consider doing that on a regional basis with county councils or regional assembly groups because it is about ensuring there is confidence in the work being done. Again, it is very important we get this delivered. I look forward to having our witnesses back before the committee. Míle buíochas.

To pick up on just one or two points, on a local issue, I ask Mr. Malone to give me the roll-out and connection metrics for Limerick as of now.

Mr. T.J. Malone

Limerick is one of the first deployment areas and is just about to go live. The first ribbon will go live in the coming weeks in Limerick. Roughly 18,000 premises fall within Limerick, in that deployment area. They will all go live between now and early November, so they are well advanced.

They are around the city.

Mr. T.J. Malone

Yes. They are around the city and on the outskirts and then they bleed, as we said, into south Clare as well. They are all really well advanced. We are effectively just finishing off the bits and pieces of splicing, testing and then getting ready to hand them over. Coming on from Limerick, we go into Tipperary. They are the next two deployment areas that have premises that feed in. By the end of 2023 we will see approximately 6,200 premises in the Limerick area ready for service.

Great. I welcome that.

May I have clarification on a couple of points? They involve a bit of detail. The target for the end of the year was 115,000 and it was said that NBI will do about 70,000 to 100,000 every year thereafter. Is NBI still on target to meet the 70,000 to 100,000 from 2022 onwards? What is its rough target for those years?

Mr. T.J. Malone

We absolutely are. We are targeting between 70,000 and 85,000 premises to be delivered next year so we are bang on target from that point of view and from what we said. From then on, as we said, our key area is that we are working with all the parties involved, whether it is Eir, our contractors or our procurement teams for the supply of materials from our supply chains, etc. We are actively engaged with all of them to see how we can better that and improve from the back end of 2022 onwards.

Let us say that a constituent of mine has a number and that it is going up on NBI's system now. I referred earlier to somewhere in Lisnagry. Is NBI quite near the city? Is it, say, beside University of Limerick in Castletroy? They are being told they will get roll-out of broadband. That is an intervention area between January 2025 and December 2026. That is three to four years away. Obviously, they are utterly frustrated. They are working from home and need high-capacity, high-speed broadband if they are to work with companies. They do not have that at the moment.

When these people go into the system, is that based on a seven-year timeframe? NBI will publish a plan very shortly on the seven-year roll-out. If someone goes up on the system, will that be based on a seven-year or five-year timeframe? When does NBI reach a point when it looks at bringing it back from seven years? Is what NBI publishing now for seven years? Am I correct in saying that?

Mr. T.J. Malone

The plan at the moment on the site is for seven years. We will be getting into more detail with the Department over the next number of weeks to get down and lock those seven years into even tighter timeframes and to have a shorter time window as to when they will be available. That is ongoing.

When NBI publishes its plan, as we are told it will, will it be a five or seven-year plan? I am talking about the plan that is imminent and is to be published in the next week or so.

Mr. T.J. Malone

That is a seven-year plan. That is us just getting back on recovery.

When will we get an idea of whether NBI is bringing the timeframe back? Is the intention to bring it back to five years? I am not saying it is achievable but is that the target?

Mr. T.J. Malone

The target is to see if we can do it within five years. We are currently evaluating all of the different elements and components that feed into that. As the Chairman might appreciate, we are six months behind the original seven years at the moment. We are actively out there getting to see what is and is not feasible. We are confident we can deliver the seven-year plan and that we can deliver it in under seven years. At this point, however, we are not sure of the extent to which that will be the case. That will not be until we get all of the different criteria back and understand what that gives us. That is ongoing and active and we are working-----

When will NBI know that? When does Mr. Malone anticipate NBI will be able to give clarity around bringing back the timeframe?

Mr. T.J. Malone

We will have a very good idea what those timeframes look like by the end of this year.

Is it correct that the financial aspect of the contract for the roll-out of broadband was based on a 60% take-up by customers? What has been the take-up to date? What does NBI believe the take-up will be? If take-up is less than 60%, could there be an additional cost to the State? I know it is a fixed-price contract and there has been great work on the ground, but the committee also has a wider, macro remit, as Mr. Malone will appreciate. This contract comes at a great cost to the taxpayer and will be of great benefit when it is rolled out. I ask for an answer to that question because I have to probe that issue. Is the financial model built on a 60% take-up by consumers? Will NBI reach that target and, if not, is there a contingency whereby there may be additional costs to the State? The scenario is similar to the tolled motorways and road tunnels when the State had to pay a subsidy if a certain volume of traffic was not achieved. I am not sure if Mr. Malone or Mr Hendrick should answer the question.

Mr. Peter Hendrick

I will respond. Unlike what one will see in a toll contract, we take on the revenue risk of the take-up. NBI, its board and its shareholders are taking on that risk. To give the committee some sense of this, broadband networks typically involve take-up over time. When we looked at this in 2018 and 2019, we had considerable evidence from Europe and other markets where people were transitioning from what we call legacy broadband networks on to fibre. Some of this was based on how far one could go with those networks in both capacity and speeds. What we are finding now is that the demand for content and bandwidth is so much higher. Hence the reason we are delivering 500 Mbps. We are, therefore, seeing an earlier adoption of users transitioning from those legacy networks on to our fibre network.

Another key enabler in our take-up is the number of operators that we have selling and have signed up to our network.

The figure is 46.

Mr. Peter Hendrick

Yes, we have 46 today which is an incredible number. They are proactively engaging with their customers, whether it is on a wireless or copper-based network, and offering them either free installation, six months free or 12 months at 50% discount. They are incentivising their customers to move over to what they would see as a more reliable and higher speed network.

If we look at this at the macro level, from a European perspective there is an ambition that all premises throughout Europe will have gigabit capable services by 2030. This is why we are seeing a massive shift by commercial and State funding to bring all of this infrastructure onto fibre-based networks.

What has been the take-up to date? I know it is just starting out. My next-----

Mr. Peter Hendrick

So-----

Mr. Peter Hendrick

I was going to give the Chair some examples. I apologise.

What does Mr. Hendrick anticipate will be the overall take-up? Am I correct in saying the financial model was built on a minimum take-up of 60%. Is this correct or is it just hearsay?

Mr. Peter Hendrick

The 60% is an objective in the financial model for a moment in time. That moment in time is several years away. It is not today.

Are there any circumstances in which the NBI contract could cost the taxpayer more than the cost as agreed under the contract?

Mr. Peter Hendrick

No. The contract is in a position whereby the shareholders of NBI are taking the commercial risk. If we do not perform to our take-up objectives, it is our shareholders who will make up the deficit.

The cost to the taxpayer is the figure of-----

Mr. Peter Hendrick

It is €2.6 billion. It is a fixed number associated predominantly with the construction and build-out of the network.

Any additional costs will fall to NBI and if there is a reduction in the cost of materials, there will be a rebate to the taxpayer. Is that correct?

Mr. Peter Hendrick

That is correct.

I am conscious of time. For us to assist NBI in its roll-out, it would appear that one of the areas that probably requires a bit of tightening up is being able to get road opening planning licences through the local authorities. We will write to the Minister for Transport and Communications and the Minister with responsibility for local authorities to ask them to establish designated units. NBI might advise the committee on what it will need in those units. Obviously it will need planners and engineers. NBI needs to tell us specifically. Many operators ring us to try to get road opening licences through. I am familiar with this issue. It is not as efficient as I would like it to be. Will the witnesses give the committee an indication of what they believe would be required?

Are there other areas where there are blockages in the logistics? Is there an issue with access to labour? What does NBI see as being the blockages over the next 12 months to it rolling out the contract as quickly as possible? What needs to happen so that by the end of the year it will be coming back saying it will get it to five years and that the person who made the representation to me would find the link-up to be much quicker? I also ask the witnesses to flesh out the 60% figure. What will NBI do practically on the intervention areas? People are tearing their hair out. They see neighbours 100 yards up the road on fibre broadband while they are not on it. I am aware of a lady who is looking at a wait of two to three years according to the website. What will NBI do practically? The witnesses have spoken about a pilot scheme. Does NBI need assistance from us?

I know I have asked many questions but it is a round-up. To recap, I have asked NBI to write to us with regard to local authorities, I have asked whether there are other blockages with which we can assist, I have asked about the intervention areas and I have asked the witnesses to confirm once and for all that there are no financial downsides for the taxpayer in the NBI deal and that there may be an upside if the cost of materials decreases.

Mr. Peter Hendrick

That is correct, Chair. We appreciate the committee's support today and to date. We will follow up with further details on what we are doing with the RMO and the local authorities, and how we think we could seek further assistance. We appreciate that. Let us consider what other activities we could come back to the committee with, in terms of support. From a communications and stakeholder engagement perspective, we have seen great support. That local community and communications plan is something we are very committed to. Every week our team engages on the ground with politicians and local councillors, and it is very important that we continue that. Given its scale and complexity, it is a hard project to explain. Certainly, getting to premises earlier is our focus. In terms of the intervention areas and the programme of activities, we will feed back into the committee on our progress. Equally, in terms of how we see the deployment of the network releasing capacity to other operators and how that benefits both the end-users' businesses and homeowners, that is actually making the overall intervention area deliver a service, even though we are not there yet. We are an enabler to improving the existing broadband networks-----

Mr. Hendrick might write to us specifically on the intervention areas when he has a bit more detail on what NBI is doing in the first quarter. It is a huge issue on the ground.

I concur with the Chair.

Finally, will Mr. Hendrick nail it on the head that there are no downsides for the taxpayer in terms of costs with the NBI contract, at €2.6 billion? It is a huge amount of money, but if it is rolled out successfully the benefits will be enormous in terms of people getting access to broadband fibre whether they are in Dublin, Tokyo or rural County Limerick. We saw during Covid-19 that we can operate from home, but we need broadband of a high calibre nature. There may be some upside. It is a €2.6 billion fixed contract. If the costs go up, NBI is taking the risk. If there is a reduction in the cost of materials, there could be a rebate to the taxpayer. Will Mr. Hendrick nail that on the head, because obviously NBI hears speculation, but there is an opportunity here in a public forum to give absolute clarity and state categorically that there is no downside in terms of risk for the taxpayer in terms of cost, only a possible upside?

Mr. Peter Hendrick

I can confirm that there is no downside, that the number is capped and that the subsidy profile is capped. It has been approved by the European Commission at a state aid level. The contract in itself has many protections and legally binding obligations that fall on NBI to deliver the project, one of which is that we do not get any more subsidy than is in the subsidy envelop, and that all of the associated revenue risks sit with NBI. Any gains in terms of savings on materials or labour costs go back to the State, so there is definitely more gain. We see that today in the number of deployment areas that we have completed. We see that the budgeted costs that we had originally envisaged are coming in on or below budget, so we have a high degree of confidence that there will be savings in this project. There is no downside. We take the-----

It is capped at €2.6 billion for the Irish taxpayer.

Mr. Peter Hendrick

Correct.

We will correspond with Mr. Hendrick in terms of the engagement with NBI. We will discuss this as a committee. There is obviously ongoing engagement at local level. For us, it is very simple. We are here, as a committee, to ensure that broadband is rolled out as quickly as possible. We also have a remit to protect the public purse. We thank Mr. Hendrick, Mr. Malone and Ms Collins for attending today's meeting and engaging with us. We look forward to further engagement. Mr. Hendrick will appreciate the intervention area is a huge issue for us. We welcome the fact that you are starting to do something on that in the first quarter next year.

Mr. Hendrick will appreciate that the intervention areas are a major issue for the committee. We welcome that NBI is to start something in that area in the first quarter of next year. Perhaps it will provide further details on specific areas of the country as the process evolves in order that we can put flesh on it. Members look forward to continuing engagement at the committee with Mr. Hendrick and his colleagues.

The next meeting of the joint committee will be held in private on Tuesday, 21 September.

The joint committee adjourned at 2.45 p.m. until 4 p.m. on Tuesday, 21 September 2021.