Other Questions.
81 Deputy John Deasy asked the Minister for Communications, Energy and Natural Resources if the management contract for the MANs network phase II has been signed; and the return on investment that the State is receiving in financial terms from the MANs II. [4618/09]
View answerA total of 58 of the 60 phase II MANs, which provide state-of-the-art, fibre, open access networks to 64 towns across the country are now completed. Construction of the Edenderry network will be completed this year while the Kinsale network will be constructed in parallel with planned main drainage works next year.
All completed phase II networks are being managed, maintained and operated on an interim basis by the technical services firm Magnum Opus on behalf of my Department. Magnum Opus will manage the phase II MANs until such time as a management services entity is engaged for the phase II MANs — MSE 2.
The engagement of MSE 2 is currently the subject of a procurement process, which is expected to conclude before the end of March 2009.
The widespread provision of broadband services continues to be a priority for the Government. In that regard my Department has undertaken a variety of initiatives to address the gaps in broadband coverage. Previous initiatives such as the Global Crossing deal, the group broadband scheme, grant aiding ESBT, and MANs phase I, as well as current initiatives such as Project Kelvin, the national broadband scheme and MANs phase II, have all underpinned the pro-competition policies that are now bearing fruit.
Policies built on the cornerstone of competition provide the investment certainty that the electronic communications market needs. Service providers fully understand that Government intervention, by way of funding infrastructure, will only occur where the market has failed to bridge a digital divide.
Such policy and intervention initiatives, including phase II of the MANs programme have helped to facilitate the development of the market to the point where over 60% of Irish households now have a broadband connection. ComReg's quarterly report for Q3 2008 states that 61.1% of those households have a connection in the speed category of 2 -10 mbps. At the end of Q1 2008, 83% of Irish SMEs had a broadband connection. Over 70% of those SMEs, according to ComReg's report, have a connection in the speed category of 2-10 mbps.
It is important to consider the MANs in the context of these market developments. They have provided all service providers with access to local markets and encouraged the roll-out of DSL in the relevant towns. They have assisted the IDA in the attraction of foreign direct investment and, more recently, are being considered by mobile broadband operators who wish to deepen the fibre in their networks to cater for the rapidly increasing demand for bandwidth by mobile users.
While information regarding the revenue generated from the phase II MANs is commercially sensitive and I do not propose to release details of the revenue generated at this time, I do believe that the MANs will play an ever increasing, and crucially important, role in our competitive electronic communications market.
I would appreciate it if the Minister could stick to the question, which is specifically about the metropolitan area networks phase II. We can have the debate on some of the other issues the Minister raised on another day.
My concern here is that in July last the Department chose a preferred bidder to manage MANs phase 11. Some 58 metropolitan area networks under phase II are completed. It has cost the State approximately €80 million to provide that infrastructure. The Minister tells us, because it is convenient for him, that he cannot tell us the revenue he is getting from that €80 million of expenditure on the 58 MANs that are waiting to be lit up and add backbone to the broadband infrastructure across the country.
The reason the vast majority of them are not being used at all is that we do not have an entity managing this infrastructure on behalf of the State. I asked the Minister last November why his Department had not signed a management contract to allow the preferred bidder — or somebody else, I do not mind — to manage that infrastructure on behalf of the State.
MANs phase I is bringing in a great deal of money to the Government in terms of usage. The MANs phase I are being used by all broadband providers in Ireland with the exception of one or two, yet MANs phase II, at a cost of €80 million, is not being used at all. The MANs phase II are not being managed properly because the Minister and his Department are delaying putting a management contract in place. Why is that delay continuing?
It is very simple. We want to get the right deal for the Irish people. One tries to manage the negotiations or arrangements so that one gets a proper deal.
It was due in July last.
If we considered——
It is eight months late.
In the arrangements we had in place where we were still completing certain MANs and where the ones that were finished were available through the interim operations, Magnum Opus managed them.
They are not available.
It was appropriate for us to try to get a best possible deal for the State and for the people in order to open them up. That is what we are doing. In March of this year, as I stated in my reply, I hope to be able to sign off on that if we can get a good deal for the State. Part of the job of Government——
What is the delay?
——is to work in the taxpayers' interest.
Does Deputy Coveney have a supplementary?
Absolutely. The Minister speaks of looking after the taxpayers' interest. We have spent €80 million of taxpayers' money on this infrastructure and it is not being used. This is dark fibre sitting in the ground not being lit up——
Ask a question.
——because it is not being managed.
That is correct.
The Minister has not given a satisfactory explanation for the time delay between July last and now. He now states that we will not see it until the end of March because he wants to get a better deal for the taxpayer. The taxpayer is losing by the day because we do not have a satisfactory broadband infrastructure across the country, partly because we have a great many wires and fibre in the ground that are not being used because of delays in the Minister's office.
Maybe he could tell us how many of the 58 MANs phase II under interim management are being used at present. He stated they are available for use and I dispute that. How many of the 58 are being used and why is the Department delaying putting a contract in place for the proper management of this expensive piece of broadband infrastructure?
This infrastructure will be used effectively because, as I stated in my response, we will see mobile operators and others availing of it. We will not leave it there stranded in the ground.
The Minister has done so for nearly a year.
No. It is proper for us to get the market arrangements right for that so that we get a good deal for the State. I would prefer to do that and take the time to get it right rather than get a bad deal quickly.
They will be obsolete before then.
Allow the Minister to speak.
They will not. The reason for this long-term investment is that in the medium term, which is a ten-year horizon, fibre will become increasingly important and we will see a range of services connected to that.
Did he choose a preferred bidder in July last?
The arrangements——
Did he choose a preferred bidder in July last?
One does not negotiate in public. One does not go out and do the business of the State in an open timeframed way.
I am not asking the Minister to do that. I am asking him to negotiate and come to a conclusion.
One negotiates to get the best deal. I believe we will get that in terms of management of the MANs II. This infrastructure will provide a vital role among a range of different support measures the State is taking to provide broadband across this country.
Ceist Uimh. 82.
The Minister is dillydallying. Dunmanway does not have the infrastructure.
I am not dillydallying at all. In the past two years broadband numbers have gone from approximately 0.5 million up to 1.25 million.
Minister, I called Question No. 82.
No thanks to the Minister.
I will quite happily sit on that record.
The Minister will be sitting on the MANs.
I take it the Minister proposes to take Questions Nos. 82 and 96 together.
I beg your pardon, a Leas-Cheann Comhairle.
82 Deputy Thomas P. Broughan asked the Minister for Communications, Energy and Natural Resources his views on criticisms that a year after the €26 million ocean energy programme was unveiled, only a fraction of the funding has been released; and if he will make a statement on the matter. [4549/09]
View answer96 Deputy Seán Barrett asked the Minister for Communications, Energy and Natural Resources the progress that has been made in meeting the targets that the State has set for itself in terms of delivery of electricity power generation from wave energy sources. [4598/09]
View answerI propose to take Questions Nos. 82 and 96 together.
The Government is giving high priority to supporting the development of Ireland's ocean energy potential. As the Deputies are aware development of this renewable energy source is at the very early stages and will require considerable research to bring it to fruition as a general source of energy. In this regard I launched the multi-annual ocean energy package last year. While I accept that progress in 2008 was somewhat slower than targeted I can report that significant progress has been made in completing the necessary preliminary tasks to ensure the proper functioning and financial management of the programme.
The ocean energy development unit base has been established within Sustainable Energy Ireland, SEI. This unit will manage the ocean energy strategy and generally administer the scheme.
Since its establishment the unit has invested significantly in the creation of a state-of-the-art national ocean energy facility in University College Cork. The unit is also managing the development of a grid-connected wave energy test site off the west coast. It has also commenced the ocean energy prototype fund, which will assist research projects in this area. The first tranche of applications and allocations from the fund will be decided within a matter of weeks. In addition, I have also announced the introduction of a new feed-in-tariff under the REFIT scheme for wave and tidal technologies of €220 per megawatt hour, which will be available to future full-scale projects connected to the grid.
The unit has also established an advisory group comprising my Department, the CER, the Coastal Zone Managing Authority, Enterprise Ireland, EirGrid, ESB Networks, IDA Ireland, the Marine Institute and Science Foundation Ireland, to co-ordinate the activities of these agencies in developing and delivering an efficient roadmap for ocean energy.
The ocean energy development unit has also commenced work to deliver studies of common interest to the sector including a study on the engineering and specialist support requirements for the sector in order to enhance Ireland's capability to maximise participation in the construction and operation of wave and tidal systems; a review of the planning regime for ocean energy development, a strategic environmental assessment for ocean energy in Irish waters, to investigate partnership with industry for data gathering and processing, and a detailed review of the macroeconomic benefits that ocean energy can deliver for Ireland.
Expenditure in 2008, at just over €1 million, reflects the fact that each of the component measures was in the process of being established and I am advised that this pace will accelerate and the full allocation of €7 million in 2009 will be spent.
I am confident that delivery of the Government targets of 75 MW by 2012 and 500 MW by 2020 — which should be seen as the base of our ambitions, not a limit on them — from ocean energy technologies will be enabled as the current research and prototype development and that Ireland's considerable potential in this area can be realised.
Does the Minister accept the gulf between his rhetoric and his record is such that it leaves him vulnerable to criticism? When he launched this so-called €26 million programme on ocean energy in January 2008, he said he was setting out to ensure Ireland would win the race in establishing a viable ocean energy device. Will he not accept that other countries are in the process of winning that race and that we have failed in regard to the first ambition the Minister set out for himself? He said we had the most sophisticated State-support system for ocean energy in the world. He has not been able to get his unit up and running in time to spend the €5 million he was supposed to spend last year, so sophisticated is his record in terms of support.
Will the Minister outline exactly how the €26 million will be spent? He has already lost one year, where he has spent only €1 million. This year he is talking about €7 million; what is the situation as regards the following year, 2010?
I have a specific question, too, on the applications, which were sought only in November by the Department. How many applications have been sought, how many proposals have been received and what is the funding available for them?
Does the Minister not see the potential of both offshore wind and wind energy in this area? Has he not got the wherewithal to ensure we are the world's leading experts in this area? This is something that is natural to this country. We, on the Joint Committee on Communications, Energy and Natural Resources, have prepared legislation in this regard because we do not even have modern legislation to deal with this. This legislation got buried until people such as myself and others started to make noises. Is the Government serious about the €16 billion investment in this area? Is it serious about getting this up and running? Ireland is an island stuck in the Atlantic, where we have natural resources second to none. Can he not please show us action to ensure we become the leading country in the world in this area?
We have in our country a cluster of new independent Irish companies that have real opportunities to become world leaders in this area. They are working with international utilities and investors that are seriously considering investment in Ireland. We have to get a number of measures right for that. The budget figures are important, but they are not the crucial constraints. What Deputy Barrett says is true. The first thing they want is certainty around planning and community support. When one talks to the companies considering investment here, these are the first issues about which they are concerned. In that regard, I am confident we have the right people in the ocean energy unit. It may be some months late, but I prefer to get the right people in and the right strategy in place while taking the type of advice we are being given on the planning side, and putting that into action.
The Government spend is €26 million.
The budget will not be measured in the €10 billion or €20 billion about which we are talking here. We are talking about a large multiple of that, if any one of these devices becomes commercially viable.
The Minister will not even confirm the budget of €26 million.
This is as important for the State, to my mind, as the date when Intel erected a small cabin in Leixlip, because if one of these devices works and takes off, we shall be talking in terms of billions, not tens of millions. The crucial test for us is getting community support behind it because that is what the investors need in terms of confidence about planning and getting our planning system right. The ocean energy unit within our Department, in conjunction with others, is charged with delivering on that task.
Written Answers follow Adjournment Debate.
