Wednesday, 10 October 2018

Questions (1, 2, 5)

Timmy Dooley

Question:

1. Deputy Timmy Dooley asked the Minister for Communications, Climate Action and Environment the status of the national broadband plan; and if he will make a statement on the matter. [41459/18]

View answer

Brian Stanley

Question:

2. Deputy Brian Stanley asked the Minister for Communications, Climate Action and Environment the level of progress on the national broadband plan; the viability of the tender process; the date for signing of the tender agreement; and the expected date of completion of the national broadband plan. [41257/18]

View answer

Thomas Pringle

Question:

5. Deputy Thomas Pringle asked the Minister for Communications, Climate Action and Environment the status of the tendering process for the national broadband plan; if he is satisfied with the process to date; and if he will make a statement on the matter. [41465/18]

View answer

Oral answers (59 contributions) (Question to Communications)

The national broadband process has seen a dizzying number of revelations over the past few weeks that can only be described as farcical. From the significant change in the character and make-up of the bidding consortium, and the Minister's knowledge and involvement in this, to his general meetings in New York with Mr. David McCourt to the sudden sale of Enet on Monday and legal action against the remaining bidder, Granahan McCourt, for alleged misuse of privileged information, we are yet again in a position where the national broadband plan, NBP, is mired in controversy. The initial Enet-led consortium of SSE and John Laing Group has now disbanded and we are left with an investment fund proposing to deliver broadband. What is the position of the procurement process for the national broadband plan?

I propose to take Questions Nos. 1, 2 and 5 together.

I welcome the opportunity to update the House on progress of the national broadband plan. The commercial sector has failed to bring high-speed broadband to large parts of rural Ireland. The purpose of the Government’s national broadband plan is to address this market failure. Ireland is not alone in facing this challenge. It is a challenge faced by other digitally ambitious EU member states and a number of these member states are making very significant interventions in the market to ensure the deployment of high speed broadband connectivity.

As I previously outlined, the final tender for the contract to roll out the national broadband plan was received by my Department on 18 September and this is the final stage in the procurement process. The public procurement process for the national broadband plan has of necessity been a complex and lengthy process. As Deputies will appreciate, this is no ordinary infrastructure build. The NBP is not comparable with more standard infrastructure projects, such as the construction of a school, a road or a bridge. In the case of the NBP, the procurement process has involved the bidders developing and bringing forward both the technical solution and the deployment plan to deliver that solution. Learning from earlier interventions, such as the national broadband scheme and from experience internationally, Ireland has adopted an ambitious and long-term approach to this project. As a communications sector project, the NBP is unique in its ambition.

The Government set the bar high when it set out its ambition for the national broadband plan. While this meant that bringing forward a future-proofed solution would be complex and challenging, as we have witnessed, it also acted as a catalyst to encourage very significant investment by commercial operators in deployment of high-speed broadband networks. It is without question that the pace and nature of the deployment of high-speed broadband networks by commercial operators in the past two years has been significantly influenced by the Government’s intervention through the national broadband plan. That is a welcome development for Ireland and, as a direct response to the ambition set by this Government, the services now being rolled out by commercial operators are offering a basic service of in excess of 100 Mbps download speeds.

The national broadband plan procurement process was launched following a comprehensive consultation with commercial operators on their plans to serve premises in the potential intervention area. At that point, the map included approximately 757,000 premises. While the procurement was ongoing, Eir came forward with a further commercial plan to build a high-speed broadband network to serve 300,000 of those premises within the planned State intervention area. Eir’s submission was evaluated by my Department in accordance with the criteria that apply to the NBP mapping process and was found to be a credible plan. As a consequence, and in keeping with state aid rules, the map had to be revised to remove these 300,000 premises. This is evidence of an aspect of the complexity of managing a procurement process to address a clear market failure, when commercial companies can continue to bring forward investment plans in parallel with the procurement process.

For the people, schools and businesses located within the Eir rural deployment area, Eir’s investment was very positive and today, based on recent information from Eir, approximately 220,000 premises have been passed and have access to a high speed broadband service as a result.

For the NBP procurement process, however, it added considerable complexity, did little to reduce the cost of building a State subsidised network, while considerably reducing potential revenues.

I appreciate the genuine interest of Deputies in seeing a successful outcome to the NBP procurement process and to the deployment of high-speed broadband services in every constituency of this country. The interest of Deputies is evident from the fact that since my appointment as Minister, I have replied to almost 750 parliamentary questions on broadband, many of them exhorting me to accelerate the procurement process, including almost 70 questions from Deputies Dooley, Stanley and Pringle.

There are 1.1 million Irish citizens waiting for the deployment of this future-proofed network which will have a fundamentally positive impact on their lives. The successful roll-out of high-speed broadband infrastructure will mean that the ability to live and work in any area in Ireland will not be constrained by a lack of connectivity. This is a goal we all want to achieve.

Evaluation of the final tender submission is ongoing and will be allowed the time required. On conclusion of the evaluation, my Department will make a recommendation to me on whether to appoint the bidder as preferred bidder and I will bring the matter to Government for decision.

There are many questions about the Minister's relationship with the remaining bidder. On what other occasions did the Minister meet David McCourt, or representatives on his behalf?

Were the meetings minuted? Will the Minister release the minutes of the meetings? What officials accompanied him to the meetings? Did he have lunch with David McCourt at Leinster House on 18 April, the very same day he answered questions in the Dáil on his inappropriate role in the Celtic Media Group takeover? At any time during the process, did David McCourt or his representatives discuss with the Minister the extension by his Department of the concession agreement with Enet for the municipal area network, MAN, contract without retendering? If so, was that before the sale of Enet? Was the Minister aware of his intention to sell a stake in Enet when he extended the concession agreement for the MANs? Did that form part of any Granahan McCourt involvement in the national broadband plan, NBP? Is the Minister about to gamble a vast amount of taxpayers' money on the roll-out of broadband by a private investment fund? It is not like Eir, the ESB, Vodafone, Enet, SSE or the John Laing Group. This is a big gamble and if it goes wrong, the taxpayer will lose and the 542,000 families and businesses waiting for broadband will lose even more.

The question I asked was about the viability of the current tendering process, the expected date for the signing of the tender agreement and the expected completion date of the national broadband plan.

The Minister said the process is unique. I would not say that, it has turned out to be a real dog's dinner. The big players have pulled out, namely, Eir, the ESB and SIRO, and the consortium led by David McCourt has seen SSE Airtricity leave. The John Laing Group, which was one of the companies providing the cash and firepower, is gone. Enet has been relegated to the role of a subcontractor. The Minister said the consortium has been joined by Denis O'Brien, but his company is now going to become a contractor, which is different. The Granahan McCourt consortium will also have Enet, Nokia, and Actavo, which is a Denis O'Brien company, the Kelly Group and the KN Group as contractors. The consortium has changed significantly. One company remains within it, while the others are gone. Enet is relegated to the role of a contractor. I understand the State is set to buy the remaining 28% share in the company. The State, which now owns Enet, is becoming a subcontractor to a private venture capitalist firm from America but the State will bankroll the project and, essentially, become an employee of an American capitalist company. That is what is happening here.

Deputy Stanley should please conclude. He is taking Deputy Pringle's time.

The State is now in a subservient position.

Deputy Stanley should please conclude.

I just want to ask this question. What in the name of God was the Minister doing meeting David McCourt? He sought a meeting with me this week but I refused, and I am on the Opposition benches. I have nothing to do with the tendering process.

Deputy Stanley should please allow Deputy Pringle to make his contribution.

The Minister is the head of the Department that is overseeing the process-----

Deputy Stanley should please resume his seat.

-----and he will sign off on the contract. He should not have met David McCourt. Did he have Cabinet approval?

Deputy Stanley should please resume his seat.

What was the purpose of the meeting and who sought it?

Please Deputy. To be honest, I expected more of you.

It is an important issue.

I have never seen you do that before. You have taken up a considerable amount of Deputy Pringle's time, which is not fair.

I do not know if he has taken up my time.

He has taken up somebody's time but it is certainly not mine.

He has taken up Deputy Pringle's time.

That is definitely not going to happen.

The amount of time given to the question is now less.

You can sort that out, Acting Chairman. You can deal with Deputy Stanley.

Deputy Pringle has already lost ten seconds.

I am going to use my time anyway, that is for sure. The Minister outlined the problems with the broadband scheme from the very first day when he allowed Eircom to go off and do its own thing. That is the crux of the problem. Eircom did nothing for years in terms of rolling out broadband for its customers and when it saw there was interest from other parties, it rolled it out to a last few. It took anything of value out of the project altogether and that is why the Minister has ended up with only one bidder.

I cannot understand how the Minister could meet David McCourt when the bidding process was ongoing. It is crazy. It is completely senseless. It shows the links business people have to the Government. Members of Parliament cannot get to meet the Minister but he will meet members of consortia and discuss the process with them.

The questions that have been asked already are very important and must be answered. The problems with the national broadband scheme date back to long before this issue arose. This is just another step along the road of what has been a very bad project overall. The Minister should have done it long before now but it is time for the Government to take over the project and to provide the infrastructure itself.

First, I have tried to facilitate in every way I can any request for meetings I have had from Members of this Parliament. Second, the Department is responsible for the governance and evaluation of the tender. The Minister has no role in relation to it. As Minister, I have overall responsibility to ensure the Government's objectives under the NBP-----

The Minister has a corporate role.

-----in terms of State-led intervention are met.

The Minister should be allowed to speak without interruption.

I am also responsible for answering questions on the timelines associated with the Government rolling out high-speed broadband to non-commercial areas as soon as possible and meeting with the targets set out under the digital agenda for Europe. The Department is required to keep the Minister and the Government informed of the progress, timelines and the likely cost implications for the State.

As for the meeting in New York, the procurement process is in no way compromised by my attendance at a dinner that took place on 16 July. The short discussion was of an administrative nature. There was one remaining bidder in the procurement process. The meeting was before the final tender was received on 18 September, and no member of the NBP procurement team was present, as it was not an NBP meeting. I understand that the evaluation of the final tender received is currently ongoing and we should allow for the process to be completed.

On a number of occasions, colleagues in the House have commented on how long and protracted the process is. It started at the end of 2015. There is an insinuation that I as Minister for Communications, Climate Action and Environment should not have met anyone in any way associated with the national broadband plan from my appointment in 2016 until a decision has been made.

The Minister should not have met bidders in any process.

During the talks on the programme for Government the procurement board itself made an announcement that it would delay the process, which was independent of any Minister being in place at the time. Do Members want a situation where all progress in the communications area would be stalled pending the completion of the process?

Deputy Dooley would, correctly, have come in here today and criticised me if this system had fallen apart and Mr. McCourt had said that the Government and the Minister of the day refused to meet him and as a result he was withdrawing from the process. Deputy Dooley sat across from me at a lunch table in December when I sat beside Richard Moat, who was involved in the bidding process at that stage. The reality is that we have a lot of the communications sector involved in the process in one form or another. I am Minister for Communications, Climate Action and Environment and we have significant challenges in relation to broadband coverage. In conjunction with the Minister of State, Deputy Kyne, I have achieved much success with the broadband task force. That required engagement with the industry, first, to identify where the bottlenecks were and, second, to unblock them. We have made significant progress. We released an 86% increase in capacity in the broadband spectrum. We were the first country in Europe to auction off 5G capable network. There is a lot happening here. There is a lot of interest in this country because of the decisions that are being taken by my Department and the Government.

For the avoidance of doubt, the Minister and I were at an Irish Business and Employers Confederation, IBEC, dinner in the Four Seasons hotel with a couple of hundred people. We sat around a table of ten or 15 people. It is disingenuous of the Minister to try to correlate the two events and suggest they are the same. Will the Minister respond to the question I asked him? On 18 April, did the Minister have lunch in Leinster House with David McCourt? Who else attended that lunch? Were there officials with the Minister and did he retain a minute of that meeting?

Can the Minister explain to us what he thought the purpose of that meeting was and why there was need for a subsequent one? The Minister will be berated in this House and held to account for the non-performance of his Department, but if there is a procurement process in place, as there was, and if there are officials assigned to make it happen, if an executive decision is required, make the executive decision, change tack if necessary, but it does not need the Minister to go out to the individual players , one by one, or one at a time, or one on their own, and try to give them some comfort that everything will be all right on the night. Nor should they be allowed to canvas the Minister. What the Minister has allowed to happen is to bring in to-----

-----play the notion that a bidder has been canvassing him to make it easier in some way for it to get a result. He has politicised a very important process and he has done that himself.

He could have come to this House and answered questions. He could have worked against Members of the Opposition if they made any charge against him for delay.

The Deputy is way over time.

He could have taken executive decisions not this soft approach in which he allowed himself to be embroiled.

I have a question to ask the Minister he has not answered. The Minister met the one remaining bidder at a crucial point in the tendering process, in the final stages according to what he has himself said. Who sought the meeting? Was it the Minister or was it David McCourt who sought the meeting? Did the Minister have Cabinet approval and did he brief the Cabinet afterwards? What was the purpose of that meeting? That is what we all want to know.

I am glad to see that Fianna Fáil has moved a little bit towards the Sinn Féin position and they are now talking about public infrastructure. It is good if we can get on to that ground. We have public infrastructure. We have the MANs system that is owned by the State and operated by enet, which the State now owns. The Minister might confirm the State owns enet 100% since yesterday after buying the remaining 28% share. There is the metropolitan area network, the ESB network, and the backhaul system where there are cables running along railway tracks parallel to water systems, motorways etc which are owned by the State. I have looked at the map of it and it is extensive. There is the State hardware and the roadway to roll out this. Even if the Minister is successful with this, and a contract is signed with the remaining bidder-----

It is an awful mess. Everything is left hanging on that bidder, on an American venture capitalist. The State company that we now own is going to be subcontractor to a venture capitalist. Does the Minister not get that there is something wrong with that? That would not be allowed in capitalist England or Trump's America or anywhere in the world. It is not that it is unique: it is crazy. I know the Minister is concerned about this and to drive it on. The Minister was wrong to meet him. I am not saying that the Minister met David McCourt for any underhand or corrupt reasons but he was wrong to meet him. If I was Minister I would not have met him. I am in opposition and I refused to meet him.

I will conclude on this. If I was the Minister, I would phone the ESB and have it and enet in and talk to them this week. I would talk to the companies that the State has some control over.

The Deputy is almost two minutes overtime.

I would look at the hardware we have-----

-----and get this plan back on track.

This is a very important subject. It is very difficult in rural Ireland.

It is and there are other important questions here as well.

As I understand it we own enet and have been the major shareholders in enet for a long time. It has rolled out the metropolitan area networks across the country and we are shareholders in that, or maybe I am wrong in that. Enet told me that a number of years ago. The Minister can clarify that.

In the Minister's own statement he outlined what was wrong with this process right from the very start. He said that all of these meetings he had with Mr. McCourt were before the final tender was received. That is the problem. If the Minister had met him after the final tender was received, and everything was in with the Department, that might have been acceptable and okay, but this happened before the tender process was over. What was Mr. McCourt doing? Was he questioning what would work as a tender or make it work for him? This seems to make it work for enet and for David McCourt and not for the people of Ireland and that is the problem.

I thank the Deputy for his co-operation. I ask the Minister to conclude within a minute.

First, the minute of the meeting in New York has been published, as has the cover note from the official who took the minute. It reads:

Please find attached the minute of last week's meeting in New York. For context the discussion on the NBP was limited to approximately ten minutes during which time Mr. McCourt addressed his remarks to me as the official representing the Department.

They were not to me as Minister, but to the official.

Who sought that meeting? Mr. McCourt sought that meeting. Did I have lunch on 18 April? No, I did not have lunch on 18 April.

I honestly do not know about the ownership of enet. Yes, the State has a significant share in that company.

Deputy Stanley is correct. What the national broadband plan is about is stringing fibre cable on the Eir network of 1 million telephone poles across this country. They are in private ownership and we can go back over how they ended up in private ownership but the reality is that they are in private ownership. The reality is that before my appointment as Minister we had a situation where we had the greatest economic boom in this country. There was no investment by the incumbent. We had a mobile spectrum that was auctioned off to the highest bidder. Consumers had to pay for that and it minimised the coverage. The national broadband plan scheme that was launched was obsolete the day it went live.

At the start of this complex process in 2015, the target was to bring 30 megabits per second broadband speeds to every single home in the country. We now know today that is obsolete and that most of the commercial operators are delivering an average of 100 megabits per second. In fact the national broadband plan, when it is hopefully approved in the coming weeks, will deliver 150 megabits per second. That is the objective in relation to it. That evaluation is ongoing currently and it would not be right for me to meet with anyone while that evaluation is ongoing. Let us see what comes out of it. We will have this within the next couple of weeks. It would not make sense at this stage to sit down with the ESB and enet and start all of this process again. We are within weeks now of finalising a long, complex process and the reality is that people have been hugely frustrated. Deputies Stanley, Dooley, Pringle, the Minister of State, Deputy Kyne, and myself are all meeting people who are hugely frustrated. They just want broadband, full stop.

I appreciate that this is a really important issue from both the Deputies' side and the Minister's side but we have totally abused time on this. I try to accommodate everybody. The point is when we go over time on an item some of the Members' colleagues are not going to get their question in today. I gave some extra time to everybody because of the importance of the issue, but from here on in I ask all Members and the Minister to keep to the time slot.