Tuesday, 21 May 2019

Questions (80)

Brian Stanley

Question:

80. Deputy Brian Stanley asked the Minister for Communications, Climate Action and Environment the way in which the State subsidy towards the national broadband plan is structured over the course of the 25 year contract; and if he will make a statement on the matter. [21702/19]

View answer

Written answers (Question to Communications)

The overall estimated total cost of the National Broadband Plan State intervention is approximately €5 Billion over 25 years, not including VAT. This covers not only the cost of building the network as would be the case in other procurements, but also to operate and maintain the network over 25 years. The maximum possible cost to the state will be €3 Billion over 25 years. This includes €545m for conditional and contingent subsidy and includes €354m in VAT, which will be paid to the Revenue Commissioners as subsidy is spent. Subsidy will not be paid to the company, National Broadband Ireland, until the milestones set down in the contract have been achieved and there are a comprehensive set of protections and legally binding obligations set out in the Contract which include a suite of key performance indicators to ensure the service is maintained appropriately.

The subsidy is capped as a maximum figure and National Broadband Ireland bears all risk beyond that provided for within the subsidy allowed. This includes, for example, the cost of materials, labour and lower than expected take up.

The subsidy is divided into:

- deployment subsidy which is paid retrospectively on a milestone basis in respect of the successful deployment of the pass network

- connection subsidy which is paid when connections have been made by NBI

- conditional and contingent subsidy which is a capped amount that can only be drawn down in certain specified circumstances where it was not possible for the bidder to quantify accurately as part of the final tender submission such as extreme weather events.

The controls set out in the NBP contract will play a key role in ensuring that costs are minimised and deliverables are met.

Question No. 81 answered with Question No. 67.