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Broadband Infrastructure

Dáil Éireann Debate, Tuesday - 14 December 2021

Tuesday, 14 December 2021

Questions (29)

Ruairí Ó Murchú

Question:

29. Deputy Ruairí Ó Murchú asked the Minister for the Environment, Climate and Communications if he will address the issues raised recently in articles (details supplied) in relation to the national broadband plan, including National Broadband Ireland’s corporate structure, financial arrangements, long-term viability and ability to deliver on the plan. [61987/21]

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Oral answers (6 contributions) (Question to Environment)

Will the Minister of State address the issues raised recently in articles in the Business Post and The Currency on the national broadband plan, including National Broadband Ireland’s corporate structure, financial arrangements, long-term viability and ability to deliver on the plan. The Government has had its review so we want the results. We also want to know how many premises will be passed, how many connections have been made and whether we will reach the target of 60,000 by the end of January.

The contract for the national broadband plan State-led intervention, which was signed with National Broadband Ireland in November 2019, is a comprehensive and detailed document. To protect the State investment and ensure that the national broadband plan milestones and deliverables are met, the contract has been designed to include extensive protections, quality checks, reporting and monitoring obligations.

I am aware of recent commentary in relation to the national broadband plan contract, in particular with regard to the ownership of National Broadband Ireland and the investment of shareholders' funds.

On the matter of ownership, Metallah Limited is the 100% owner of the shares in the capital of National Broadband Ireland, save for the special share of the Minister, which does not provide ownership rights. Granahan McCourt Dublin Limited is the 100% owner of the shares in the capital of Metallah Limited and is owned 50.9% by Granahan McCourt Fund Limited, a David McCourt controlled company, and 49.1% by Tel-IE Broadband Sari, an entity managed and controlled by Oak Hill Advisors. The ownership structure remains as it was at the signing of the contract.

The investors are providing funding through the purchase of shares in National Broadband Ireland and the provision of shareholder loans. I am advised that utilising both instruments is a standard form of investment in infrastructure companies and that the reference to both as "equity investments" is common practice.

The initial drawdown of committed shareholder funds by National Broadband Ireland was €100 million in January 2020. This was drawn down before the release of any subsidy by the State. I am advised that no shareholder distributions have been made to date. I am also advised that a further drawdown of investor funds of €20 million will be made in the coming weeks and that the full amount of committed equity, €175 million, is covered by guarantees.

When the contract was signed, was it understood that the €175 million equity investment could be by way of debt? What exactly are we talking about in respect of the guarantee? There is information available on the fees paid in 2020 but, in his review, did the Minister come up with figures for 2021? What is the current interest bill? What is the position on the high-cost loans, in particular? At this point in time, we understand the figure is about 11.8%, but we want to know where we are. David McCourt spoke about seeking new investors. Have any names been put in front of the Department for approval? Has there been any interaction between the Department and these people? If so, could the Minister of State tell me who they are? Could he explain the early release of the performance bond? Did it need to be agreed by the Cabinet or was it just agreed by the Minister for the Environment, Climate and Communications?

I cannot answer all those questions in one minute but I welcome the scrutiny and questions and the requests from the media for further information. I am delighted to answer any question asked to me directly.

One of the stories that appeared last week had the headline, "How a hedge fund quietly took over the National Broadband Plan". The next day, 8 December, Deputy Mary Lou McDonald said in the Dáil that the majority shareholder of the consortium, National Broadband Ireland, is Oak Hill Advisors. Neither of those statements is true. A hedge fund has not quietly taken over the national broadband plan, although I was worried when I read the headline. Naturally, I went to the corporate lawyers and corporate accountants and asked whether there was any truth to the story. As it turns out, the majority share ownership continues as it was on the date of the signing of the contract. The ownership has not changed. If the ownership had changed, it would have required the consent of the Minister. It is not that there is a mistake in the story or some kind of error; it is that the whole thrust of the story, the headline, and repeated elements throughout to the effect that there had been a secret takeover by a hedge fund is simply untrue.

I accept the Minister of State is not going to have all the answers but, on that basis, I believe we are going to have to have some sort of forum in which we can have a proper over-and-back discussion. We have all been very frightened about the ability of National Broadband Ireland to deliver on the national broadband plan.

I will ask a few more questions for the record but I would like the Minister of State to deal with the issue of delivery and state whether the target of passing 60,000 premises will be reached by the end of January. What exactly is the current position? We will look for some detail on the exact amount that Granahan McCourt owns in monetary and percentage terms. Is the minimum share capital €2 million? If so, will the rest be in debt? I am looking for figures because the Minister, Deputy Eamon Ryan, disputed the duplication figure as regards Eir in the Business Post a number of weeks ago.

I will be delighted to take part in any forum to share information about this. I absolutely believe in transparency.

I have asked my officials how much more of the contract we can publish. A huge amount of the contract has been published. Some parts have been redacted. As I understand it, that is in line with the mandatory provisions of section 36 of the Freedom of Information Act 2014. In so far as it is possible, I have asked my officials to ascertain what they can do to expedite the process.

The Deputy asked about the number of homes that have been passed. NBI has confirmed that, as of early December, almost 150,000 premises are under construction or constructed across all 26 counties. In line with the remedial plan to address Covid-19-related delays, which was agreed with the Department earlier this year, NBI was to have passed almost 60,000 homes available for immediate connection by the end of 2021. As would be expected with a large-scale infrastructure build, challenges have been encountered as a result of Covid-19 and other issues. NBI is actively working with its network and build partners to address these issues as they arise and recently confirmed to the Department that the number of premises passed by the end of December will be approximately 35,000, while between 50,000 and 60,000 premises will be able to order or to pre-order a service by the end of the year. For more than 121,000 premises, build is under way. This demonstrates that the project is reaching scale.

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