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National Broadband Plan

Dáil Éireann Debate, Tuesday - 14 December 2021

Tuesday, 14 December 2021

Questions (38)

Ruairí Ó Murchú

Question:

38. Deputy Ruairí Ó Murchú asked the Minister for the Environment, Climate and Communications if he will address the issues raised in articles (details supplied) relating to the national broadband plan, including National Broadband Ireland’s corporate structure, financial arrangements, long-term viability and ability to deliver on the national broadband plan. [61546/21]

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Oral answers (6 contributions) (Question to Environment)

I will not repeat myself completely but I ask the question again about the €175 million equity investment and whether it could be achieved by way of debt. Was that understood from the very beginning? Will the Minister of State go into some detail on what seems to be the early release of the performance bond? On the question of premises passed, the Minister of State has indicated the figure will be 35,000 by the end of December but are we talking about 50,000 or 60,000 by the end of January? Will he give an exact timeline on that?

The first question is about the equity investment, how much money went in, what form it was in and so on. The investors are providing equity funding in NBI Infrastructure and NBI Deployment through the purchase of shares and the provision of shareholder loans. Using both of these instruments is a standard form of investment infrastructure and this is in compliance with the project agreement. The interest earned on shareholder loans forms a large part of the overall commercial returns for the investors and this is aligned with the tender submission, which met the minimum requirements regarding financial standing and funding.

Clause 40 of the project agreement requires that payment of shareholder contributions on or before the effective date be in accordance with schedule 3.12 and for the agreed funding to be in place. The funding takes the form of a subscription guarantee agreement between Metallah and NBI Infrastructure and NBI Deployment plus a guarantee in favour of NBI Infrastructure and NBI Deployment from Granahan McCourt Limited. Subscription agreements between Metallah and NBI Infrastructure provide for a subscription for 1 million shares of €1 each, or €1 million, in each of NBI Infrastructure and NBI Deployment. We know this funding requirement is contained in the clause dealing with equity investment. There is also the issue of up to €178 million of 12% unsecured loan notes to NBI Infrastructure and up to €43 million in 12% unsecured loan notes to NBI Deployment, to be drawn down in tranches, with €4 million of this being a standby shareholder loan. We know these funding requirements are contained in clauses 2.2 and 2.3 of each agreement, entitled shareholder loan and rescue loan, respectively.

In fairness, the Minister of State has already agreed we need another forum and there was discussion on this earlier. We are possibly talking about a Topical Issues matter. I request publication of the results of the review to whatever degree it can be done. At least we can have the information in front of us before we have the wider discussion. I will go back to get the detail correct in my head.

The 35,000 premises are to be passed by the end of the year. When will the 50,000 or 60,000 premises be passed? We need that information. Could we have some information on the early payout of the performance bond? On the wider information, we will need some publication of all the detail.

I am absolutely happy to discuss with the Deputy the best way to get him the most information as quickly as possible. The whole purpose of this relates to the number of premises passed. We have a fixed-price contract for a fixed term and we must deliver 540,000 homes in seven years connected to fibre. That is the overall point of the exercise. It is to be done for a fixed price of €2.1 billion. We have a larger budget than that but that is what the contract states.

We have been informed that by the end of December, the number of homes passed will be in the order of 35,000, while between 50,000 and 60,000 premises will be able to order or preorder a service by the end of the year. For more than 121,000 premises, build is under way, demonstrating the project's reach and scale. In parallel, the Department is working with NBI to recalibrate the targets for 2022 and beyond to take account of the knock-on effects of the Covid-19 pandemic. The focus is to continue to build momentum in the build, catch up on the delays experienced due to Covid-19 and plan for acceleration. Final targets for 2022 are expected to be agreed early in the new year.

The figure I am going to need is what we think is going to be passed by the end of January. We had it in our heads that it would be 60,000 and the big worry is we are also meant to get in that year that there would be catch-up on Covid-19 delays. We are expecting a plan for that around March, although we accept it will not kick in until 2023 and beyond. We also expected the seven-year programme to be accelerated into a five-year programme, with all this laid out contractually in and around March. The fact we will not make a reduced target is incredibly worrying, especially in combination with the reports from the Business Post and others, which have put into the public domain the serious questions that remain about the financial and corporate arrangements. I will be sending the questions I have put on record directly to the Minister.

I have given the Deputy figures for the end of December and they are projections. I do not have figures for the end of January but I will come back to the Deputy with those tomorrow. I am happy to do that.

ComReg's quarterly report details what is going on in the broadband market and it is completely independent of the Government. It reports that 120,000 Irish households were connected to fibre in the past 12 months, which is a 50% increase on where we were a year ago, which itself was a 50% increase on where we were two years ago. We are in the position where Virgin has announced that 900,000 of its customers are being upgraded over three years to fibre and Eir has announced it is substantially upgrading all its customers to fibre. SIRO has passed 400,000 homes and is planning to pass another 350,000 homes. We are probably looking at €5 billion in fibre investment and there is a major desire and demand from the Irish public to be connected to fibre. We are seventh in Europe for broadband connections and we are doing incredibly well. We are a technological centre of Europe and the numbers of our broadband and fibre connections are accelerating because of that desire. I will do everything I can to ensure the Government subsidies provides that fibre connection to people in rural Ireland on the dates they are supposed to be.

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