Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

National Broadband Plan

Timmy Dooley

Ceist:

48. Deputy Timmy Dooley asked the Minister for Communications, Climate Action and Environment the role of companies (details supplied) in the national broadband plan; the contractual and financial powers of the State with regard to these companies; and if he will make a statement on the matter. [22060/19]

This question relates to the companies which may be providing the financial backing to the national broadband plan. In response to a parliamentary question tabled by Deputy Cowen, Fianna Fáil received the following answer:

The holding company and Granahan McCourt Dublin (Ireland) Limited will have agreements in place with the ultimate investors, Granahan McCourt Dublin (Ireland) Limited, Tetrad Corporation and McCourt Global LLC., in respect of both corporate governance and equity funding for the project.

However, it was reported in this week's edition of The Sunday Times that McCourt Global is not an investor. I ask the Minister to tell us which is the case.

The national broadband plan is a plan to design, build and operate a network which will make high speed broadband available to every home in rural Ireland within seven years and to continue to operate the service for 35 years. Granahan McCourt relied on the resources of Tetrad Corporation and McCourt Global LLC to demonstrate its economic and financial capacity for the purposes of the pre-qualification process and the requirements for doing so are set out in the project information memorandum, including at section 10.2, and the pre-qualification questionnaire. Tetrad Corporation and McCourt Global LLC provided letters of support as part of that process. Tetrad Corporation and McCourt Global both reiterated their support at final tender and Tetrad Corporation provided a commitment letter in relation to the equity required for the project. The equity commitments will be contractualised in advance of contract award. This means that the Minister will have the right, through those contracts, to enforce the equity commitment on behalf of the project. This committed equity from the bidder will be invested ahead of the Government subsidies, thereby placing this investment at risk first.

The Minister has gone ahead and appointed Granahan McCourt as the preferred bidder for the national broadband plan, yet he has not received basic information on the bidder. What is the full membership of the consortium and who is ultimately financing it? The Minister has confirmed that Granahan McCourt did not even have the €175 million in equity that was needed up front so who is providing the money? I ask the Minister to provide a breakdown of who is involved in that.

In the event of anything going wrong, we have been told in recent days by the Minister and the Taoiseach that Granahan McCourt will be responsible for up to €2.4 billion of funding. However, it did not have €220 million or even €175 million at the start. Who is providing that cover? What instrument will be used to provide that cover? The project information memorandum seems to suggest that all that is required is a letter of comfort and that such will suffice.

I ask the Minister to respond.

That is not enough.

We cannot have further debate. The Deputy's time is up.

The Taoiseach indicated that there was €2.4 billion on the hook but now we are being told that the capital is all that is involved.

The position is that the commitments in relation to equity will be contractualised in advance of contract award. Any committed funding that has not been drawn down by National Broadband Ireland at financial close will require a guarantee in a form that is acceptable to the Department. The Department will have a legally enforceable contract in relation to the equity that has to be provided. That equity will be rolled into the company and all of it must be in the company before any equity could be withdrawn or returns made.

In terms of the €2.4 billion, the Deputy is correct that the company is exposed to the full risk of funding the investment right out to the 25 year period and while the State's commitment is capped, the company has no such capping. The company not only has to provide that initial equity of €175 million and the working capital of €45 million but it is also exposed to the risk that if any of the projections do not materialise, it could have to make additional equity investments.

It is clear now that the only commitment that Granahan McCourt has to make, along with the myriad of companies that sit behind it supporting it and providing it with letters of comfort, is to invest €175 million of equity. It is also clear from the Minister's answer that all of that €175 million may not be in the company by the time the contract is signed. The Government has talked loosely about an additional €2.4 billion of exposure. I ask the Minister to confirm that there will be no encumbrance or lien on any asset of Granahan McCourt or any of its support companies to ensure that the money is available in the event of the performance of the contract not being as expected. I want clarity. Will there be some legal connection or instrument to encumber that €2.4 billion in the event of the contract not performing as expected?

The position is that the contract will provide an enforceable equity commitment on behalf of the project which will cover the equity involved of €175 million. The company will also have to provide all of the working capital. As I indicated in my initial reply, the State will not be making any commitment to make a payment until and as the roll-out is delivered.

In terms of the longer-term prospects of this company, it is operating in a controlled market where it will pay a price that is fixed under the contract, which is at the same price that access to urban broadband will occur. At year 25, it is expected that its total turnover will be of the order of €150 million. That is the size and scale of this operation. The commitment of equity is absolutely secured in the contract and the State will have recourse in respect of that. If at any point the company fails to meet its commitments, as set down at six different milestones, the State can intervene and repossess the assets.

National Broadband Plan

Brian Stanley

Ceist:

49. Deputy Brian Stanley asked the Minister for Communications, Climate Action and Environment if he will seek a full cost-benefit analysis of all State owned alternative models to deliver the national broadband plan. [21700/19]

My question also relates to the national broadband plan. Has the Minister considered commissioning a cost-benefit analysis on alternative models, given the difficulty with the current plan and the difficulties arising from it, particularly with regard to the option taken by the Government of the gap model with the sole bidder, Granahan McCourt?

The availability of high speed broadband to every home in the country will unlock the door to equal participation in digital transformation which is already transforming our lives and will continue to bring fresh opportunities that will be crucial to operations in Ireland's regions.

My Department commissioned a comprehensive cost-benefit analysis on the national broadband plan, as is a mandatory requirement under the public spending code. A cost-benefit analysis benefits report and a detailed benefits calculation annex were published in 2015. This analysis was updated over the last four years and the finalised cost-benefit analysis was published earlier this month. Alternative options for delivering high speed broadband were also considered in the context of only one bidder remaining in the process and this analysis has also been published. Each of these alternatives was considered against the cost-benefit analysis framework. In stress testing a number of alternative options, it is not expected that a full cost-benefit analysis will be carried out. Rather, the approach is to evaluate the salient changes that other options would bring in the context of the general framework of benefits and costs. Some options sought to reduce the area covered, alter the technology, delay the roll-out or alter the model underpinning the tender. This all involved an examination of costs, potential changes in timing and roll-out, state aid requirements and so forth, depending on the alternative under consideration. That analysis concluded that these alternatives would take longer to reach 100% of the premises in the intervention area and in some scenarios would involve leaving some premises behind. In addition, the analysis concluded that the alternatives considered could potentially result in a higher cost to the State and would require a consultation on a new strategy, along with a new procurement process and state aid application. Some of the alternatives considered were unlikely to provide the level of future proofing required under the European Commission's strategy for a gigabit society.

I thank the Minister for his reply. Unfortunately, a detailed cost-benefit analysis was not done on the alternatives. It is clear that the Government does not have a plan B, despite what has unfolded in recent weeks. The Minister is responsible for the national broadband plan which is a disaster for the Irish taxpayer. It is based on a failed tendering process, a flawed cost-benefit analysis, as pointed out by his own Department, and it does not represent value for money. What is even worse is that the taxpayer will not own one metre of cable when the 25 years are up. Everything stays with the private company which will be bankrolled by the Irish taxpayer. The failure to conduct a proper cost-benefit analysis of the alternatives is reckless, both from the point of view of providing broadband and from a financial perspective.

We know from the documents released last week that there have been two contingency reports, one carried out in 2018 and one in 2019. They told of two viable options. To quote directly from the 2019 report, officials in the Minister's Department reported that alternative options "have not undergone a project appraisal or any CBA analysis". Will the Minister tell the taxpayer why he chooses not to carry out a cost-benefit analysis on viable State-led alternative options?

I assure the Deputy that the cost-benefit analysis was conducted according to strict procedures and that, contrary to his claim, my Department did not in any way suggest that it was not done in the correct manner. I also assure the Deputy that we have examined every alternative. One of the things we have learned from conducting public projects in a robust way is that one has to be sceptical about the different alternatives. In 2015, five alternatives were considered, ten were considered in 2018, and three alternatives were considered in 2019. At no point did we overlook the importance of testing plan A, the one we now have on the table, against possible alternatives. Every time we did so we found that the alternatives would result in some people being left out, a longer delay for the project, or a higher cost. I do not know whether the Deputy wants people to be left out - it is not clear from his comment whether he is advocating for that - or whether he wants the process to be delayed to allow a new tendering process to be completed. I know he advocates a different model that would require such delay. It is important that the Deputy and other Deputies be honest with the public. We have a plan that is capable of delivering. If one wants to take an alternative approach, one has to look at whether it will deliver cheaper, sooner, and in a better way.

The Minister suggests that an alternative would have to be cheaper. How much of the €2.95 billion State subsidy will be paid to another private company, Eir, for the use of its poles and ducting? We have a network in place. As regards people being left out, the network to which I am referring, that of the ESB, covers every house while Eir's does not, even though it has poles all over the place, some of which are falling over. As regards the cost, if we have infrastructure, why does it make sense to rent or lease other infrastructure on which to hang cables or through which to duct it? Sinn Féin has tabled a motion to bring this issue before the Dáil on 11 June. We have put forward the basis of an alternative plan for delivering value for money through public ownership, which we believe is the best model. I fail to see why the Minister has ignored the advice of the most senior officials in the Department of Public Expenditure of Reform and in his own Department. Perhaps he will tell me.

To explain to the Deputy, the proposal involves rolling out 146,000 km of fibre. We chose to adopt the approach of using an existing network, which could either be that of Eir or the ESB. Of course, because this project involves state aid, one cannot specify which must be used. It is up to those delivering to choose based on market competition. One option cannot be designated. However, the price paid for rental is controlled by ComReg. It is entirely independently controlled.

How much is that?

That price will be payable whether ESB poles or Eir poles are used. Under the estimate, the cost of rental over 25 years will be €1 billion, which is €40 million a year.

That is €1 billion of taxpayers' money.

That is a ComReg regulated price which is independently set. It can be altered by ComReg. It would have to paid whether ESB poles or Eir poles were used. This contract allows the contractor to choose whether to use the ESB, Eir, the metropolitan area networks, MANs, or any other network it chooses.

Climate Change Policy

Timmy Dooley

Ceist:

50. Deputy Timmy Dooley asked the Minister for Communications, Climate Action and Environment the position with regard to the declaration of a climate and biodiversity emergency; the actions he will take in view of this decision; the status of the response to the report of the Oireachtas Joint Committee on Climate Action; and if he will make a statement on the matter. [22061/19]

Two weeks ago the Dáil declared a climate and biodiversity emergency. The Taoiseach subsequently described the declaration as a mere symbolic gesture. He failed to note that the declaration was part of a motion which endorsed immediate action in the form of implementation of the report of the Oireachtas Joint Committee on Climate Action. Will the Minister confirm that the Government's forthcoming plan will reflect all recommendations and timelines set out in the committee's report?

All of us in the House will agree that tackling climate change is one of the greatest challenges facing humanity. The deliberations of the committee and the very lively participation of all members, including the questioner, is testimony to the interest of the Oireachtas. As the Deputy recognises, I have been asked to prepare an all-of-Government climate action plan to ensure Ireland makes an effective transition to a low-carbon economy and creates a climate resilient society. This will involve radical change in every home and workplace with regard to how we generate power, how we travel, and how we farm our land. It is a collective challenge of enormous scale and importance.

I warmly welcome the unanimous vote of the Oireachtas to endorse the all-party report and to declare a climate and biodiversity emergency. This builds on the work of the Citizens' Assembly and provides a strong platform on which to build an effective implementation plan.

Every Department has been asked to examine the recommendations of the Oireachtas committee which fall within its remit and I will be seeking to integrate proposals put forward by the Oireachtas committee into the climate action plan. I have signalled our commitment to achieving 70% of supply from renewables in the electricity sector and to building an electric vehicle, EV, charging network to facilitate transition to no non-zero emission vehicles being purchased in Ireland from 2030 onwards. In respect of biodiversity, primary responsibility in this area lies with my colleague, the Minister, Deputy Madigan, who has engaged with me and my Department on the preparation of the climate action plan but who has also developed specific policy initiatives for biodiversity and who has recently hosted Ireland's first biodiversity conference.

It has already been widely reported that the Minister's plan will be different in including new measures and responsibilities to be introduced across the public sector. Indeed the Minister has used the word "radical" on a number of occasions. This would be a welcome development but this plan will be this Government's third climate related strategy. Previous strategies have lacked not only substantive measures but also commitment to implementation and a clear idea of impact. We cannot accept a business as usual approach that allows industries to use sustainability and efficiency as buzzwords while failing to ensure measurable progress in other sectors. Has the Minister's plan been analysed by the Environmental Protection Agency or the Climate Change Advisory Council to provide an independent analysis of its effectiveness? If such analysis has not been carried out, I hope that it will be before the plan is published, particularly with regard to the emissions reduction that will be achieved. Will the Minister also confirm that the necessary legislation will be enacted this year, especially amending legislation to provide for necessary targets and a new accountability regime? Will the Minister set out how the Oireachtas committee's recommendations will be reflected in the national energy and climate plan to be finalised at EU level by the end of the year?

I assure the Deputy that I recognise the importance of the work done by the Oireachtas committee and that I absolutely accept the importance of a much greater level of transparency and accountability and the importance of setting of clear targets which will be adopted by each sector. We will be adopting legislative proposals to ensure that the Oireachtas plays a far greater role. I assure the Deputy that we are drawing on the very best analytic support from the Climate Change Advisory Council, the Environmental Protection Agency, EPA, the Sustainable Energy Authority of Ireland, SEAI, and many other public agencies to assist us in developing this plan. I am also fully conscious that success will involve every home, enterprise, workplace, pupil, and worker getting involved. One of the challenges we face is how to mobilise that much wider group. I fully accept that Government must lead the way and that it must lead by example and create the framework, but we must also work collectively to draw people into the challenge we mutually face.

It is well accepted that this cannot be solved through legislation alone, but the legislation will have to show leadership, as will all of us in this House. While I know issues of biodiversity are somewhat outside the Minister's sphere of influence, the declaration of this House was significant in asserting a biodiversity emergency and in calling for a citizens' assembly to address the equally disturbing ecological crisis. A major global assessment recently found that ecosystems are rapidly declining and that 1 million species are at risk of extinction, including several species native to Ireland. The necessity for a citizens' assembly to examine this crisis is a reflection of the failure of the Government to integrate biodiversity protections adequately into our policymaking.

I hope that can be achieved and such a discussion can take place in a citizens' assembly. That, of course, will require the Government to ask for that to happen.

How will the Government amend departmental strategies, increase investment in habitat conservation and protection and ensure that necessary resources are made available to relevant State agencies? While it is not in the Minister's sphere of influence, he might be able to pass it on to the relevant Minister, noting that it is part of the wider climate change issue. I know the Minister has ongoing dialogue with other Departments in that regard.

I understand that the Minister, Deputy Madigan, has introduced to the House in the Wildlife (Amendment) Bill a new biodiversity duty, obliging public bodies to work to reduce the impacts of their activities on biodiversity. She has also published the National Biodiversity Action Plan 2017-2021. She convened the national conference, which I attended. It is interesting that a number of public bodies made substantial commitments to habitat restoration as part of that conference. The work is ongoing on the biodiversity sectoral climate change adaptation plan, which is part of the obligations we have undertaken. I will convey to the Minister the Deputy's desire to see wider citizens' involvement in the initiatives in this area.

Air Pollution

Peter Fitzpatrick

Ceist:

51. Deputy Peter Fitzpatrick asked the Minister for Communications, Climate Action and Environment the measures he is putting in place to combat air pollution (details supplied); and the measures he is taking to reduce domestic solid fuel burning. [21787/19]

What measures is the Minister putting in place to combat air pollution to reassure GPs that it is safe for their patients to breathe in fresh air? Emissions from solid fuel burning throughout the country and transport emissions in large urban areas should not be taken for granted.

Recent scientific evidence indicates that air pollution is more damaging at lower concentrations than was previously understood. With this in mind, we are committed to publishing the national clean air strategy this year, which will provide the policy framework necessary to identify and promote integrated measures across Government that are required to reduce air pollution and promote cleaner air, while delivering on wider national objectives.

Under the national emission ceilings directive, Directive (EU) 2016/2284, more stringent emission reduction targets for 2020 and 2030 have been set, as percentage reductions from 2005 emission levels, for five key pollutants, namely, sulphur dioxide, 65% reduction by 2020 and 85% reduction by 2030; nitrogen oxides, NOx, 49% reduction by 2020 and 69% reduction by 2030; non-methane volatile organic compounds, NMVOCs, 25% reduction by 2020 and 32% reduction by 2030; ammonia, 1% reduction by 2020 and 5% reduction by 2030; and fine particulate matter, 18% reduction by 2020 and 41% reduction by 2030. The directive requires member states to prepare a national air pollution control programme, NAPCP, to identify the programmes and measures that will deliver on these reduction targets. Ireland’s NAPCP is currently open for public consultation.

While Ireland’s air quality compares favourably with more industrialised and urbanised countries, we have specific challenges which need attention. In terms of overall annual emissions, we have a particular problem with ammonia from agriculture and, to a lesser extent, with NMVOCs and NOx.

Separate from annual emission levels, Ireland faces challenges with ambient air pollution - the concentration of a particular pollutant at a particular place and time. Thresholds for ambient air are established in the clean air for Europe directive, 2008/50/EC. We have a problem with particulate matter in our smaller towns and villages, associated with the burning of solid fuel for domestic heating. In this regard, I am disappointed that a number of coal firms have indicated that they would challenge the decision of two former Ministers to extend the smoky coal ban nationwide.

Additional information not given on the floor of the House

There is also some concern about how increased economic activity may impact on levels of NOx from transport in our cities.

As many air pollutants come from the combustion of fossil fuels, there is a significant potential for the successful execution of a climate action plan to positively impact air quality both in ambient terms and overall emissions. A key focus of work in my Department is to ensure that synergies are maximised between climate plans and the national clean air strategy with the purpose of reducing the health and environmental impacts of air pollution in the most efficient manner.

The air we breathe is growing dangerously polluted. According to the World Health Organization, nine out of ten people now breathe polluted air which kills 7 million people across the world every year. In Ireland premature deaths caused by air pollution are estimated at 1,200 people per year. Air pollution is an invisible killer. One in five children in Ireland suffers from asthma and four deaths a day are directly associated with poor air quality. The health effects are serious. One third of deaths from stroke, lung cancer and heart disease are from air pollution. This has the same effect as someone smoking tobacco and it is higher than the effect of eating too much salt.

I agree that it is a very serious issue. Air quality in Ireland compares favourably with more industrialised and urbanised countries but it is not without challenges. The Environmental Protection Agency's most recent annual air quality report was published in November 2018 and provides an assessment of air quality in Ireland in 2017. Values for all network sites were below the EU annual limit but exceeded the stricter World Health Organization guidelines for a number of pollutants at individual sites. I accept we have an issue that needs to be dealt with.

The EPA also reports that particulate matter from solid fuel burning remains the greatest threat to good air quality in Ireland, closely followed by nitrogen dioxide from transport emissions in urban areas. The report can be found on the EPA's website. It is a problem we are taking very seriously.

Air pollution is hard to escape as it is all around us. In my Louth constituency doctors are advising people not to go out walking as the air is polluted, which is very serious. The true cost of climate change is felt in our hospitals and in our lungs. Air pollution is harmful to everyone's health. What is the Government doing to combat the problem? What measures is it taking to reduce domestic solid fuel burning?

Like the Minister of State, I like walking and running. Over recent years in the small town where I live I can actually feel the pollution in the air. The country has a serious problem with obesity and we are trying to encourage people to go out. I ask the Minister of State to let people know what the Government is doing to combat this issue. I feel that it is a neglected area. My six year old grandson is a David Attenborough fanatic and he is asking me these questions. I want the next generation to realise that we are doing our best. When will this start? We need to start today.

Recent scientific evidence indicates that air pollution is more damaging at lower concentrations than was previously understood. Tackling the sources and causes of air pollution is a significant challenge and will form part of the overall climate action plan we will put in place. It involves emissions from transport, industry, agriculture and shipping and the use of solid fuels in homes. It goes across a wide spectrum and is a major challenge. Given the wide range of pollutants, it is important that action is co-ordinated across these sectors. A number of plans are under development, including the national air pollution control programme and the national energy and climate plan, which is relevant to the clean air agenda. As part of this renewed emphasis on the importance of air quality, the Department is also funding the ambient air quality monitoring programme which will greatly improve the data available on air pollution in Ireland, facilitating the design and targeting of policy measures to tackle it.

National Broadband Plan

Catherine Murphy

Ceist:

52. Deputy Catherine Murphy asked the Minister for Communications, Climate Action and Environment the number of cost-benefit analyses undertaken before the decision was made to grant preferred bidder status to a consortium regarding the national broadband plan; if the analyses will be published; if the initial investment in the plan by the preferred bidder will be released in one block or in tranches; and if he will make a statement on the matter. [21733/19]

The question has two elements to it. One relates to the cost-benefit analysis and if all of the updates to the original cost-benefit analysis have been published. If not, when will they be published? The second aspect asks whether the initial investment by the preferred bidder will be released in one block or in tranches. Is that known at this stage?

To some degree the earlier question from Deputy Stanley covers the Deputy's points.

The original cost-benefit analysis was commissioned in 2015 under the terms of the public spending code and has been published. This was updated over the past four years and the finalised cost-benefit analysis was published earlier this month.

This was done after detailed evaluation and engagement with the bidders. The cost–benefit analysis was carefully scrutinised before it was published.

Regarding the investment by the bidder in the national broadband plan, this will be in tranches in the initial years of deployment when capital costs are highest. While the subsidy to be invested by the State is capped, the bidder's equity will be invested ahead of Government subsidies, thereby placing the bidder's investment at risk first. There are separate subsidies to cover the costs of passing, and then connecting, rural homes. These are paid retrospectively and only on independent verification of the achievement of milestones set out in the contract. The bidder will also bear the risk of additional equity injection requirements over the life of the project if some of those projections are wrong. As I indicated to Deputy Dooley, the commitment of the equity will be dealt with in the detailed contracts that are now being drawn up.

The Minister has a routine of knocking on doors in his constituency, not only at election time, so he must be acutely aware of the concern over the escalation of the costs, the response of the Secretary General of the Department of Public Expenditure and Reform regarding the risk to the State, and the fact that we will not own the infrastructure if the plan goes ahead under the gap-funding model.

Is the Minister concerned that, in its cost-benefit analysis, the Department of Public Expenditure and Reform pointed to the kinds of risks that have been stated on the public record? Has he concerns at all in that regard or over the escalating costs? He must be hearing about them on the doorsteps. We are certainly doing so.

Does he know who is in the consortium? I have asked this at the Committee of Public Accounts on several occasions. As late as this morning, we were told that we could not to get the information at this point and that it was not available. Surely we should know who the beneficial owners are.

People obviously raise the issue with me. When I explain to them that Telecom Éireann was sold 20 years ago and that we do not own the infrastructure and rely on the private sector to deliver for rural areas, they understand our position on providing 146,000 km of fibre to connect rural areas to the network, which is important for our future. I explained to the people that we considered every alternative, as I outlined to Deputy Stanley. We sought to determine whether there were cheaper ways of proceeding. We evaluated the cost at several gateways to see whether there was a cheaper way, and we found there was not. Those are the explanations I give.

With regard to the critique of the cost-benefit analyses, I assure the Deputy that the cost-benefit analysis carried out in 2015, which was published, and that in 2019, which is being published, are absolutely robust. I acknowledge that in the process of verification of the second cost–benefit analysis, there was scrutiny of the benefits, which were reduced, and there was scrutiny of the costs, which were also reduced. That was done, however, with full participation on the part of those concerned, who did the work professionally. That was an example of the system working. It was a matter of making sure that any cost–benefit analysis was subject to due diligence so we would now have confidence in it.

The Secretary General of the Department of Public Expenditure and Reform does not agree with the Minister because he was very forthright in his response on the cost not outweighing the benefits. Would this not, in its own right, prompt the Minister to re-examine the exposure of the State to the cost being talked about in respect of the contract?

I will not enter into a public dispute with the Secretary General of the Department of Public Expenditure and Reform. He scrutinised the figure of 30%, concerning benefits being greater than costs, and challenged the benefits, as is his job. The cost–benefit analysis was robust, however, and it showed the figure was verifiable. The other point I would make to the Deputy is one that is intuitively understood. The assumptions underpinning the cost–benefit analysis were extremely conservative. For example, it was assumed that 4% of white-collar workers in the area would take up remote working. We all know that considerable transformation is happening. The assumptions ignored the benefits of digital education or digital health. We are all aware that technology is coming and the broadband connectivity can allow people to participate remotely in health monitoring and education, which will transform both businesses, homes and participation.

A major part of the reason we are doing this is not just the static benefits one can measure today that are accounted for in a cost–benefit analysis; there is also the belief that digital transformation will be crucial to fair participation by people in rural areas in enjoying the benefits all of us will enjoy.