Joint Committee on Transport and Communications díospóireacht -
Wednesday, 29 Jun 2022

National Broadband Plan Update: National Broadband Ireland

Chairman

The purpose of the meeting is to receive an update on the roll-out of the national broadband plan. On behalf of the committee, I am pleased to welcome from National Broadband Ireland Mr. Peter Hendrick, chief executive officer, and Mr. T.J. Malone, chief executive officer for deployment. They are very welcome.

On privilege, witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against a person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity.

Therefore if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they be physically present in the confines of the Leinster House complex in order to participate in public meetings. Reluctantly, I will not permit a member to participate when they are not adhering to this constitutional requirement. Any member who attempts to participate from outside the precincts will be asked to leave the meeting. I ask members participating via Microsoft Teams that, prior to making their contribution, they confirm they are on the grounds of the Leinster House campus. Members attending in the committee room are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19.

I invite Mr. Hendrick to make his opening statement on behalf of National Broadband Ireland.

Mr. Peter Hendrick

I thank the committee for the invitation to meet with it again and the opportunity to provide a progress update on the work of National Broadband Ireland in rolling out the national broadband plan. Since we last met the committee, significant progress has been made and I am glad to be able to tell members that we are gaining real momentum in delivering the project. As committee members know, we have agreed revised targets with the Department of Environment, Climate and Communications and we are committed to delivering more than 102,000 premises passed by the end of January 2023. Today we have 330,000 premises surveyed, which is 60% of the entire intervention area, and detailed designs for 313,000 premises are complete. These activities, which are vital precursors to the main build, are continuing at pace, and are now ahead of profile. On average we are building for between 7,000 and 10,000 premises each month with stability and predictability across the programme.

There are 182,000 premises where build works have either commenced or been completed, which we see as a leading indicator of progress and project momentum. At the end of June, that is tomorrow, the number of premises passed will be 63,652 and there will be more than 74,000 premises where the network is fully built. Nationally 636 broadband connection points, including 359 primary schools, have been installed. With regard to the most remote areas in Ireland, since our last engagement with the committee, NBI has progressed our fibre build activity on six islands off Mayo and Donegal. We will further advance island connectivity and build off Cork later this year.

Since January, we have added 300 additional workers to the project, a 25% increase, bringing total employment on the national broadband programme to more than 1,500 skilled workers. Importantly, 98% of this additional resource has been recruited to support build works. This includes the addition of a new build partner earlier this month, as Gaeltec Utilities Limited from Kilkenny joined us, bringing a wealth of experience in rural construction. With the addition of a further build partner, we anticipate build being under way for more than 40% of the entire intervention area by the end of the year.

With regard to demand for services on the NBI network, we have already connected 14,200 premises, or more than 22% of the premises we have passed. While it is still early days in the deployment, in those deployment areas where the service has been available for more than six months take-up rates have reached more than 30%. This initial indicator of demand for the network is surpassing anything we have ever seen in Ireland when compared to commercial roll-outs and in comparison to other international projects. We now have 56 retail service providers partnered with NBI to sell gigabit fibre products and services on the network. NBI's commitment to excellence in customer service and our best-in-class network allow service providers to integrate with our systems at unprecedented speeds. This is absolutely key to NBI's success as an open access wholesale provider.

The national broadband plan is addressing a digital divide between rural and urban regions. Recent research from EY, commissioned by the Department of Environment, Climate and Communications, shows that an increase in high-speed broadband services will underpin significant economic, individual and societal benefits. Key enterprise sectors such as agriculture and hospitality will see new economic opportunities opened for them, while assisting the Government in achieving balanced regional development.

As part of our regular stakeholder engagement NBI recently commissioned research that revealed seven in ten regional dwellers believe high-speed broadband could lead to higher-paid work, more than half would consider seeking new employment as a result of having access to high-speed broadband and more than 80% believe the national broadband plan would have a positive impact, improving their quality of life, helping the local economy and helping local people to start their own businesses.

I hope the progress I have outlined today will give committee members confidence that the roll-out is gaining ground. Of course, we will continue to provide regular updates to the committee by way of the quarterly update process agreed at our session in January. Delivering the national broadband plan is a source of great pride for our team at NBI and the extensive number of contractors involved in the project. Not only is it ahead of its time at an EU level, it is paramount to the success of Ireland Inc. Mr. Malone and I are happy to take any questions committee members may have.

Deputy Cathal Crowe

I thank Mr. Hendrick, Mr. Malone and the team for being here today. Moreover I thank them for their ongoing engagement. There is a lesson for Mr. Dalton Philips and the Dublin Airport Authority in this ongoing engagement with our committee. I am aware of pitfalls in Clare, and I am sure all committee members are aware of them in their areas. Such pitfalls are raised routinely with the witnesses, they are addressed and we move on. There is not a huge amount to go through today because of the ongoing communications. I do have some questions on the national situation and I would like an update on how everything is going in Clare. We had concerns as a committee that Covid would set National Broadband Ireland back. Will the witnesses tell the committee how things are going with regard to the catch-up and the overall target of fulfilling the programme in its entirety?

Mr. T.J. Malone

I thank Deputy Crowe. With Covid we are in a different place from where we were this time last year or even earlier this year. When Covid originally came it impacted massively on surveying in the early stages, the design and, consequently, the build. As the Deputy can imagine we were a new company that was establishing itself. It pretty much affected every part of our business and everybody in the business. We now have the systems and processes in place. The computer and IT systems have all been built and they are in place. We are ahead on the surveys and the designs. The impact of Covid now is not as big as it was. The only place it hits us now is on the road and in the build itself. Previously it had hit the entire company and every part of the business.

Deputy Cathal Crowe

Is the company on schedule in general?

Mr. T.J. Malone

For this year the figure is 102,000. We are probably about a month ahead of where we had predicted. We have caught up. We are passing and building the network between 7,000 and 10,000 premises a month at present.

Deputy Cathal Crowe

That is positive to hear. At our previous meeting the witnesses indicated there are areas at the tail end of the national broadband roll-out for which there is no silver lining, or certainly not one that is not a long way off. The witnesses indicated the company would try to move them forward and fast-track them. Will the witnesses update us on this? There are such places in the extremities of County Clare and the western parts of the county, and in places in other counties. Is National Broadband Ireland able to give the people in these areas any hope today that the fulfilment of connection to their homes might be a bit quicker than initially indicated?

Mr. Peter Hendrick

We have looked at a number of options for what we call rural extensions or very remote rural locations. The island programme is one of these scenarios where we are bringing connectivity to the islands. We have a programme to complete all of the islands. It might have been further on in our original programme plan. We may have updated the committee in March on looking at existing infrastructure that we can utilise to provide services for urban infill, adjacent infill and these rural extensions. We have run a procurement process with the telecoms industry. Two trials will commence in July for some of these services to see whether we can get connectivity to these premises.

Notwithstanding that we are undertaking these trials, what is very important is that it is not just a short-term service. If we are to utilise existing infrastructure we must be able to ensure the infrastructure will provide sufficient bandwidth for the next 25 years, or look at what point we would need to get to the premises with the national broadband plan roll-out.

Deputy Cathal Crowe

At the previous meeting the witnesses mentioned the option of using satellites in particularly remote areas where it would take a number of years to get the wires and cables. Is the company still looking at this to any great extent? Will the witnesses comment on how it is going to fill the gap?

Mr. Peter Hendrick

We are looking at wireless technology with one supplier for providing connectivity.

Again, we have to consider this in the long term. It might be an easy fix today in terms of providing connectivity but in the long term, through a lifetime of 25 years, the availability of bandwidth as demand grows and the cost of operating that may mean that it makes sense for us to deliver fibre to those premises. It is a balancing act but it is certainly something on which we are actively engaged right now.

Deputy Cathal Crowe

For most people, it is either NBI or tethering to a hotspot on one's mobile phone. You either have it in your home or you do not. How much dialogue does NBI have with mobile phone service providers to ensure they are not going to the same place and leaving the same gaps? How much joined-up dialogue is there to ensure that, as separate entities, they are collectively covering all of Ireland?

Mr. Peter Hendrick

The purpose of the national broadband plan is to deliver high-speed broadband to premises. When the contract was signed, the definition of high-speed broadband was 30 Mbps. We are starting with 500 Mbps because that is the benchmark in urban areas. This is about the urban-rural divide and ensuring the same service is available to rural dwellers as is available to urban dwellers. From a fixed broadband perspective, the project is clear. We are delivering a service that will match what is available in urban areas. In terms of mobile bandwidth, if we think about connectivity as a whole, ubiquitous gigabit connectivity is the ultimate ambition for the future in terms of where we see technology, demand and utilisation going. The roll-out of this fibre network will certainly be beneficial for mobile operators as well in terms of supporting their connectivity, such as mobile connectivity for people who are out on the road or whatever.

Deputy Cathal Crowe

NBI is not operating in isolation; there is good communication between the various entities.

Mr. Peter Hendrick

That is correct. There is good communication.

Deputy Cathal Crowe

I met members of NBI on site in Cratloe, County Clare, 12 months ago. They did a tour of various places in Ireland but we stopped at a level crossing. This could have been any level crossing in Ireland. The NBI staff told me that, at that time, licensing agreements with Irish Rail and other national entities were proving to be a barrier. NBI might get cabling a certain distance down a road but then have to cross a level crossing or a junction. Has NBI secured all of those licences to ensure that when broadband comes into a locality, it can be rolled out without too many difficulties?

Mr. T.J. Malone

I will take that question. We have ongoing dialogue with CIÉ at the moment. Iarnród Éireann, the company to which the Deputy referred, has come to the table. We have that agreement in place now and are working very well. In fact, it has been working extremely well with us since we got the agreement in place. We have agreements in place with the ESB to cross various areas. It controls some of the bridges across reservoirs. We have that in place now as well. The final one on which we are working at the moment is with Coillte. We have recently engaged with it to get that over the line in respect of areas where we might have to cross forestry.

Deputy Cathal Crowe

That is the last big agreement outstanding.

Mr. T.J. Malone

At the moment, it is the last big agreement outstanding. Transport Infrastructure Ireland has worked well with us as well.

Deputy Cathal Crowe

Many people in County Clare want to know where national broadband overall is at. As luck would have it, broadband has reached my corner of the county because of its proximity to Limerick city. It is lightning quick and really welcome. There are other people in County Clare wondering where the roll-out is at in the context of their homes. I ask the witnesses to update the committee on the current status of the broadband roll-out in County Clare.

Mr. T.J. Malone

No problem. There are just over 22,000 premises in the intervention area in Clare. At the moment, 1,726 premises have been passed and can put an order in for fibre and get it. We have 1,800 built. By the end of the year, there will be 5,760 premises built. We are making good progress.

Deputy Cathal Crowe

In what parts of the county will we next see NBI crews pop up?

Mr. T.J. Malone

Work is ongoing in Kilkishen at the moment. There is Corofin, which is outside Clare but will feed into the county. There will be Feakle, Dún na Rí and Ballinderry, which is in County Tipperary but feeds into County Clare. That is the format. At the end of the year, it will be approximately 26% in County Clare, so nearly a quarter of the entire intervention area will have a fully built network at that stage.

Deputy Cathal Crowe

That sounds good. On costs, is NBI fully funded? Is it within budget? Is everything kosher in that regard? Are there any financial difficulties ahead for NBI?

Mr. Peter Hendrick

From an equity perspective, we have drawn €120 million in equity so far. There is another €103 million of committed equity to the programme. The project is running at pace and we are well funded and financed to deliver it. We are delivering on our milestones to achieve subsidy claims and our take-up in revenue with the 56 operators that are engaged on the project is very positive from a take-up and demand perspective.

As regards the build, Mr. Malone referred to the number of contractors we have had on the project. We are now focused on ensuring the build programme is as efficient as possible in terms of where contractors are working so that we do not drive costs in the context of the build programme.

Deputy Cathal Crowe

It is a source of concern. Some 12 months ago, Roadbridge, a large civil engineering company that was building roads all over the country, seemed to have been in the healthiest state one could imagine but, suddenly, the company folded. NBI is in a similar realm. It is doing civil works. It is excavating and it has fuel costs, road crews and everything else, yet there are certain caps to the contract. In the context of the equity and money made available by the State for the roll-out, are there concerns or pitfalls of which the committee needs to be aware, be they relating to financial issues, roll-out speed or anything like that?

Mr. Peter Hendrick

From our perspective, managing costs, particularly fuel costs and the risk of inflation, is critical. The way we have set up the contract and managed it with the Department, however, has been critical in terms of how we deal with the funding and the funding cap.

Deputy Cathal Crowe

NBI is not seeking top-ups or anything like that from the Department.

Mr. Peter Hendrick

We are not seeking top-ups from the Department and do not foresee doing so. It is about trying to drive a build that is as efficient as possible such that we help contractors to reduce their costs, even specific costs such as a rise in the price of fuel. We are doing so by making their work flow much more streamlined and efficient to counter-balance the risk of inflation.

Deputy Cathal Crowe

How does that work? If I am a contractor and NBI is telling me to drive down my costs yet all my outputs are going through the roof, how can those two factors be reconciled?

Mr. Peter Hendrick

Mr. Malone will explain that.

Mr. T.J. Malone

We engaged with the Department. The existing procurement process we have under the contract is that we allocate and run mini tenders for each of the various deployment areas. Each of the four main principal contractors that are on the ground at the moment, with Gaeltec being a fifth one to come in, tender for the 20 deployment areas, for example, as we put them out at a particular time. The areas won by a contractor could be located anywhere in the country. A company may win a tender for an area in Cork and another in Donegal or Dublin. That leads to greater inefficiencies for the contractors. They could have a depot set up in three or four different locations, with management split between those locations. They would have to deal with different smaller local contractors on the ground in each of the different deployments. There is cross-over and inefficiency in overhead built into that. It was done for the right reason at the time, namely, to make sure we got the best value at any particular time throughout the process. We engaged with the Department and are currently working through a system by means of which we hope to be able to split the country into four regions. We will set out a region for each of the four principal contractors and bring a secondary contractor into each region as well. In effect, that will help to offset some of the inflationary areas the contractors are currently experiencing. It will reduce their overheads in staffing, travel and the warehouses, yards, offices and so on that they are using in each area. While it will not solve the entire problem, it will go some way to alleviating it.

Deputy Cathal Crowe

I thank Mr. Hendrick and Mr. Malone for their engagement. It is appropriate that a telecommunications outfit have good communication. Our guests should keep up that good communication and keep engaging with the committee. We cannot tie up the whole meeting today with parish pump issues, but that kind of engagement with us, as Oireachtas representatives on the ground, is very much appreciated.

Chairman

The latest agreement NBI has with the Department is that it will pass 102,000 premises by January 2023. When will it reach that figure? I got the impression from the initial comments of Mr. Malone that it is hoped that deadline will come back. When will NBI reach that 102,000 deadline?

Mr. T.J. Malone

At the moment, we are progressing very well. We intend to beat that deadline and bring it in a bit earlier. We are probably a month ahead of schedule at the moment.

As Mr. Hendrick said in his opening comment, we have about 63,500 premises passed and as of today, we have about 74,000 built. We are on a run rate of between 7,000 to 10,000 a month, bearing in mind that December and January are kind of half months. We are probably a month ahead at the moment, providing that we do not hit any other obstacles.

Chairman

The figure was 63,652 as of the date of the submission, and might be slightly higher today. NBI has to reach about 38,000 in order to reach 102,000. With a quick calculation, I estimate the time involved to be about five months. Is NBI confident at this stage that it will reach the figure of 102,000 by the end of the year? That would be significant, rather than doing so by the end of January 2023.

Mr. T.J. Malone

From what we are seeing at the moment, we would be confident. All that said, there could be obstacles that could hit us. We have confidence in the process at the moment.

Chairman

We will talk positively. It would be a milestone if NBI could be ahead of a target agreed with the Department at the end of 2022.

Mr. T.J. Malone

That is exactly what we are trying to do. We are definitely pushing. Before we came before the committee, we bumped into Deputy Calleary. When he was travelling home on Sunday he saw teams out working. We are working morning, noon and night to get this done. We believe we will bring it in ahead of target this year. The workforce is all very much aware of the need to get some wins on board.

Chairman

NBI will be targeting December.

Mr. T.J. Malone

No. We are a month ahead at the moment. If we keep going the way we are, that would bring us-----

Chairman

Then it will be December of this year, and that is to be welcomed.

I had a quick look at the statistics NBI provided to the committee when it came before us on a previous occasion, to which Mr. Hendrick made reference. The number of premises surveyed on that date was 308,000 and the figure is 330,000 today, an increase of roughly 7%. About 15,500 per month have been dealt with. The number of premises designed and in design totalled 250,000 then and the figure for today is 313,000, which is 60% of the total. That is roughly 14,000 per month, or 22% of an increase on March. The premises with build under way totals 182,000 now, and was 121,320 on the last occasion, a 50% increase or about 15,000 per month. A statistic which was not in the statement was the number of premises with fibre build under way, which is up about 4,000. That is a little bit behind. What is meant by the statement that with the addition of further build participants, with build being under way over 40% of the entire intervention area will be dealt with by the end of the year?

Mr. T.J. Malone

Taking the entire intervention area when we signed the contract, the total was 536,000 premises. By the end of this year, we will have commenced the build on the ground in 221,000 of those premises. That is just slightly over 40%.

Chairman

That is the number of premises with the build under way.

Mr. T.J. Malone

Either built, or under way.

Chairman

That is 212,000.

Mr. T.J. Malone

It is 221,000.

Chairman

This is the first time the NBI has been before us where, with any luck, it is now getting ahead of the agreed targets. That is something towards which we are very positively disposed. I will turn to some issues. The gap intervention area refers to 500,000 or more premises. Those areas beside blue areas have existing fibre broadband networks like Eir. Under the roll-out programme, a neighbour might not see fibre broadband going in for another three or four years. People look over a ditch at neighbours who already have fibre broadband. I know NBI is doing a body of work and was going out to tender to determine what it could do in that space. It is a space that is significantly relevant to us. I am in Limerick city but I cover a good rural area. This issue affects peripheral areas outside of the city. What is the current position?

Mr. Peter Hendrick

In our update in March, we shared that we had reached a pre-qualification stage with five bidders. That subsequently went down to three, and we could see the rationale for the three in terms of urban infill. In areas such as Dublin we have a number of amber areas in a predominantly blue area. We have adjacent infill where the threshold between blue and amber is at a particular level. The rural extension is very remote and will be dealt with in 2025 and 2026. We now only have two bidders. They are predominantly dealing with urban infill and the rural extension. We do not have an infrastructure partner today for the blue and amber transition.

Chairman

The two bidders will deal with what?

Mr. Peter Hendrick

They will deal with urban infill, where there is infrastructure in an urban area where there is also fibre very close. That mainly involves one-off homes in an urban environment. Rural extension is more remote in terms of wireless technology.

Chairman

Does NBI see any possibility of bringing fibre to the home for those rural houses? When Mr. Hendrick speaks about urban areas, does that mean the outskirts of a city or town?

Mr. Peter Hendrick

Predominately.

Chairman

Not rural villages.

Mr. Peter Hendrick

We are not talking about a rural village.

Chairman

Will there be the option of fibre to homes in rural villages?

Mr. Peter Hendrick

For very rural villages, no. Our network roll-out is very important in terms of getting to them. We are looking at wireless-----

Chairman

Why not?

Mr. Peter Hendrick

It is the backhaul element. While we are building fibre today, what is important is getting connectivity from a rural location back to data centres.

Chairman

There is no way that NBI could link into the likes of the Eir network.

Mr. Peter Hendrick

We are looking at that from a backhaul perspective. I consider that as somewhat separate. It is almost about how we accelerate our build programme.

Chairman

The benefit of that is that it would expedite the roll-out of fibre broadband to rural houses in village settings.

Mr. Peter Hendrick

There are two sides to that. We are looking at the ability to buy or procure backhaul from third parties such as Eir. Part of the challenge in terms of the roll-out plan is that when we go from survey design to build, when we do the survey it means we are testing infrastructure. While we are 60% through on the survey, and will be pretty much 60% through on the design side soon enough, we then have to provide those designs to Eir to do make-ready. As a precursor, we look to see whether we can get backhaul in place. If we can, we then need to decide whether we can bring that deployment area in early, if we can. We then give that make-ready to Eir to repair or replace poles.

Chairman

Where is that? That is a conduit to getting the roll-out of fibre broadband to those gap intervention areas which I would describe as amber areas alongside the existing fibre networks in rural areas. Where is NBI at in terms of agreeing that backhaul piece with the likes of Eir? In effect, Eir is the company which already has a fibre network rolled out in rural areas.

Mr. Peter Hendrick

In a lot of cases, we also have to look at the capacity and redundancy of infrastructure. One of the largest constraints is the capacity to do make-ready. If we took an area that was due to be dealt with in 2025 and brought it forward, we would, in effect, push another area out. The communication around this project is that we are trying to give people confidence that, even if a project is two or four years out, it will come. We have to be very careful that when we bring deployment areas forward that we do so on the basis of have the capacity to complete the Eir make-ready.

Chairman

When NBI speaks about capacity, in layman's terms what does that mean?

Mr. Peter Hendrick

Today, with Eir's capacity it commits to a certain number of poles it will replace per month and a certain amount of kilometres of duct it will install or repair.

Chairman

That is in terms of the overall contract.

Mr. Peter Hendrick

It provides the leading capacity to our subcontractors. We are engaged with Eir and it is accelerating the number of poles it will replace and kilometres of duct it will provide. We are managing that into our build programme in terms of how many premises we can deal with per month. Something we are also talking to Eir about is where we can do what is called self-install, and we hope to get some more feedback on this July. We can go in-----

Chairman

Where is that?

Mr. Peter Hendrick

We have a request in with Eir for self-install duct. Eir is currently engaged with the regulator on that. It is predominantly about the integrity of its network and the cost of repair. At the moment, that is in front of the courts with the Commission for Communications Regulation, ComReg, and we hope there will be a ruling in July.

Once that ruling is positive, it means we would look to bring that forward with Eir where we can start installing our own sub-duct where we are less dependent-----

Chairman

Is Eir doing that submission to the regulator in partnership with NBI?

Mr. Peter Hendrick

There is a product in the market today but it would not be something that NBI can use because it does not allow us to repair the duct. It would allow us to install a sub-duct-----

Chairman

In terms of NBI's discussions with Eir and the self-install, is NBI at a point where Eir is agreeable to allow NBI to do it subject to------

Mr. Peter Hendrick

Not at the moment. At the moment, Eir is going through this with ComReg in the courts around Eir trying to protect the integrity of its network. This is a product and service that is available in almost all European jurisdictions, including the UK, as operators are allowed to put sub-ducts into existing passive incumbent networks and repair any blockages that are in that duct. Therefore, once we have access to that product or service, it means we can bring forward some of those contractors.

Chairman

Is ComReg taking Eir to court on that?

Mr. Peter Hendrick

Eir is defending in court against the product due to protecting the integrity of its network and the cost of repairing the duct and who pays for that.

Chairman

The regulator is supportive of what NBI is proposing.

Mr. Peter Hendrick

The regulator is supportive of what we are looking to achieve; that is correct.

Chairman

If that came to pass, would it speed up the roll-out significantly?

Mr. Peter Hendrick

I will let Mr. Malone give the details.

Mr. T.J. Malone

Yes, it would increase it. It definitely would increase it at a fair clip if we got it done. The key to this is that the quicker we get it implemented, the quicker we can actually speed up. The longer it takes to get a product into the market and-----

Chairman

If the courts find in ComReg's favour, is Eir then required to do a deal with NBI on that self-install?

Mr. T.J. Malone

The way it works is that we have made a request to Eir for ourselves. We believe our request is slightly separate to what is going on in the court at the moment and that they are unrelated matters. We made a request to Eir on that basis. ComReg backed it up and said that it is an unrelated matter and, therefore, Eir should engage with us. Eir feels it could prejudice its case. The case is only a matter of weeks away so Eir is holding off until it sees the direction of travel as to where that case goes.

Once that case is held and we see some direction of travel, our view would be that it could go two ways on this. We would like to engage with Eir and develop a product under our existing major infrastructure programme, MIP, agreement. It would speed things up if we could do it under that particular MIP. If that does not work and we have to apply through a regulated access product as it would go, it could take anywhere between 12 and 18 months before we would actually have a product that was available for us to speed up the programme. Therefore, while the direction of travel-----

Chairman

NBI would have to apply to the regulator for that product.

Mr. T.J. Malone

We would have to apply to Eir, which then goes through the regulator. From what we have seen from the regulator so far, ComReg would be in favour of us getting a product and believes that we are------

Chairman

If it comes to pass that an accommodation is found whereby NBI can self-install and that will speed up the roll-out, does Mr. Malone see that this will in any way assist NBI with being able to get backhaul into the existing Eir network to allow NBI to expedite the roll-out of fibre broadband to those gap intervention areas that are alongside existing areas in rural Ireland? It is simple.

Mr. T.J. Malone

It will definitely bring forward and help us to speed up the programme. The Chairman spoke to Mr. Hendrick earlier. Many of the areas the Chairman is talking about are close by or next door to the Eir fibre network. If we think about it, Eir has 318,000 customers or something on that fibre network, and it tends to be the people who are in the more urban areas-----

Chairman

Correct.

Mr. T.J. Malone

-----because it built out from the urban part of it. By the nature of our roll-out, we are rolling into those areas pretty much as the start of our project because we are building, obviously, infill out towards the rural areas. For many of those ones that are close by, we are picking up on our programme very quickly now anyway without having to get that backhaul. If we think about it, we will have 102,000 premises-----

Chairman

People are going online and finding out they must wait. People in areas in County Limerick such as Lisnagry are being told they will be waiting three or four years. Will NBI be updating its system to say when they will get it? The final point for me is whether an opportunity will be provided in gap intervention areas if this self-install comes. I know it will expedite the roll-out. In terms of using and plugging into the existing Eir network for backhaul in those rural areas, could it expedite the roll-out of broadband to those areas?

Mr. T.J. Malone

It would expedite the speed, as the Chairman quite rightly said. It would not affect the backhaul about which Mr. Hendrick spoke. That is a separate issue. This would just allow us to get greater capacity and move at a faster pace.

Chairman

Is linking into the existing Eir fibre network in these rural areas an option?

Mr. Peter Hendrick

It is, but what we have to be very clear about is that we are not swapping one deployment area with another. First of all, if we find that we can get access to backhaul to a deployment area and increase our capacity to bring some of those deployment areas forward where we do have the ability to get backhaul, we can make those decisions. The two of them are joined together, however. We are looking to see where there is a sufficient and existing backhaul where we can bring deployment areas forward. We would not do it without the ability to be able to increase the capacity because we would not be switching one deployment area with another.

Chairman

That is okay.

Mr. Peter Hendrick

The self-install is, therefore, critical to our ability to bring deployment areas forward.

Chairman

If that self-install is allowed, NBI will be able to completely rethink its overall plan.

Mr. T.J. Malone

Correct.

Chairman

And that will be July.

Mr. Peter Hendrick

The earliest output from the regulator will be after the court case in July. As Mr. Malone mentioned, there will be a process then as to whether it would move straight into being a product or we would have to go through this regulated access product, RAP, request.

Chairman

There are 56 retail service providers partnered with NBI. Are all retailer providers partnered with NBI now?

Mr. Peter Hendrick

I would say over 90% of them are. One or two are still going through the on-boarding process.

Chairman

Is Eir on board now?

Mr. Peter Hendrick

Eir is on board and it is proactively selling; that is correct.

Chairman

Which of the big players is not on board?

Mr. Peter Hendrick

There is only one big player, which is more of an urban coax television and broadband provider.

Chairman

Who is that?

Mr. Peter Hendrick

It has never gone off-net. That is Virgin Media. It has never gone off-net but recently Virgin announced it was going on to SIRO's network. That is the first time it is going on to a wholesale open-access network. We are engaging with Virgin Media about coming on to the national broadband network as well.

Chairman

Mr. Hendrick would hope that once it has gone up with one network, it will be comfortable coming on board with NBI.

Mr. Peter Hendrick

That is correct. Part of that is integrating from a software and network perspective into the network and then developing a product and service around that as well.

Chairman

Finally, where are we with Limerick?

Senator Jerry Buttimer

Where is that now?

Senator Gerry Horkan

The Chairman could not leave it out, could he?

Deputy Ruairí Ó Murchú

Could he put up a map, please?

Senator Gerry Horkan

Twenty minutes later, we finally get to Limerick.

Deputy Ruairí Ó Murchú

There are a couple of those gap intervention areas the Chairman would like to point out.

Senator Gerry Horkan

I need to be in the Seanad at 2.30 p.m.

Chairman

Mr. Hendrick can come back to Limerick. We will let Senator Horkan speak.

Senator Gerry Horkan

It gives the Chairman another chance to come back in on Limerick later. I thank him very much. I apologise; I had to vote in the Seanad. I would have been here otherwise. I thank NBI for its opening statement. The heat in terms of the engagement we have had has calmed down a bit because we now understand much more of NBI's problems from the trips we have had and the investigations and so on. To clarify for my own benefit, the stages the witnesses talked about are survey, detailed design, build works started, build works finished and premises passed. Is that it? Have I left out any other stages?

Mr. T.J. Malone

Just connections.

Senator Gerry Horkan

Connection is when people sign on the dotted line and commit to paying NBI or the retail operator that ultimately funds NBI.

Mr. T.J. Malone

Yes.

Senator Gerry Horkan

NBI is at 60% surveyed and at nearly the same in terms of detailed design. In terms of build works started and finished, it is referenced that 180,000 of NBI's build works have either commenced or been completed. The difference between commenced and completed is obviously quite significant. I know it is an average but how long does it take to go from build work started to build work completed?

Mr. T.J. Malone

Basically, the start of it is the Eir make-ready work once we get on the ground. We give the file and design to Eir to start the build work at that stage. It can take probably six months for Eir to get that make-ready work finished. We will start some of our own work in parallel to that.

Senator Gerry Horkan

Is that what is called build work started to build work completed?

Mr. T.J. Malone

Yes, that is build work started. It is once we put boots on the ground, as such. Once we actually put the construction teams into the area to start, that is build started.

Senator Gerry Horkan

Okay. And it takes six months to go to build work completed.

Mr. T.J. Malone

It takes six months for Eir to complete its piece and then, after that, it could take up to nine months depending on the size of the deployment area and the difficulties we encounter. It can take anywhere up to nine months for-----

Senator Gerry Horkan

Additionally.

Mr. T.J. Malone

Yes.

Senator Gerry Horkan

So, we are talking 15 months between building starting-----

Mr. T.J. Malone

Maximum. Some areas will get done in less than 12 months. For instance, Midleton has 9,000 premises whereas the average deployment area is probably 2,500, meaning that Midleton is almost the size of four deployment areas. It depends on the size of the area. Emyvale has 1,500 premises and 88% of the work involved there is overhead, so its area should be done much more quickly.

Senator Gerry Horkan

Regarding the figure of 182,000 premises on which work has commenced or been completed, is there a breakdown between how many have been commenced and how many have been completed?

Mr. T.J. Malone

We have completed 74,350 off site where the contract-----

Senator Gerry Horkan

That is within the 182,000.

Mr. T.J. Malone

Yes.

Senator Gerry Horkan

Then it is fair to say that there are approximately 108,000-----

Mr. T.J. Malone

Under construction.

Senator Gerry Horkan

-----still on the 15-month journey from start to finish.

Mr. T.J. Malone

Correct. We will be at 220,000 by the end of the year, meaning that approximately 40% of the entire intervention area will either have been built or will have commenced that journey.

Senator Gerry Horkan

Regarding the revised targets, which Mr. Hendrick told us we are all aware of, what was the revision?

Mr. T.J. Malone

When the Senator says "revised targets"-----

Senator Gerry Horkan

The witnesses' submission states, " As committee members know, we have agreed revised targets with the Department of Environment, Climate and Communications and we are committed to delivering". The targets have been revised from what to what?

Mr. T.J. Malone

The revised target is 102,000 premises by the end of the year.

Senator Gerry Horkan

What was it?

Mr. T.J. Malone

The original target was 205,000.

Senator Gerry Horkan

It is a 50% reduction in the ambition, as it were.

Mr. T.J. Malone

Exactly.

Senator Gerry Horkan

We all understand that Covid had an impact and there were many other reasons.

Mr. T.J. Malone

That is where we are.

Senator Gerry Horkan

What will the 300 extra staff do for the programme plan? It is a 25% increase in capacity, but what will they do particularly? Will they be at build stage or design stage?

Mr. T.J. Malone

Design and survey are pretty much up to where we are. In fact, we are probably far enough ahead in that context that we-----

Senator Gerry Horkan

The extra 300 staff will be on the build side.

Mr. T.J. Malone

Some 98% are on the build side. I will put that in perspective. When we were last before the committee, we were constructing approximately 600 km of fibre per month. As of this month and for the remainder of this year, we are targeting 1,000 km of fibre. For the layman, that is building fibre from Cork to Dublin city every week. It is-----

Senator Gerry Horkan

Significant.

Mr. T.J. Malone

Yes. It is 1,000 km per month.

Senator Gerry Horkan

That is an average but, by definition, every house in the intervention area is there because it was deemed to be commercially unviable at a certain point in time. Am I correct in saying that companies have gone into parts of the intervention area subsequently and stated that they were commercial? Some commercial operators have gone into areas that were originally deemed not to be commercial and done their own thing. Has that happened?

Mr. Peter Hendrick

In some areas, probably surrounding urban areas, operators have gone in-----

Senator Gerry Horkan

Into what was originally deemed the intervention area.

Mr. Peter Hendrick

Correct. The risk is whether those premises will get connected or not. We have not removed premises from the intervention area yet, primarily because we are building the fibre out anyway. If we have commenced, done the surveys and design and the build is already going out to serviced homes and a commercial operator then builds and picks up a home on that route, we will still be going past that premises anyway to serve the homes beyond.

Senator Gerry Horkan

The commercial operator could be offering a service, but NBI could be offering a better service at a better price or whatever the case may be.

Mr. Peter Hendrick

Under the broadband programme plan, that is correct. At the end of 2019, the Department held a consultation with the industry to understand what its plans were during the deployment period of the national broadband plan. The Department wanted to ensure that, if premises were going to be serviced, we would not have to build infrastructure. At the time, the operators laid out their plans, which is ultimately from where the national broadband plan came.

Senator Gerry Horkan

Is there any suggestion that the intervention area should be revised?

Mr. Peter Hendrick

There is the ability for it to be revised by us or the Department.

Senator Gerry Horkan

It would not be in NBI's interests to do that, but it might be in the interests of the State in terms of paying for areas that do not need to be paid for.

Mr. Peter Hendrick

Yes, in certain circumstances. For example, there might be a specific housing estate that we would not go through. We have gone to the Department and told it that it does not make sense to go through an area because infrastructure has already been deployed there. It was the equivalent of a large housing estate. It was actually student accommodation.

Senator Gerry Horkan

Clearly, there are areas just outside the commercial area and others that are at the top of mountains or bottom of valleys, are inaccessible and where there are few houses but to which NBI will eventually deliver. I am not using the word "eventually" in a bad way. It is just that NBI cannot be everywhere at the one time. Is there a rough cost per premises? I am sure the range is large, but what is the average cost per premises?

Mr. Peter Hendrick

I will revert to the committee with the cost. I know that we have provided that number previously.

Senator Gerry Horkan

Not just the average, but also the maximum cost. Many premises will probably be below the average, but a few will be very expensive.

Mr. Peter Hendrick

We go by an average. In every deployment area, there are premises that are close and others that are very far away. Once the low-level design and the detailed design are done, we make a cost model per premises. It must reflect whether it is per the original cost model, whether there are expensive premises that are very difficult to reach and whether we should consider alternative solutions for those. We do this in each of the 227 deployment areas. So far, all of the costs are coming in where we expected them to be, or just below.

Senator Gerry Horkan

Based on NBI's pitch to the State about what it could do the work for.

Mr. Peter Hendrick

Correct. We spent a great deal of time examining what we call exemplar networks. We surveyed and designed to get some sense of what the costs would be. Currently, the costs are coming in where we would want them to be.

Senator Gerry Horkan

I might contribute again. I wish the witnesses the best. It is important that this work happen. It is no different than running water or electricity. NBI should keep going as fast, thoroughly and efficiently as it can in delivering broadband to all of the 227 deployment areas. Is it fair to say that the witnesses are more confident now about how the programme is going than they were at our previous meeting or the meeting before that? NBI has more staff, less Covid and a greater ability to deliver. We as a committee are on a learning curve, but so is everyone where the pitfalls that NBI is finding are concerned. Is it fair to say that NBI is finding fewer new pitfalls as it goes on?

Mr. Peter Hendrick

Mr. Malone and I are much more confident today. NBI is out of the mobilisation stage. We are not seeing the same impact from Covid's Omicron variant that we saw at the beginning of the year. We are active across all 26 counties, we are engaged with all local authorities and infrastructure providers and we are delivering on the numbers.

Senator Gerry Horkan

Is there anything else that NBI needs this committee to do at this point to aid it?

Mr. Peter Hendrick

The committee has been helpful. Having it out in the field to look at and understand the deployment has been important.

Senator Gerry Horkan

It was good to be there.

Mr. Peter Hendrick

We will continue to engage with the committee and provide it with updates. There will be updates in September. In terms of premises passed and premises connected, the numbers have doubled since we gave the last update in March. We are clear on where we want to be ahead of the targets that we have agreed with the Department. It is a question of building on this momentum and accelerating the programme.

Senator Gerry Horkan

That was exactly ten minutes. I thank Mr. Hendrick and Mr. Malone.

Senator Jerry Buttimer

I apologise for being late and missing some of the start of the meeting. I welcome Mr. Hendrick and Mr. Malone.

There will be three parts to my questioning. The slippage rate in the roll-out is a concern. Some 22% of homes have had connections built. I would like to hear more about NBI's commitment to get involved in deployments out in the field in Cork but also more generally. Our visits to the deployment areas were successful and gave us a great insight into what was required. In terms of selling what NBI is doing, though, the witnesses are being a little remiss in explaining to people the difficulties that NBI is encountering every day. I have seen its staff working in various areas and I compliment them on the work they are doing. From the committee's perspective, this programme is probably the 2022 version of rural electrification. It is a significant generational opportunity and challenge, and we have to get it right. People are crying out for broadband.

My first question is on NBI's plans to address the slippage rate.

I apologise for missing part of the presentation. I was in the Seanad.

Mr. T.J. Malone

No problem. Our first and major plan is to get back on track with the seven years. We have said all along here that we see a pathway back to the contracted seven years. We are making good progress at the moment. We are doing between 7,000 and 10,000 homes per month. We are making significant progress. I think the last time we were before the committee, we said the survey was the first to catch up, then the design and then the build. We are now starting to see that come into play. We are starting to see the progress. As I said, we have gone from 650 km per month to 1,000 km per month in the roll-out of fibre, so we are starting to see the momentum and, as Mr. Hendrick said, the business as usual starting to pull into that, as it were.

To go faster and de-risk the project, more than anything, the self-install product is something we need to get into the market and as soon as possible. That would be our key to going forward with this.

Senator Jerry Buttimer

Okay. Again, apologies if I missed this earlier but where is the NBI on the recruitment of additional subcontractors?

Mr. T.J. Malone

The existing subcontractors have increased their workforce. Those are the existing guys we have there. They can only bring on workers or we can only increase the workforce when we have the actual work for them, so it has been about building that momentum and getting the work there. They have increased their workforce. We have increased our overall workforce by 25% this year. The existing contracts are a part of that and we have brought another principal contractor onto the pitch called Gaeltec, which is based out of Kilkenny. On top of that we are in a procurement process to add another three contractors to the pitch. That will bring them into the framework, and as and when we have enough work to bring them in or, indeed, if we have any issues with any of the existing contractors, we will step them onto the pitch.

We will be bringing in three additional contractors. We talk about resources and tightness of resources, which have been a problem across a number of industries, but I have never seen as much interest in contractors looking to come into the programme with us than at the moment. It is key for us to have them there and be ready so that when the self-install product comes, we have-----

Senator Jerry Buttimer

From a layperson's perspective, what is the import of the self-install product for the homeowner or business person?

Mr. T.J. Malone

It is a good point because we talk about self-install and people do not really realise or understand what that might be. The Senator has been out in the field with us. When we do our surveys and look at what areas of Eir's existing infrastructure we want to use, we do up all our designs based on that. Usually, there is a 4 inch pipe already in the ground. We then ask Eir for what we call Eir make-ready. That is basically putting a smaller sub-duct within that 4 inch duct that allows us to bring our cables through it and connect them up. At the moment we are not allowed put in that smaller sub-duct. Eir must do it on our behalf. It has a capacity level it is prepared to commit to annually, which is 2,500 km per year, but we want to be able to increase that capacity, because the more cable we can get in the ground and the quicker we get it in, the more homes that will be done and the quicker the NBP is rolled out. By getting access to a product where we are allowed self-install and put some of that in as well, it will increase the capacity above and beyond that 2,500 km, which then obviously increases the number of homes.

Chairman

At what rate will the NBI increase it?

Mr. T.J. Malone

It is open-ended at that stage. We can go as fast as our designs will let us go and our people will let us go.

Chairman

Is that 2,500 km per year?

Mr. T.J. Malone

That is per year, yes. In fairness to Eir, that has been increased from its original commitment of 1,500 km at the outset.

Chairman

What is that in terms of homes passed on average? What would that restrict the NBI to?

Mr. Peter Hendrick

Ultimately, we believe it is about just over 20,000 km of underground network across the entire intervention area, the entire country. It is about trying to build the capacity to do that faster.

Chairman

That is about eight or nine years.

Mr. Peter Hendrick

Yes. Maybe it is just under 20,000 km, but on average you would say 20,000. That might include connections as well, so in totality we say 20,000 when we include connections into the mix.

Senator Jerry Buttimer

The difficultly the company has is everybody wants it now, as our guests know. They want to be connected now.

Mr. T.J. Malone

Yes. Everybody does want it now, but as the Senator quite rightly said-----

Senator Jerry Buttimer

I want to finish my contribution. I apologise again for being late and I must go to another meeting now. I say genuinely as a politician that we get representation requests around intervention areas and where we are at with broadband. I thank Adam Ledwith and Damien Dineen of the NBI, with whom I have engaged. I wish other organisations would be as welcoming to our representations. We might not get the answers we would like but they are available, accessible and come back to us in a prompt and timely way, and I thank them for that.

Our guests need to start lighting a fire under themselves in terms of selling their message. The Road Safety Authority does a great job with its advertising campaigns. The NBI needs to tell local authority members and inform the public through social media and public advertising about the work it is doing and the challenges it is undertaking and that must overcome. Part of what we do in the committee is important but this is a huge project for our country. We put out ads for the national development plan, NDP, and for Covid. I ask that the NBI do the same. It may already but it is important we move away from older methods. The day we met our guests, they had a very lovely glossy booklet, which was great. However, people are on the iPhone, the radio and television now. the NBI needs to sell that message. This is a transformative project that is going to take time. I am aware the NBI is behind and we need to bring people back in again on the totality of the picture, but I am positively enthused, notwithstanding the challenges. Maybe I am naive and in my own world-----

Chairman

The Senator could never be accused of being naive.

Senator Jerry Buttimer

I just think this is a great story we need to get behind and that we all need to move to the final point. I thank our guests for being here and I apologise once again for being late.

Mr. T.J. Malone

I thank the Senator very much.

Chairman

We move to Deputy Ó Murchú.

Senator Jerry Buttimer

I apologise to Deputy Ó Murchú, but could I just get a piece about Cork off air rather than delay the meeting? If I could, it would be helpful. I apologise to the Deputy.

Mr. T.J. Malone

Sure. As the Senator is aware, Cork has by far the biggest number of premises within the intervention area by a factor of probably 2, above any other county.

Senator Jerry Buttimer

I ask Mr. Malone to give me a briefing very quickly rather than delay the meeting.

Mr. T.J. Malone

Sure. There are 78,724 premises in the intervention area. At the moment we have almost 9,000 premises passed in that area, with 13,000 built, so we are building very fast in there at the moment. They will come past in the next few weeks. By the end of the year we will have just over 15,500 premises out of that 70,000 that will be built.

Senator Jerry Buttimer

Okay. I thank Mr. Malone. I thank Deputy Ó Murchú.

Chairman

Deputy Ó Murchú has graciously allowed his colleague Deputy O'Rourke to go ahead.

Deputy Darren O'Rourke

I thank the Cathaoirleach and Deputy Ó Murchú. Could I get the figures for County Meath? I am aware we have figures from previously but it is just for the progress there.

Mr. T.J. Malone

That is no problem. There are just over 50,000 premises in Meath at the moment. As the Deputy is aware from our last interactions at these meetings, we got a slow start in Meath. I am happy to say we are working very well with the Meath local authority at the moment, so that is progressing and progressing well. By the end of this year or within the first week or two of January we will have 2,780 premises built within that area. We were a little bit slower to get there but we are starting to make good progress now in Meath. The first few areas are coming out of the Skerries deployment area and then we have a lot coming out of the Drogheda deployment area. The next big one, which is next year, will come in the Dunboyne-Clonee area. That will start to deliver a number of premises next year.

Deputy Darren O'Rourke

On the pipeline, the NBI aims to have 2,780 built at the end of the year. Does it have any sense of what 2023 might look like?

Mr. T.J. Malone

Yes. I will take it the whole way through, from survey, design and into build. On the survey, by the end of 2023 we will have all the surveys completed there. By the end of this year we will have about 80% of the surveys in Meath completed. By next year we will have 100% completed. For builds commenced, by the end of 2023, 86% of the premises in Meath will have started or gone into the commencement of build.

Once we get a slow start, we look to catch up fairly quickly. By the end of 2024, all of the premises in the intervention area will have commenced the build in Meath. From a builds completed point of view, next year we plan to do in the region of 14,000 premises on top of the existing 3,000 premises we spoke of. That will be 14,000 next year, and in the following year it will be another 17,000. It breaks back down into 7,000, and 6,000 for the remaining two years after that.

Deputy Darren O'Rourke

I thank Mr. Malone.

Deputy Ruairí Ó Murchú

I welcome Mr. Hendrick, Mr. Malone and the rest of the team. It does look like we are in a slightly better place than before, which is welcome. I reiterate the point made by everyone that everybody wants to get this service tomorrow. Obviously, it can make a significant difference in people's lives, which was shown throughout the pandemic.

We are looking at a figure of 102,000 by the end of January for premises passed but it is likely this will be surpassed. Mr. Malone is not willing to put a figure on that.

Chairman

I tried.

Deputy Ruairí Ó Murchú

In fairness, the Chairman tried.

Chairman

I encouraged.

Deputy Ruairí Ó Murchú

The difficulty is we had a figure of 60,000 premises passed for the end of January and the end of March, but for multiple reasons we did not reach it. It is vital we stay ahead of this. I am going to bring this back to where the conversation started initially. For all of us it was probably from the point of view of acceleration. I just want it on the record again that originally we had thought we could possibly turn this seven-year project into five years. In real terms, is it seven years into six years?

Mr. T.J. Malone

The best we could possibly do would be six years. I reiterate that this is only in the event of us getting a self-install product in a timely fashion.

Deputy Ruairí Ó Murchú

The self-install product was going to be my next question. In fairness, clarification has been given a number of times that it is not actually a product. It is just the ability for the NBI to put in the ducting. It is either that or it is the piece of work Eir does itself to make it ready to increase capacity. There is no promise from Eir with regard to increasing that. If this is the case, the only show in town is the self-install product. We are aware there are court proceedings. Will Mr. Malone give us a timeline by which the NBI would need this to be able to deliver at least a one-year reduction in the national broadband plan roll-out?

Mr. T.J. Malone

I will not give the committee an exact date because obviously we would have to-----

Deputy Ruairí Ó Murchú

Roughly.

Mr. T.J. Malone

The sooner the better. The court case is due to be heard within the next two weeks. I believe it is 5 July, all things going well. Following that, we would hope we would at least get a direction of travel as to where that comes. I believe the court case is slated for two or three days. It is to be hoped we will get a direction of travel and at that time we may be able to engage with Eir to see where we go after that. Eir has said it does not want to engage until after it has that direction of travel.

Deputy Ruairí Ó Murchú

I imagine the reason for the court case is that Eir does not really want to deliver this to the NBI.

Mr. T.J. Malone

Not necessarily. We are not part of the existing proceedings that are there. It is nothing to do with us and it is a separate but related area.

Deputy Ruairí Ó Murchú

I accept that it is not specifically about National Broadband Ireland, but from Eir's point of view it is about the integrity of its infrastructure, so it maintains control of it and nobody else has a means of doing what the NBI is looking to do. Is that not the whole idea of it?

Mr. T.J. Malone

That is part of it. We do use the same contractors Eir uses to do the work for it.

Deputy Ruairí Ó Murchú

We need that done as soon as possible. There has to be a big emphasis in particular on the Minister and the Department to play whatever part they can to ensure, following the court proceedings, which we hope are positive in the context of facilitating this move, we can actually deliver upon an acceleration.

The figure we get fixated on is premises passed, which is 63,652 according to this document in front of us. The NBI is also talking about 74,000 "built", as it is referred to. Will Mr. Malone go into the specifics of "built"? I assume the actual difference in that is the verification process. Is this the Department and ensuring the NBI gets payment?

Mr. T.J. Malone

There is a difference between premises passed and premises built. Consider the 73,350 that are built at the moment. When I talk about built, I am referring to the period when the contractors who are building a network walk off site, we have a fully functional live network that is ready to go from the NBI's perspective, and there is no more work that needs to be carried out on the ground. They come back within a week or two of that and give me a fully updated map telling me all that has been built. We are on top of that daily with them. They give us a fully functional map. When that comes in, we must then do some verification ourselves to make sure it corresponds with everything we have. We then need to load it onto our inventory management system. This is a fancy name for an IT system that interacts between all of the 56 different service providers which Mr. Hendrick spoke of earlier. We need to load the information into that so that each one of those 56 service providers has access at the same time and there is no discrimination. They will all have access to those. We then must give two weeks' notice to the industry.

Mr. Peter Hendrick

The 56 retail operators are given two weeks' notice so they can then go out and sell.

Mr. T.J. Malone

Yes, so they can sell at the same time. It is just a process. For us, the risk has gone out of it, everything is done, it is built and we walk off site. It can take between six to eight weeks for that to go from built to passed.

Mr. Peter Hendrick

To put the 63,000 into perspective, as of tomorrow we will also be notifying industry of another nearly 4,000 premises, so then it will be 67,000. The retailers will know that those houses will be live in two weeks' time. They can place orders and they go into the provisioning cycle. Pretty quickly, the 74,000 Mr. Malone has spoken of will go through that same process. Every two weeks we release premises. Every two weeks we have a new drop of premises going from built to passed.

Deputy Ruairí Ó Murchú

Those extra 10,000 get factored into that over the next month or so.

Mr. Peter Hendrick

"Passed" only happens two weeks after we notify the retailers but the retailers are out selling and telling the customers they can actually define when their connection is going to be within that two week window.

Deputy Ruairí Ó Murchú

That is grand and it is worth knowing. It is probably worth maintaining this in the NBI figures from now on from the point of view of the significant amount of the work actually done at that stage. Are we getting to the end of areas that are not in the intervention area being able to move into the intervention area?

Mr. Peter Hendrick

At the moment, the total premises count is 560,000. This is a mixture of premises where the commercial operators said they could deliver 30 Mbps and they cannot. They have been added in. We have also had natural growth with new homes being built or derelict premises being renovated. Right now the figure is approaching 559,000.

Deputy Ruairí Ó Murchú

The Department had said that the time was coming to an end. Is that correct?

Mr. Peter Hendrick

It is becoming clearer that the commercial operators, SIRO or Eir, have actually given their own commitments for what they intend to roll out in fibre to the home. The Department has much greater visibility of what the plan is between now and the end of 2026 for true high-speed broadband.

Deputy Ruairí Ó Murchú

To move those areas would be seen as having a detrimental impact on their business.

Mr. Peter Hendrick

They would only move if there were no commitment. They would only move if there were no plan.

Deputy Ruairí Ó Murchú

I hope the Department would maintain communication with them to ensure the commitment is maintained so people do not get left out.

We had previously spoken about these areas and it was specific to Eir. I am aware the NBI disputed the figure of 40,000 premises where there was crossover of Eir and the NBI doing the same piece of work. We spoke earlier about this and the NBI mentioned we are not talking about these types of figures.

Mr. Peter Hendrick

There are 31,000 premises where Eir has said it is going to roll out or has rolled out. When a consumer places an order, there is a challenge around whether it can be connected or if it is going to be too expensive to connect. The difference with us rolling out the national broadband plan is that we are required to connect every single home. We do not have the ability to say it is too expensive to connect that home and therefore we are dropping it out, as it were.

It is really important that with any premises that the commercial operator has said it passed, that they connect to it. If they do so then that is great; they do not need the national broadband plan or they do not place an order with us.

Deputy Ruairí Ó Murchú

I get it. Even if NBI believes that if someone else is catering for an area, it still has to build or do something else. I think the media was coming at it from the perspective that NBI could have ended up getting payment for places that it was not going to build but that will not be the case, will it?

Mr. Peter Hendrick

The contract has a definition of encroachment. That is not something we have looked to claim upon, no.

Deputy Ruairí Ó Murchú

There was considerable comment on the financial breakdown of NBI and the money behind it. Mr. Hendrick was here before and told us it was looking for new investors. What stage has that reached? Not that many of us have looked at many companies and their investors but it did strike me that they did not appear to be the kinds of companies that were in for the long haul or, in the case of some of them, to have a specific interest in telecommunications. Where are we on that?

Mr. Peter Hendrick

The background is that Granahan McCourt Dublin is our shareholder. It has investors which have invested into the project through Granahan McCourt Dublin. Those investors are a mixture between telecoms expertise and individuals, such as David McCourt and Walter Scott and his family trust which have deep telecoms experience, as well as partners of theirs which have a higher risk appetite in terms of construction risk and take-up risk. We are sitting here talking about 56 retail operators. Three years ago it was not clear that we would get 56 retail operators. That is great for consumers because it means that there is competition and different services in products and price. The stage we are at today is that there is an opportunity to look to bring in like-minded long-term partners that are equally infrastructure partners who have fibre assets. Typically those infrastructure partners come in at a stage when there is not the same risk profile around construction or take up. There is clear predictability and stability in the programme.

Deputy Ruairí Ó Murchú

So NBI is in conversations or negotiations at this time. Maybe Mr. Hendrick cannot go into too much detail.

Mr. Peter Hendrick

At shareholder level there is discussion ongoing. I cannot go into too much detail but it ultimately shows confidence in the project, where we are at and our ability to deliver in respect of where the take-up is going.

Chairman

Mr. Hendrick flagged that the last time.

Mr. Peter Hendrick

I did.

Chairman

Have discussions moved on since then? Has there been a change in the shareholding or funding model of NBI now?

Mr. Peter Hendrick

All of the commitments in the contract still stand. We are talking about potentially new investors stepping into those commitments.

Chairman

Has that happened?

Mr. Peter Hendrick

It has not happened yet, no. It is ongoing. A number of parties are still left in the process and it is likely to happen between the third and fourth quarters of this year.

Chairman

What percentage of the funding commitments will they replace?

Mr. Peter Hendrick

I cannot give a specific number at this point because those discussions are ongoing with different parties about their desire in terms of equity.

Chairman

Will there be significant movement in the commitments from the existing financiers to this new group?

Mr. Peter Hendrick

David McCourt and Walter Scott's family trust, Tetrad, are not exiting shareholders. They are staying in. The equity of Twin Point and Oak Hill, which are more a mixture of private equity telecoms investments, is potentially up for transfer.

Chairman

Was their equity in the form of long-term debt commitments or shareholding?

Mr. Peter Hendrick

No, we talked about this previously about loan and equity. They are seen as both the same. It is not debt with any sort of protection or guarantees.

Chairman

But it is debt.

Mr. Peter Hendrick

It is loan notes and equity. Effectively, what would end up happening is the investment that they have made in, to date €120 million by all 100% shareholders, would be transferred and the new investors would step into their obligations under the terms of the contract.

Deputy Ruairí Ó Murchú

How would that impact on the taxpayer? Is there a pay-off? Does it cost more? How would it outwork itself? Is it too early to tell?

Mr. Peter Hendrick

There is no impact from a State perspective or the Minister. The obligations and the flow-down of the contracts all stand regardless of who the investors are in Granahan McCourt Dublin. If there is an outperformance on the returns there are clawback mechanisms in the contract where the Minister would have a gain share in those outperformances.

Deputy Ruairí Ó Murchú

How does that work?

Mr. Peter Hendrick

Above a certain percentage of return to the shareholders, the Minister would get a return, were that to be the case.

Deputy Ruairí Ó Murchú

That would be preferable from the Minister and everyone else's perspective.

When we discussed this previously Mr. Hendrick spoke about how, as some of the work such as design was finished, that some of those staff would become available. I will paraphrase Mr. Hendrick so I hope he forgives me if I go beyond what he said. He spoke of becoming almost a European super-company in the telecommunications or broadband sphere. Have there been any moves around that and internationalising the operation?

Mr. Peter Hendrick

At a shareholder level, Granahan McCourt would see Ireland as leading across Europe, rolling out fibre broadband. We will get there ahead of the 2030 European objective of everyone having access to gigabit broadband. As such, we are probably one of the most successful wholesale open access providers in Europe from a fibre to the home perspective. There are very few who could point to 56 retail operators selling on the network, the non-discrimination and future-proofing of that network, the way we have taken designs and the way we automate the ingestion of those designs and how we ensure that the customer experience and the connectivity happens on time is not something that is readily available across Europe. Granahan McCourt would see that there is a real opportunity of putting Ireland at the centre of what is happening at a European level after the national broadband plan, NBP. This will not affect what we are doing on the NBP.

Deputy Ruairí Ó Murchú

It is post-NBP. There has not been change.

Mr. Peter Hendrick

There has not been. Equally, the partners that David McCourt and Granahan McCourt are looking at are partners who have lots of experience in owning and operating fibre networks across Europe. There is some value in seeing what are the future product sets and innovation that can be done and be of benefit in our programme here and equally that Ireland can become a centre of excellence for the overall objective at a European level.

Deputy Ruairí Ó Murchú

Previously, Mr. Hendrick said that if there was to be acceleration, that capacity would be needed at local authority level particularly around road engineering and planning. Have all the difficulties regarding planning been dealt with?

Mr. T.J. Malone

From that perspective, local authorities generally are working very well with us across the board. It is nearly every local authority at this stage. On a monthly basis, I cycle around to most local authorities. When I say monthly, it is probably every quarter that I get to each local authority. I meet its CEO and the full management team and I give them an update of what is happening over the next quarter and the quarter after that. The engagement with them is really good and the CEOs and their senior teams make themselves available for all those meetings. It is going well from that perspective now.

Senator Timmy Dooley

I thank our guests for their presentation. I am sorry that I had to leave for a vote so I missed some of the meeting. We might pick back through and help me to understand some things.

Following on from the conversation about the switching out of certain shareholders, is that just a replacement of shareholders that were there at the start? Is that the purpose? Is it just that there are shareholders who are exercising an exit strategy that was already expected?

Mr. Peter Hendrick

The project and the contract, from a shareholders agreement and project agreement, always allowed for shareholder change. The confidence, stability and predictability of the programme and the take-up level and risks are all very stable at this point.

Granahan McCourt was getting much interest from infrastructure funds that were rolling out fibre networks across Europe. They indicated that it was at a similar point to their investment in other markets. That is where the process started.

Senator Timmy Dooley

It is not to provide any additional capital or access to funding. It is merely a shareholder sale; a swap-out.

Mr. Peter Hendrick

It is effectively a case of new investors stepping into the exact same obligations that existing shareholders have.

Senator Timmy Dooley

That others have had. Maybe Mr. Hendrick cannot share this for commercial reasons but shareholders now exiting are effectively engaged in a grey market share sale, for want of a better term. Are they gaining?

Mr. Peter Hendrick

They would certainly expect to get a return on their investment.

Senator Timmy Dooley

They would not have received any dividends to date.

Mr. Peter Hendrick

There have been no dividends.

Senator Timmy Dooley

It includes those who were passive shareholders.

Mr. Peter Hendrick

Correct.

Senator Timmy Dooley

They have offered their shares for sale. Does National Broadband Ireland have to get involved in that a lot?

Mr. Peter Hendrick

The management team is very focused on the roll-out and operations of the network. This is very much at a shareholder level.

Senator Timmy Dooley

There is clearly confidence if others wish to come into play now. It is not those with the greatest risk portfolio that are coming in now; they were there at the beginning. They hope to see a return from it. One would expect that they do anyway. It is either that or they are giving up and walking away, which they are clearly not if somebody else is prepared to invest. Is it fair to assume that they are getting a return over and above what they invested?

Mr. Peter Hendrick

It is fair to say they are getting a return. As to what that number is-----

Senator Timmy Dooley

I do not expect a number. They are not making a loss.

Mr. Peter Hendrick

They are certainly not making a loss.

Senator Timmy Dooley

That at least indicates there is a group of shareholders who have confidence in what has happened to date. That is positive news.

Mr. Peter Hendrick

Correct. I think it is very positive. The partners who are engaged in the process bring a wealth of knowledge and experience. It is positive.

Senator Timmy Dooley

There is an additional benefit to their presence.

Mr. Peter Hendrick

Absolutely.

Senator Timmy Dooley

That is helpful. I know there was discussion about the timeline. It was originally five years. I thought it was always seven in truth. Covid then interfered with that. Mr. Hendrick identified a couple of things that the company has done. It has taken on additional staff and contractors. It is looking for a decision on the self-build. Is that the greatest extent to which it can go to help to meet the timeline, taking into account what happened with Covid?

Mr. Peter Hendrick

I will let Mr. Malone give more detail. Originally, when we talked about five years, we contracted Eir to increase the number of poles it replaced per annum and the number of kilometres of duct it repaired. As Mr. Malone talked about-----

Senator Timmy Dooley

Are poles and ducts the biggest inhibitor?

Mr. Peter Hendrick

There is a make-ready project relating to the infrastructure. If the ducts are clear and the poles are ready to hang cables, the installation of the cable is not the most challenging part. Making sure that the routes to install the cable are clear is the challenging part. We are predominantly using existing infrastructure, so preparing that infrastructure is the biggest issue.

Senator Timmy Dooley

I hate getting into granular detail because I am sure NBI has figured this all out internally. I see plenty of areas where there seems to be no issue with poles or where ducts have already been prepared. One can see the new white piping come through. Someone has already completed the make-ready part, yet one does not see-----

Mr. Peter Hendrick

That is predominantly Eir. Depending on the size of the deployment area, Eir will spend an average of six months on the make-ready, installing that sub-duct. We then blow fibre down that sub-duct. When the Senator sees that white subduct, it means the make-ready is coming.

Senator Timmy Dooley

Is the assumption that NBI will be coming through fairly quickly?

Mr. Peter Hendrick

If you think about it, there is a centre point and then we go about 20 km out from it. We call that a ribbon. In every deployment area, we have four or five ribbons. We cannot start our main contract work, of installing the cable, until that ribbon is handed back to us by Eir. When it is handed back, it is not just a case of Eir being finished, but it has to send back designs to say what it looks like. We hand those designs to our main contractor so it can build the cable. Eir has increased the capacity of the number of poles it replaces and the number of ducts it repairs. That happened when we wanted to have a five-year programme. The initial phase of Covid, which one could call phase one, then additional spikes and the Omicron variant, all had a further impact. We can see how we could get back to seven years with the capacity Eir has given us. To overachieve that, we believe that self-installation where multiple contractors can repair and work on the subduct themselves, will drive this.

Senator Timmy Dooley

When I see those white ducts, Eir has been contracted to do that. It hands that to NBI, which then blows the fibre through that. In terms of the self-build, is NBI seeking to install the initial subduct?

Mr. T.J. Malone

That is exactly it. When one sees those white coils, that is predominantly a case of Eir having produced that for us to make it ready. There are some parts where we have to build a new network ourselves and the white coils could be something that we have built. That is exactly what we are looking to do. We are looking to supplement what Eir is currently doing. If it is delivering 2,500 km of the subduct, as the Senator just saw, we are looking to add to and do some of that ourselves. That can increase the capacity.

Senator Timmy Dooley

It is along the main line. It is not the ducting into the house per se.

Mr. T.J. Malone

The ducting into the house is separate. We do that too.

Senator Timmy Dooley

NBI can do that as it stands.

Mr. T.J. Malone

We are doing that as a norm at present; that is happening.

Senator Timmy Dooley

There is an intermittent phase between where one company finishes work and another begins. I made a lot of noise when it became clear that NBI was going to run a parallel network alongside the existing one. Has NBI looked again at dovetailing onto the end of a line? People in this room know a lot about what Eir did when it passed 300,000 premises, then truncated it and left a black box, with another ten houses up the road. I assume Eir assumed that, when it won the contract, which it did not since it did not even go for it, it would just attach a length of fibre to continue from there. Those of us who do not have specific training that NBI has assumed that NBI would just dovetail at the end of that line. It has not chosen to do that. Has NBI given further thought to that? Would it speed work up?

Mr. Peter Hendrick

We did not. The reason for not doing that was largely that the intervention area is not clean. It is not a case of every home outside Dublin or an urban area being in the intervention area. There are premises throughout the country involved. Urban areas, such as some near here, including places in Clontarf, Dollymount, the airport or Dublin Port are in the intervention area. They are extreme cases. Even if we were to plug in, we still have to go back in to connect homes. Coming out from areas where we have existing backhaul fibre, we are still passing premises in the intervention area. That was a critical part of our assessment. Beyond that, we looked at operational integration issues, including the matter of operating this network over 25 years. It is a passive cable down which we send light. We have to keep records of the length of the cable and of any breaks or resplicing. We have to know that the light and connection on that cable will work over 25 years. Future-proofing is a concern. There are great operational challenges involved in interfacing with two passive networks as an access network. Finally, there is the cost of renting that infrastructure compared with the cost of building one's own infrastructure and there was a significant delta in that. We did not just say that we wanted to build our own network. There were three sides to the evaluation.

There might be some value in looking at adjacent infill. We engaged with Eir about that. It is not a product that it made available. We are looking at that, with the regulator, to see if there is value and the quantum of premises whereby it would made sense for Eir to offer as a passive product. We would not be plugging into all its fibre network, it would only happen in specific scenarios where we see the merit of it.

Chairman

Mr. Hendrick does not see merit in that in the rural areas.

Mr. Peter Hendrick

It goes back to the point-----

Chairman

It is very simple for us to say there is an Eir fibre network in a rural area for someone's neighbour over the ditch and ask why not come to some agreement with Eir to just plug into that fibre cable and go up to the other house along that route.

Mr. Peter Hendrick

We are never going to find a one-size-fits-all solution. There is a challenge even in trying to sort out the outliers, the 1% or 2% of premises. There is a balance between the cost of doing it and the risk of not future-proofing that network. The urban infill is very straightforward. The adjacent is more challenging. Bringing deployment areas forward where we buy back----

Chairman

The urban infill will link into the Eir network.

Mr. Peter Hendrick

The urban infill will be available wherever there is infrastructure that we can use. That makes much more sense because the cost of going back into an urban area is very high. It is much easier to procure a service from a third-party operator.

Chairman

In layman's terms, I still do not understand if it is technically possible to link those houses in the gap intervention areas that are alongside the blue in rural villages, where they have an Eir fibre cable not that far away, into the existing fibre cable? Is it possible to buy that capacity from Eir?

Mr. Peter Hendrick

Technically, we could do it. There is a lot of risk and cost associated with doing it.

Chairman

Why?

Mr. Peter Hendrick

We cannot determine the performance of the network, the distance the light is travelling across those cables, over 25 years. We cannot guarantee a future-proofed service. Also, the cost of renting that infrastructure is greater than actually putting our own fibre on Eir's poles. Operationally over 25 years, my most important focus is that there is never a need for another intervention plan and that the NBP network can both technically and financially support the operational cost of servicing all 560,000 houses.

Chairman

In the urban areas, then, can Mr. Hendrick explain to me how that is being done technically?

Mr. Peter Hendrick

In the urban areas, what we would look to do, rather than necessarily adding a fibre connection to some of the premises in Dublin, is to procure what we classify as a fibre leased line from the likes of Eir or Enet. It would be a more expensive service but over the life of 25 years it would still likely be cheaper than us bringing fibre all the way through Dublin to connect.

Chairman

That is because there is a volume of premises to justify it.

Mr. Peter Hendrick

Correct.

Chairman

Before I ask about Limerick I would like to ask about the funding model of NBI. That model is a combination of money coming from the funding providers and money coming from the State. Am I correct?

Mr. Peter Hendrick

There are three forms of funding. We have our equity which we call down. If we call down equity we have to give our shareholders six weeks' notice. We do financial planning at the beginning of the year and then throughout the year. We call down equity as is needed. We have subsidy when we achieve milestones under the contract. They are typically around design, build and connection of premises. It is broken down discretely to achievement of milestones. Then we have revenue where we have connected homes and the retail operators pay for that service.

Chairman

When Mr. Hendrick speaks about equity, this particular funding element that currently there appears to be negotiations taking place in respect of a change in ownerships, I am assuming that those particular loan notes, there is call on those in terms of providing funding at certain points in time.

Mr. Peter Hendrick

Correct.

Chairman

They receive a certain rate of return.

Mr. Peter Hendrick

It is not a guaranteed rate of return. They would have an expectation on a rate of return based on our financial plan.

Chairman

An interest payment from NBI itself.

Mr. Peter Hendrick

How they have invested in terms of loan notes or equity really is dependent on the shareholders themselves. If they put it in as loan notes, it does not come with a guarantee of a return.

Chairman

In essence what is happening there is that shares, or the loan notes here, which are now there are commitments to NBI, are being sold to another third party.

Mr. Peter Hendrick

If we combine the loan notes and equity, it is classified as equity, the new investors may not choose to put in loan notes. They might put it all in as equity. It just depends on their own financial requirements.

Chairman

It is the commitment.

Mr. Peter Hendrick

It is the commitment, correct.

Chairman

The question I am more interested in is the security of the funding model for the roll-out of national broadband. The revenue is going to be based on the number of connections.

Mr. Peter Hendrick

Correct.

Chairman

The subsidy is agreed with the Government and the Department of Environment, Climate and Communications.

Mr. Peter Hendrick

Correct.

Chairman

On the equity element, what are the commitments under equity? Is that in the public domain?

Mr. Peter Hendrick

Yes. The commitment to date is that there has been €120 million invested by our shareholders. There is another €103 million of commitment within our shareholders' agreement that we have committed. That is above and beyond what we committed in the contract. The contract was €175 million but we have within our shareholders' agreement----

Chairman

That is €223 million.

Mr. Peter Hendrick

Correct, that is committed by the shareholders.

Chairman

To date, €120 million of the €223 million has been invested.

Mr. Peter Hendrick

Correct.

Chairman

How much of that is coming from David McCourt himself and his investment?

Mr. Peter Hendrick

Granahan McCourt is controlled by David McCourt. David McCourt is an investor in Granahan McCourt but he controls it through the structure in terms of funds that he has brought together.

Chairman

What percentage of NBI do they own?

Mr. Peter Hendrick

I am going to classify it as between David McCourt and Tetrad Corporation, which is David's long-term partner, it is just under 20%.

Chairman

The balance then is 80%.

Mr. Peter Hendrick

Correct, between Twin Point Capital, Oak Hill Advisors and some minority shareholders.

Chairman

That 80% is what is currently the subject of discussions in terms of it being sold by Oak Hill Advisors and Twin Point Capital, which are basically funds.

Mr. Peter Hendrick

They are.

Chairman

They are selling their 80% stake. Is that different in profile from the 20% held by the McCourts?

Mr. Peter Hendrick

David McCourt and Tetrad Corporation, which was founded and led by Walter Scott Jr., have been in telecommunications and construction for over 30 years. They are not selling shareholders.

Chairman

The question I am asking really is in respect of the commitments in terms of funding that are currently in place with Twin Point Capital and Oak Hill Advisors. In terms of the taxpayer, does NBI have that guarantee or security of its funding model to enable it to do the roll-out if they sell to another third party?

Mr. Peter Hendrick

Any shareholder change requires ministerial consent. The Department and its advisers would verify that all of the appropriate contractual project agreement documents have been signed by any investors, that they are stepping into the exact same obligation. There is due diligence required in terms of any change in shareholding by the Minister.

Chairman

In terms of Oak Hill Advisors and Twin Point Capital, have they to date given any funding from the €120 million?

Mr. Peter Hendrick

Correct, both would have, effectively to their own proportion of equity.

Chairman

It is the same with the McCourts, they would have provided funding in proportion with their equity.

Mr. Peter Hendrick

Correct.

Chairman

Has any communication gone to the Department of the Environment, Climate and Communications or the Minister, Deputy Eamon Ryan, as yet?

Mr. Peter Hendrick

No, it has not.

Chairman

When is that anticipated to come through?

Mr. Peter Hendrick

I cannot give an exact date but I would expect potentially within Q3 there would likely be a submission to the Department whereby they would effectively do their due diligence on the change of shareholder.

Chairman

I thank Mr. Hendrick. I want to get a full understanding of how it is done. At the moment, what percentage of the roll-out in terms of the poles, cable and ducting is carried out by Eir?

Mr. T.J. Malone

Initially, when we set out the plan, we did a high-level design. We thought that roughly 10% of the project would be new build, which would be done by us. The remaining 80%-----

Chairman

Is that not 90%?

Mr. T.J. Malone

I apologise. Yes, it is 90%. The remaining 90% would be carried out predominantly on Eir's infrastructure.

Chairman

Is that Eir's poles?

Mr. T.J. Malone

And duct. When we take the poles and ducting, it is split as well. When we did the initial high-level design, we thought it would be somewhere in the region of 80% overhead and 20% underground. What we are finding now with the low-level design, which is the one when we get on the ground-----

Chairman

Does "overhead" relate to poles?

Mr. T.J. Malone

I apologise, yes, "overhead" is poles. What we are finding when we do the low-level design is that it is probably about 75% overhead and 25% underground. There is a portion of the 25% underground that we are allowed to work on ourselves.

Chairman

What is the portion?

Mr. T.J. Malone

I think it is about 25%.

Chairman

What I want to understand is NBI's capacity at the moment in terms of its current arrangement with Eir to speed up the roll-out and, if the self-install comes in, what scope will that provide in layman's terms? That is really the point I am trying to get to.

Mr. T.J. Malone

If I switch it back the other way, the-----

Chairman

When we speak about the self-install, are we talking about the 25%?

Mr. T.J. Malone

No, not when we are talking about the self-install. That will be separate to that. It will be on top of it.

Chairman

Yes, but in terms of-----

Mr. T.J. Malone

There is probably an easier way of explaining it. We have 2,500 km capacity with Eir at the moment.

Chairman

Is that 2,500 km with poles?

Mr. T.J. Malone

Yes, there are poles on top of that. Eir does poles on top. The initial commitment was 22,500 poles per year. Eir agreed to increase that up to 30,000 poles starting on 1 October last year. That was due to go to about 40,000 poles in April of this year and capped out at 50,000 poles on 1 April next year. Eir has struggled to resource the poling because a number of the poling contractors probably-----

Chairman

So where is that at the moment?

Mr. T.J. Malone

We are still at 22,500 poles. Eir has re-forecasted-----

Chairman

Where does that link into the 2,500 km?

Mr. T.J. Malone

They are separate, but we need both.

Chairman

Mr. Malone is talking about 2,500 km of cable.

Mr. T.J. Malone

Of ducting.

Chairman

With fibre broadband in the ducting.

Mr. T.J. Malone

We put the fibre into the ducting.

Chairman

That can be either underground or on the poles.

Mr. T.J. Malone

No. The 2,500 km of sub-duct underneath the ground represents about 25%.

Chairman

That is the point. That is the 25%.

Mr. T.J. Malone

The rest of it is on poles.

Chairman

So if NBI gets to self-install, it will really only speed up about 25% of the roll-out? Is that correct?

Mr. T.J. Malone

Yes, we will be able to speed up. We have envisaged that there will not be a problem. By the end of this year, we think Eir will be able to keep well ahead of us with the poles. We believe that will not be a problem.

Chairman

Now, the question is how many poles, on average, are involved in the 2,500 km? If we go up to 50,000 poles, does that increase the number of kilometres covered?

Mr. T.J. Malone

It will increase what we are able to do.

Chairman

By what level?

Mr. T.J. Malone

It is 80% of the make-up that is on overhead poles, so the more Eir can increase that, the better.

Chairman

If NBI is going from point A to point B, for example, from Murroe to Cappamore, which are rural areas in County Limerick, many of these areas would have a combination of underground ducting and overhead cables. I understand the concept of self-install. If NBI can get to self-install, it means that it should be able to significantly speed up 25% of the mix.

Mr. T.J. Malone

That is correct.

Chairman

However, is NBI still not restricted in terms of the poles?

Mr. T.J. Malone

I get the point now. We are, if Eir cannot increase the number of poles, but the difference is that Eir has committed to increase the number of poles. It cannot increase its duct capacity any more, so that is where we need to come along and increase that. It has committed to increase its poling, but it has had problems getting there.

Chairman

In terms of ducting, how many has Eir said it will do? What is its capacity per annum?

Mr. T.J. Malone

sIt is 2,500 km on the ducting.

Chairman

Yes, on the ducting, and on the poles then, it is another 22,000. The point I am trying to make is that in terms of NBI's total capacity in regard to distance in a year, it is 2,500 km of ducting, but typically, how many poles would it be?

Mr. T.J. Malone

At the moment, to get to where we need, about 35,000 to 40,000 poles are required. Providing that Eir can give us the increase in poling that it has committed to, which-----

Chairman

It is only at 22,000 at the moment.

Mr. T.J. Malone

It has re-forecast its plan to get to 30,000 poles on 1 October of this year. It will increase that to 48,000 poles in April next year.

Chairman

In April 2023, there will be 48,000 poles.

Mr. T.J. Malone

If Eir reaches its commitment on the poles, the poles will not be the limiting factor. It will be the sub-ducts.

Chairman

It is 20,000 at the moment. It will go to 30,000 in October, 48,000 in April 2023 and up to 50,000 poles.

Mr. T.J. Malone

If we get to 48,000, that is fine.

Chairman

That is if NBI can get to that point.

Mr. T.J. Malone

If we get to that point, we will be fine.

Chairman

Obviously, if the self-install comes, that will speed up the overall process.

Mr. T.J. Malone

That is correct. We need both to come together.

Chairman

Overall, based on NBI's current capacity with Eir, if nothing changes, how long will it take to reach the target? When does NBI plan to have the full roll-out completed?

Mr. T.J. Malone

We are getting it back within the seven years, but we will have to make some changes to designs to do that.

Chairman

When will the seven years be reached?

Mr. T.J. Malone

It would be 2026.

Chairman

When Mr. Malone says 2026, is he including the 50,000 poles in that calculation?

Mr. T.J. Malone

In 2026, we will not need the full 50,000 but we will need an amount of them.

Chairman

If NBI gets to self-install, how much will it be able to bring back the roll-out?

Mr. T.J. Malone

It all depends-----

Chairman

I appreciate that.

Mr. T.J. Malone

It depends on when we get it, which is the big thing for us. We think we could knock up to a year off it, but it is completely contingent on when we get-----

Chairman

It could be 2025. It is very important in that context.

Mr. T.J. Malone

The first thing it does is it de-risks the seven years.

Chairman

What does that mean?

Mr. T.J. Malone

It de-risks any problems we might have in the seven years that we do not see at the moment. First and foremost, it would de-risk it and make sure that we come in on our contractual plan.

Chairman

It would speed up the roll-out to those gap intervention areas.

Mr. T.J. Malone

Absolutely.

Chairman

And it de-risks in that sense. I asked this question of Mr. Hendrick previously. When NBI has completed the roll-out, what percentage of the land mass in Ireland will have fibre cable?

Mr. T.J. Malone

It will be 96%.

Chairman

What level does Eir have currently?

Mr. T.J. Malone

On a fibre basis? Mr. Hendrick might know it.

Mr. Peter Hendrick

On a kilometre basis, if we look at the three main fibre networks, SIRO is something close to 10,000 km of fibre; I estimate that Eir is somewhere around 30,000 km of fibre and the NBP will be about 100,000 km of fibre. When we try to compare, the number of premises we build per annum versus other commercial operators, they are not equal. In response to Senator Buttimer’s point, there are a lot fewer homes per kilometre in our programme, therefore, we are having to deliver a lot more.

Chairman

I come at this slightly differently: I will not tell NBI how to suck eggs. I think NBI is more than capable. I fully understand where Mr. Hendrick is coming from. The self-install could bring it back a year. That is very important. At this stage, NBI has concluded its discussions with Eir on poles and it is confident about what has been agreed. The local authorities are now operating in a very streamlined way. Our objective is to get the roll-out completed. Anything to do with negotiations on funding goes back to the Department in terms of due diligence. There is a control mechanism there in terms of security of funding. Could Mr. Hendrick indicate how much the Department has paid to date?

Mr. Peter Hendrick

I can give the exact number.

Chairman

While Mr. Malone is waiting, I will be looking for the Limerick data and then I will conclude.

Mr. T.J. Malone

I am sorry.

Chairman

There is no rush.

Mr. T.J. Malone

I will have a look while Mr. Hendrick is working through that.

Deputy Ruairí Ó Murchú

I am surprised. I was going to remind you, Chairman, anyway, that it was rather remiss of you to forget about your constituents.

Mr. Peter Hendrick

I can give those numbers now. To date, we have received €223 million in subsidy. That is on the back of achieving all the milestones. In addition, the subsidy is counted against what we call permitted expenditure. It is all associated with activities relating to building and operating the network.

Chairman

NBI has €223 million from the State and €120 million from its investors. How much has NBI been able to generate in income to date under the funding model?

Mr. Peter Hendrick

Revenue in the first couple of years is always quite small.

Chairman

I appreciate that.

Mr. Peter Hendrick

We are talking about single-digit millions of euro for this year in revenue, but it grows pretty quickly. We are at just over 14,000 homes connected to date. I will put a number on our ambition for the next update, so everybody has a target. It is an internal target for us in driving revenue. Revenue is important. We are aiming to end the year with between 23,000 and 25,000 homes connected. I believe we can do better than that, but it is-----

Chairman

That is pretty ambitious. You are looking at seven months to reach that target from 14,000, but you believe that is achievable.

Mr. Peter Hendrick

In the update we gave the committee in March we were at 7,900. We have almost doubled that in just over three months.

Chairman

NBI is looking to get to between 23,000 and 25,000 by the end of this year.

Mr. Peter Hendrick

That is correct.

Chairman

I have a final question on the overall costs. Some €246 million is the funding that has gone in to date. What will be the total cost for roll-out or what is NBI budgeting it at?

Mr. Peter Hendrick

Recollecting the cost for the build itself, it is €1.1 billion.

Chairman

So NBI has spent a third of that to date.

Mr. Peter Hendrick

That is correct. Some of this is also the rental. We are renting Eir's infrastructure over 25 years. Then there is a connection-based subsidy, which is just over €600 million, for connecting from the network to the home. They are probably the three main categories - renting Eir's infrastructure, building the network and the connection subsidy.

Chairman

Has the Department penalised NBI in any way in respect of payments to date for not meeting targets?

Mr. Peter Hendrick

Penalties come into effect from February this year. We get relief under the contract for things that are outside our control, such as Covid-19 or storms. Regarding relief, there is no compensation for relief so we do not get paid any additional subsidy. We obviously have costs and overheads during that period so we do not get to recover those. We have got a delay in revenue, so that is an impact. There are three factors in terms of penalty - cost, revenue and also penalty from the Minister if we have not hit our numbers by the end of this year. Even though 102,000 is the number we have set, we have still accounted for some delay on our side with regard to hitting that number. We recognise there is a penalty even hitting the 102,000 because of the approximately eight to 12 months of delay. Some of that is on our side in respect of mobilising and getting everything up and running.

Chairman

The 102,000 is a target for the end of the year.

Mr. Peter Hendrick

It is a target. Even with achieving the 102,000 there is a risk that we get a penalty.

Chairman

What was the original figure to the end of the year?

Mr. Peter Hendrick

It was 205,000.

Chairman

Could NBI still be hit for penalties?

Mr. Peter Hendrick

Even by reaching 102,000 we could be hit with a penalty.

Chairman

When will NBI know that?

Mr. Peter Hendrick

We can provide an update towards the end of the year on that.

Chairman

At this stage, the 102,000 does not mitigate the penalties.

Mr. Peter Hendrick

No, it does not. That is why our focus is not just about the penalty but about the cost and the revenue. We are very focused on recovery on that.

Chairman

That particular matter has not been discussed with the Department yet.

Mr. Peter Hendrick

It has been discussed. We have not received a penalty yet because we have achieved our first quarter number in homes passed as well as in the second quarter. However, at the end of the year, depending on where we were supposed to be in the contract, there could be penalties.

Chairman

NBI has met its targets in the first and second quarters in 2022.

Mr. Peter Hendrick

That is correct. We are confident we will meet our targets in the third and fourth quarters to hit the 102,000 premises passed, but there are other mechanisms in the contract which are subsidy payment related, the M2s. When we pass a premises we submit all the documentation to the Department once we have closed a deployment area. In order to get our M2 subsidy-----

Chairman

What does M2 mean?

Mr. Peter Hendrick

Milestone No. 2. Milestone No. 1 is that Mr. Malone's team will do designs for the deployment area. Once the designs are verified and approved by the Department and an independent certifier, it sends us what is called a milestone achievement certificate. We have committed contractually that we will hit certain milestone achievements within this year. We do the designs and we hand them to the Department. Currently, we are ahead of the milestone achievement certificates for design, so we are looking very good there. On the milestone achievement certificates for the build, which we call the M2s, once Mr. Malone's build is completed we have a lot of evidence we have to share with the Department about the build programme, the ability to connect homes and the costs. There is a huge amount of work which typically can take three to four months after completion of the build. The Department validates all that detail and then an independent certifier certifies that we have achieved everything we were supposed to in the contract. There are M2 dates in the contract and if we do not get those M2 dates or if some of them slip, we can be hit with penalties.

Chairman

Is that about the build?

Mr. Peter Hendrick

It is on the build. We can be hit with penalties associated with the M2 dates even if the premises are passed.

Chairman

What is the target for the build up to the end of this year?

Mr. Peter Hendrick

The 102,000 is the premises passed. Can Mr. Malone say how many M2s we have achieved?

Mr. T.J. Malone

I am not sure. I can refer back to the committee on the exact number of M2s. What Mr. Hendrick is saying is that we can still receive a penalty for not having the paperwork in the M2 part of it. It is not going to affect the premises that go live or the end user. The end user figure is 102,000. That is there, but it just takes time for us to gather the evidence from the contractors and compile the paperwork that needs to go with that back to the Department.

Chairman

Is NBI expecting to be issued with a penalty by the Department?

Mr. Peter Hendrick

We are working really hard to ensure we outperform and do not get hit with a penalty.

Chairman

Finally, will Mr. Malone comment on Limerick?

Mr. T.J. Malone

There are just over 21,000 premises in the intervention area in Limerick. Today, there are 2,522 premises deemed passed and 2,622 built. Another 100 will come into that shortly as passed. By the end of this year we envisage having 4,940. We will have built almost double what the number is at present. Not every one of those will be passed, but they will be in subsequent weeks. We will have built almost 5,000 in Limerick.

Chairman

What about 2023?

Mr. T.J. Malone

I will give the complete statistics for what is going to be built in 2023. From a survey point of view, by 2023 we will have 100% surveyed in Limerick. We will have build commenced on 72% of the entire amount in Limerick by the end of 2023. We will have almost 50% built complete by the end of 2023.

Chairman

That is a significant increase. It is approximately 25% at the end of this year so NBI is doubling that next year.

Mr. T.J. Malone

Exactly.

Chairman

We have spoken about this year and at the end of 2023, nationally, in terms of the statistics NBI will have for the premises surveyed. We spoke about NBI getting back on track to the original targets. What will the position be at the end of 2023 and when is NBI looking to get to a point where it is back on track for the original targets?

Mr. T.J. Malone

To get back to seven years, one does not get back on track until one is at the seven-year point. Otherwise, one would be doing it sooner than seven years. We bite into that in incremental chunks as we go along. It really starts to bite back into it probably from 2024 onwards. Next year, 2023-----

Chairman

Can we just go through the statistics? Will all premises be surveyed by the end of 2023?

Mr. T.J. Malone

Yes, pretty much all surveyed. At present, we are trying not to get too far ahead on the survey and design because obviously things change. What we would identify today from a tree cutting perspective could be completely different 12 months later.

Chairman

What about the target of all premises surveyed?

Mr. T.J. Malone

Survey and design will not be the issue in this. We will have all the premises designed by the end of 2024.

Chairman

So the surveys will be done by the end of 2023 and designs done by the end of 2024. What about the build under way?

Mr. T.J. Malone

I do not have the exact figure for when all the build under way will be commenced, but I would imagine we will have it all commenced by the end of 2025.

Chairman

Then the premises with the fibre build under way is the same.

In 2025 the self-install will come on board. Could they pull that date back?

Mr. T.J. Malone

We could have it commenced earlier. Yes, we could pull it back. The exact length by which we could pull it back has yet to be determined. While it could potentially be six years, that is yet to be determined.

Chairman

However, we will think positively.

Mr. T.J. Malone

That is correct.

Chairman

The NBI has a firm amount of work done. As a committee, we have role for the taxpayer and for people we represent. We also need to get the network rolled out as quickly as possible.

Mr. T.J. Malone

On that point, some aspects are forgotten. We tend to completely focus on the build. While this is the right thing to do because, ultimately, this is the thing that gets passed, we are also doing a huge number of connections, as Mr. Hendrick said. They are going on at the same time. We have nearly 700 primary cross-connection points, PCPs, rolled out in that period of time. That is not a small thing. Over 300 schools have been included in that. There is a huge amount of work ongoing in parallel to just the build. A huge amount of our own team are involved in that as well.

Chairman

We appreciate that.

Deputy Ruairí Ó Murchú

In relation to the PCPs, which probably does not completely fall in to NBI's bailiwick, I am imagine that some of them are for proper remote working hubs, etc., and others are where somebody had an idea to put it in a GAA hall. Even when the NBI was on RTÉ Radio 1, there was an interview with a guy about a local GAA hall somewhere in Roscommon. Nobody had been showing up to it. There is probably an element of that. There are wider issues in relation to where they should be put. Remote working hubs, where they can be put in place, can be beneficial. However, the NBI is asked to supply and it is supplying. It will not be able to give me much of an answer on that.

Mr. Peter Hendrick

The Deputy is right that the level of utilisation is probably different in different locations. However, the Department of Rural and Community Development is supporting the Connected Hubs programme. It has offered vouchers to people to go and use them. Equally, we have partnered with the Rise Foundation which is enabling technology and is supporting the funding of technology in some of those digital hubs. We had our board meeting in Cork in May with our board members. We have seen the benefit that it has brought to community hubs where there had not been any life in the community for a long period of time. We had men's sheds and the GAA in Carrigaline. They are starting to utilise them. The access to technology and learning how to use the technology are critical parts to people utilising it.

Deputy Ruairí Ó Murchú

There is no point in going back over it. The fact is that the only game in town is the self-installed product. The quicker that can happen the better. The quicker it happens, the more chance we have of pulling seven years back into six years.

On the issue of penalties, is it a matter of paperwork? Initially it sounded like the NBI was being kept to what had been the previous deadlines or timelines, while factoring out a certain percentage that was allowable for Covid-19, but some of it was seen to be at the NBI's door.

Mr. Peter Hendrick

Everybody understands premises. They understand that there are many homes they have to pass. Maybe we did not explain it correctly. The exam test is the evidence to show that we have got all the paperwork; that we have paid all our suppliers; that we have tested all the parts of the network; that the network works; that we have done our demand stimulation; and that we have managed our stakeholder engagement. There are many tests that we have to do in each of the 227 deployment areas. There are a number of reports that we have to deliver to the Department and to the independent certifier.

An independent certifier goes out into the field and validates that we have done everything that we said we were going to do. There is a huge amount of process work. We are trying to automate all of those reports so that we can get them done faster. Yet, at the moment, there are still many people involved in pulling together all of those reports, in working with the contractors and in getting those reports.

The milestone dates are set in the contract. The dates that were originally in the contract got pushed out for issues that we got relief upon, in other words, Covid-19. We had to evidence all of those impacts. We had to show where we were impacted. The Department had to validate that with its advisors that that was the case.

Deputy Ruairí Ó Murchú

The penalties are on the new dates that have been agreed on, combined with the follow up information, on which there are difficulties putting together. However, the NBI is trying to mitigate that.

Mr. Peter Hendrick

Effectively, we are resourced to deliver that milestone achievement documentation. They have to be certified. Only when they are certified by the independent certifier do we get a milestone achievement certificate, MAC. We have to have achieved that within the date that we have set in the contract. If it is delayed, we pay a penalty for that delay.

Deputy Ruairí Ó Murchú

The other point that is that the faster this happens the better. In some places people have been facilitated in the sense that alternatives have become available. Has the NBI done any engagement with the mobile phone and broadband task force? My understanding is that it has tasked ComReg with putting together a list of alternatives, particularly for those people who will be waiting at the tail-end of delivery on the NBP. It may be a case of them using some sort of low earth orbit satellite system, a fixed-wired system, a mobile system or whatever sort of solution. Is that the state of play?

Mr. Peter Hendrick

The mobile phone and broadband task force is really about supporting the building of that infrastructure faster, and that includes the NBP. There are mobile black spots where there is no mobile coverage, never mind broadband. It is critical that those black spots are covered with mobile signals. The NBP will be critical to that because part of the challenges is that one might put a tower in a place where there is no mobile broadband, but if you cannot get backhaul, particularly if you are using wireless backhaul, there is no line of sight. The fibre infrastructure will therefore be critical for that.

From an NBP perspective, this about building a future-proofed network. Some of the operators, and there are 56 of those, are quite large and are bug-fixed mobile operators. Some of them are wireless operators. They are predominantly local wireless operators. We are seeing in Cavan, I will take Eurona Arden as an example, is a wireless operator in the Cavan region. Not all of its customers are served from our first deployment in Cavan. However, it has migrated a number of hundred customers onto our network. This has meant that its base station, or coverage area, does not change. However, the utilisation within that coverage area has changed. It has fewer customers on the wireless network, which has meant that the customers who are remaining on it might be outside of our deployment area today, but it has an improved broadband service. However, it fully recognises that it will move all of its customers onto the fibre network when it comes. As we roll out our network, there will be an improvement of broadband particularly for some of those local wireless networks because we are taking capacity off it. It is very much committed to migrating its customers to the fibre network. It is probably offering more innovative services around smart farming, wireless within the home and wireless within the farm-----

Chairman

Mobile data is non-fibre. They still need fibre.

Mr. Peter Hendrick

Absolutely. There is a European connected fund to support mobile black spots. The Department is managing that, as well as further sub-sea fibre capacity to Europe.

Deputy Ruairí Ó Murchú

We have all heard the figures in relation to what the Government is paying for this in its entirety. Yet, every now and again somebody throws out that it is €2.7 billion, €2.8 billion or €2.9 billion. Some people come out with a figure of €5 billion, etc. Can Mr. Hendrick put it on the record how much exactly it is?

Mr. Peter Hendrick

The subsidy is capped at €2.6 billion. There is no additional subsidy and any shortfall in our ability to manage our costs or to drive the revenue falls to equity. Of that €2.6 billion, €2.1 billion is associated with the build and rent of the network. That includes the connections. There is a €500 million contract assumption or contingency subsidy.

Deputy Ruairí Ó Murchú

If the NBI was putting in for the encroachment, will that come out of that figure?

Mr. Peter Hendrick

It will come out of the total €2.6 billion.

Deputy Ruairí Ó Murchú

Does it come out of the €2.6 billion?

Mr. Peter Hendrick

I think it is out of the total €2.6 billion.

Deputy Ruairí Ó Murchú

Does it not come out of that €500 million?

Mr. Peter Hendrick

I am sorry. The Deputy is correct. It comes out of the €500 million.

Deputy Ruairí Ó Murchú

That is what I would have thought.

It would be remiss of me not to ask a question about the roll-out of the NBP in the greatest and smallest county in Ireland.

Mr. T.J. Malone

I thought for a minute that the Deputy was going to forget to do so. There are small numbers in County Louth. There is the figure of 8,249 within Louth of premises within the intervention area.

We have passed 3,231 at the moment, so they are available for connection. There are 3,402 built, so there are about 170 to come into the mix shortly. By the end of this year, we will have 4,189, so almost 50% of Louth will be fully built.

All the surveys will be completed by 2023, while 72% of builds will be commenced by 2023 with 100% commenced by the end of 2024. The build-complete for 2024 is 66%. I will come back to the Deputy on the 2023 number on that. I do not have it at the moment.

Deputy Ruairí Ó Murchú

At the end of 2024, 66% will be built, so 34% will fall into the back end.

Mr. T.J. Malone

The back end of that, yes. There will be 50% built by the end of this year, which in the early stages is probably well ahead of most counties.

Deputy Ruairí Ó Murchú

I get that. Unfortunately, these are the people who ring and have a conversation about how they saw the van but it is just up the road. If we could get that self-installed product in place, we could bring those numbers forward.

Mr. T.J. Malone

Until we finish this, whether that is seven or six years, it will always be just up the road for somebody as we keep moving through it.

Chairman

At the moment it is either three and a half or two and a half years. The State subsidy is €2.6 billion, so what is the total cost of the build?

Mr. T.J. Malone

The actual build is about €1.1 billion.

Chairman

Of the €2.6 billion, the State has paid €223 million to date. Is that correct?

Mr. T.J. Malone

It has paid €223 million, which includes not just build payments but also subsidies for the connection Mr. Hendrick talked about.

Chairman

Is it €223 million of the €2.6 billion?

Mr. T.J. Malone

Yes. There is an element of work in progress on top of that that has not come as yet.

Chairman

What is the total commitment from the shareholder equity funders?

Mr. Peter Hendrick

Contractually, it is €175 million in total.

Chairman

The State has a commitment of €2.6 billion. The funders have a commitment of €175-----

Mr. Peter Hendrick

Contractually, it is €175 million, but there is a commitment between the shareholders of €223 million.

Chairman

It is ironic that the amount the State has paid to date and the shareholders' overall commitment is the same figure at this moment. Does Senator Buttimer wish to come back in?

Senator Jerry Buttimer

The Chair has covered much of the ground. I reiterate that the important point is about delivery and ensuring we implement the national broadband plan. I thank the witnesses. The important point is we overcome the obstacles to the delivery of this. I hope we will have the national broadband people back in regularly.

Deputy Ruairí Ó Murchú

The witnesses have kind of answered it but there were a number of issues relating to the planning process and looking for that level of capacity. Do the witnesses not think that will be major odds into the future? Are they happy enough they are where they are? Is there nothing we need to fix or tweak?

Mr. T.J. Malone

Does the Deputy mean within the local authorities?

Deputy Ruairí Ó Murchú

Yes, and even beyond. We get the point about Eir. That is the shooting match. Is there anything else that can be fixed, even if it has less of a benefit?

Mr. T.J. Malone

I have not been in contact on this in recent months but my understanding is there is a commitment from the Department to fund additional resources in the local authorities that will help to pick that up. I am not fully on board as to where that ended up but there was a commitment. I am not sure of the exact figure but there was a monetary commitment from the Department.

Deputy Ruairí Ó Murchú

We would need that.

Chairman

It is fair to say that National Broadband Ireland is on track for 2026. If the self-install were to arise where it could do the ducting and so forth itself, that could bring it forward by a year. It is very much on track for the 102,000 houses passed by the end of January. It could be brought forward to the end of December. That is the key focus. In the aftermath of that case being heard and the outcome regarding the self-install, we might come back for an update on switching the targets. What this fibre broadband roll-out will bring, particularly to rural areas and in the world we live in today, cannot be overstated. We wish the witnesses well with their work. What are the challenges over the next year, outside of those we have gone through?

Mr. Peter Hendrick

It is the first time we have come in and been able to say what we have achieved in numbers. We have forward confidence in the numbers ahead. It gives us, as an organisation, a lot of confidence, as it does our customers, customers being the retail operators and end users. We can with more certainty predict the numbers and, concerning the risks we have had over the past 18 to 24 months, we know what they are and how to mitigate them. There will be constant management of that. The more volume we can get in the process in terms of make-ready, the better it is. We are forward-buying materials to make sure we do not have supply chain risks. There are risks out there in terms of materials and supply chain so we are buying ahead to make sure we have it in.

Chairman

Has National Broadband Ireland been affected by the increase in the costs of materials?

Mr. Peter Hendrick

We have forward-bought, in some cases up to three years ahead. We are finding, especially on active equipment, that some operators across the world are buying 18 to 24 months ahead for equipment that goes in the home.

Chairman

Is there anything in terms of costs that will impact on the roll-out over the next 12 months?

Mr. Peter Hendrick

There is a risk of inflation across the board. We are managing our costs. Our costs today are where we wanted to be from a budget perspective but there is constant management. We will keep the committee informed of our progress.

Chairman

It is hoped the number of houses will be 102,000 by the end of the year. For the end of 2023, under the revised targets, has the figure been agreed yet?

Mr. Peter Hendrick

We are working through the final remedial plans with the Department. What does the plan look like now, contractually? We will not be able to build in self-install until we see where that goes, but we will contract with the Department on what those numbers will look like. We are in that engagement right now.

Chairman

Has National Broadband Ireland not finalised a figure for the end of 2023 yet?

Mr. Peter Hendrick

At the end of this year, we will have 221,000 where construction is under way. The number will probably be between 180,000 and 200,000. We would like to see those figures passed, but have not firmed the number up.

Chairman

National Broadband Ireland would be looking to get between 80,000 and 100,000 on stream next year.

Mr. Peter Hendrick

We would like to see 180,000. Whether we can overachieve that will be dependent on the likes of self-install.

Chairman

That will bring National Broadband Ireland to the end of 2023. Have the witnesses gone out to the end of 2024?

Mr. Peter Hendrick

We have looked at it but we have not firmed the numbers up.

Mr. T.J. Malone

We are working through that at the moment. We are behind on the plan, as everybody knows. When we say seven years, we see a pathway to that but still have to get there. The incremental pieces will go from 2024 onwards. We will get to 2024 and start eating back into that to get it down to seven. We have not finalised the plan for 2024 onwards, although we see the pathway to get it done.

Chairman

National Broadband Ireland is looking at, midway through 2024, the number of homes passed reaching the half milestone. It is looking at 200,000 of 550,000 homes.

Mr. Peter Hendrick

Yes, within 2024, we should be halfway through the programme.

Deputy Ruairí Ó Murchú

When will National Broadband Ireland be firming up on the 180,000 figure and beyond?

Mr. Peter Hendrick

The likelihood is it will be over the next three to four months. It is about securing our contractors as well. We are in a procurement process with our contractors.

We have, effectively, done the designs for the premises and we have given Eir the make-ready programme. It is now about getting our contractors to commit to delivery dates beyond that.

Chairman

What is the total headcount in the NBI? How many people are working as subcontractors?

Mr. Peter Hendrick

We have 306 people in the company. The contractor headcount is in excess of 1,200 now.

Mr. T.J. Malone

It is just over 1,200. It is about 1,450, with the addition of 80 people to come in from Gaeltec in the coming weeks and months.

Chairman

There are about 1,200 overall. Are those 306 people in the NBI full-time employees?

Mr. T.J. Malone

Yes, they are.

Mr. Peter Hendrick

Those 306 people are full-time employees. We also have some contractors in doing specific work in the NBI.

Chairman

They would be included in the 1,200.

Mr. Peter Hendrick

They would be included in the overall total of more than 1,500 people on the project.

Chairman

Regarding the figure of 306 full-time employees, what will that number peak at?

Mr. Peter Hendrick

We have estimated it could peak as high as 360. We are trying to automate anything that can be automated so that we will not need many people doing administrative work.

Chairman

When the company is budgeting and submits the proposal to the Department, what kind of headcount is included?

Mr. Peter Hendrick

Regarding the budget for this year, we had approval to go ahead and recruit up to 360 people. It is important, however, that we try to be as efficient as possible. We want to ensure we are not-----

Chairman

Turning to the 1,200 contractors, what will that number peak at? Obviously, when the self-install process comes in-----

Mr. T.J. Malone

Without the self-install facet, we would see this figure, and including the approximately 300, peaking at 1,800 to 2,000 people.

Chairman

What would it be if the self-install process comes in?

Mr. T.J. Malone

It would depend on how quickly it comes in. To be honest, I cannot give a figure in this regard yet. It will take time to understand fully what position we will be in at that stage.

Deputy Ruairí Ó Murchú

How quickly is it possible for it to come into play? This court case is going to be dealt with in a couple of weeks. I imagine negotiations with Eir do not happen over a fortnight.

Mr. T.J. Malone

I cannot say. I suppose it is like asking how long a piece of string is in certain cases. The court case is going to be heard in the next few weeks. We hope we will have a direction of travel to enable us to move somewhere with Eir then. I would have thought the determination and exact ruling in this case will probably not come back until September. Therefore, in that context, I cannot be sure of the timeline. It is not within my remit, but that is what I would think will happen. We are hoping the direction of travel will be sufficient to allow us to stand this aspect up and to start to engage with Eir. If we can engage with the company under the existing major infrastructure programme, MIP, we think we could accomplish this task relatively quickly. When I say that, I mean in several months. As we said earlier, though, if we go into a regulated access product, that process then will take between 12 and 18 months.

Chairman

Potentially, then, if there is a conclusion to the court case and it is possible for the NBI to get into discussions with Eir, it might be possible to have self-installs under way from the start of next year. If not, we are talking about, at the minimum, a start in-----

Mr. T.J. Malone

I could be speaking hypothetically here. Who knows? There is a pathway where we could get to the end of this year and, under the MIP product, an agreement could be reached with Eir regarding the elements a self-install would go ahead with. Time would then be needed for us to mobilise contractors and get these up and built. It would be necessary to go through procurement processes for that undertaking. It would be necessary to get up to speed in that regard and to do all these things. That does not happen overnight.

Deputy Ruairí Ó Murchú

How long would that take? In a perfect world, it would be the end of the year. How long would it then take for-----

Mr. T.J. Malone

I would imagine we would be looking at between another three to six months before mobilisation would start on the ground.

Deputy Ruairí Ó Murchú

In a perfect world, then, it would be halfway through next year. Mr. Malone would probably not put money on that outcome.

Mr. T.J. Malone

I would not put money on any of it, but this is how we would see the situation developing, to be honest.

Chairman

Regarding what can be done in that area, a process is under way in the courts and we do not in any way wish to prejudice the outcome of that in respect of our deliberations. We wish the company well, however, in this endeavour. I thank Mr. Hendrick and Mr. Malone for assisting the committee today with this important matter. The fact they come in before us regularly has made an enormous difference. It has assisted even with the public's understanding of what the NBI does. It has been likewise in respect of us going out and seeing what is happening on the ground. We extend our thanks for that faciliation.

Our next meeting is tomorrow. It is on the topic of road safety and we will have representatives of the Road Safety Authority, RSA, An Garda Síochána and the Medical Bureau of Road Safety, MBRS.

The joint committee adjourned at 4.05 p.m. until 5.30 p.m. on Thursday, 30 June 2022.