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Metropolitan Area Networks Programme

Dáil Éireann Debate, Tuesday - 6 November 2018

Tuesday, 6 November 2018

Ceisteanna (812, 824, 856, 863)

Timmy Dooley

Ceist:

812. Deputy Timmy Dooley asked the Minister for Communications, Climate Action and Environment the process by which the extension of the concession agreement for the metropolitan area networks, MANs, was decided; and if he will make a statement on the matter. [44699/18]

Amharc ar fhreagra

Catherine Murphy

Ceist:

824. Deputy Catherine Murphy asked the Minister for Communications, Climate Action and Environment the date on which the next review of the agreements will be undertaken in view of the fact that in March 2017, following detailed consideration of the available options, both concession agreements regarding MANs were extended to 2030; if there is an optional extension to the agreement and-or contract by either party to extend the existing agreement beyond 2030; and if he will make a statement on the matter. [45002/18]

Amharc ar fhreagra

Catherine Murphy

Ceist:

856. Deputy Catherine Murphy asked the Minister for Communications, Climate Action and Environment the concession agreements that will co-terminate in 2030 in line with the relevant contractual provisions regarding the management of the MANs; the cost involved in the extension of the concession agreements; the amount that the agreements are worth from the date on which they came into existence until they expire; if there are options by either party to extend the agreements beyond 2030; and if he will make a statement on the matter. [45543/18]

Amharc ar fhreagra

Catherine Murphy

Ceist:

863. Deputy Catherine Murphy asked the Minister for Communications, Climate Action and Environment the estimated net benefit to the State from the reduction of the clawback period from ten to five years regarding clawback provisions due at the expiry of the management services entity, MSE, concession agreements I and II in 2030; and if he will make a statement on the matter. [45784/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 812, 824, 856 and 863 together.

In considering whether to extend the existing agreements or retender for a new concessionaire at the end of the term of the Concession Agreements, a detailed review of the MAN’s was undertaken in 2016.  Subsequently, an external review by Norcontel proposed that the preferred option, based on the analysis, was to extend the current concession agreements to co-terminate in 2030.  In March 2017, in compliance with EU and national procurement regulations and informed by legal advice and the advice of Norcontel, both Concession Agreements were extended to 2030 in line with the provisions of the Concession Agreements which provided for an option to extend the term of the agreements for up to a maximum period of 10 years.  The extension provides certainty to telecommunications service providers in the market, and ensures that the MANs fibre networks will continue to play a key role in the delivery of telecommunications services in the regions during a dynamic period in the wider market.

The Concession Agreements have been extended to co-terminate in 2030, as recommended by Norcontel and a decision will be taken in advance of this date on the State’s future role in the MAN’s. The current Agreements cannot be extended beyond March 2030. The costs of the extension of the concession agreements amounted to €28,228 in respect of the external consultant’s report in addition to internal departmental costs.

Enet do not receive any payments in respect of the 28 Phase I MANs.  In recognition of the challenges posed in terms of commercialising and maintaining the MANs located in Phase II towns, Enet received €1.2million in management fees per annum up to June 2018. Enet will not receive any further management fees with effect from June 2018. However, the company is compensated for the cost of care and maintenance of a number of the Phase II MANs and this will continue up until 2024.

Enet has invested over €31million of its own funds to date in maintaining, commercialising and enhancing the MANs assets. The MANs and enhancements to the MAN’s remain in the ownership of the State. The overall fibre footprint of the MANs has increased by over 30% and the State has received approximately €8.5 million to date in revenue share payments under the Concession Agreements.

New clawback arrangements in respect of enhancements to the MANs under the MSE I Concession Agreement were agreed with the concessionaire on 15 March 2017.  The clawback period was reduced from the final ten years to the final five years of the Concession Agreement which is due to expire in March 2030.  There were no changes made to clawback provisions in the MSE II Concession Agreement. The purpose of the clawback arrangements is to incentivise ongoing enhancement of the MANs infrastructure by the concessionaire in the final years of the MSE Agreement.  Payments under the clawback provisions will fall due at the expiry of the MSE I Agreement in 2030, and it is expected there will be a benefit to the State from the reduction of the clawback period from ten to five years. The actual net benefit to the State will be determined by the actual enhancement expenditure by enet in the last 5 years of the contract as agreed by the Department under the terms of the MSE II Concession Agreement.  It would not be appropriate to give an estimated monetary figure as this is commercially sensitive. 

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