Dáil Éireann Debate, Tuesday - 14 May 2019
417. Deputy Barry Cowen asked the Minister for Communications, Climate Action and Environment if the national broadband plan will be on or off balance sheet; and if he will make a statement on the matter. [20797/19]
Amharc ar fhreagra418. Deputy Barry Cowen asked the Minister for Communications, Climate Action and Environment if his attention has been drawn to the amount of private equity that will be provided to the national broadband plan; if his attention has been further drawn to the amount of private debt that will be provided to the national broadband plan; his views as to whether it is likely these figures will change up to when the contract is signed; and if he will make a statement on the matter. [20799/19]
Amharc ar fhreagraI propose to take Questions Nos. 417 and 418 together.
The overall estimated project cost is circa €5bn (ex-VAT) over 25 years. This will be made up of the State Subsidy and funding from the Bidder and commercial revenues.
Subsidy will not be paid to National Broadband Ireland until after houses are passed and connected.
That procurement process has now determined that the maximum possible cost to the state will be €3 billion over 25 years (including VAT and contingency), with a requirement on National Broadband Ireland to continue to operate the network for a further 10 years with no further subsidy paid by the State.
Based on the success of the project in terms of managing costs, speed of deployment and end user take-up, the cost could be at least €1bn less but cannot be more.
National Broadband Ireland (NBI) carries all the risk of providing the remaining €2.4 billion to cover future costs.
NBI is ultimately responsible for €2.4 billion of the costs, whether this comes from commercial revenues, equity or working capital.
The bidder will initially invest a minimum level of up to €220m including equity funding to cover working capital requirements.
The Bidder’s equity will be invested ahead of the Government subsidies thereby placing this investment at risk first. The subsidies funded by the State are being provided to cover the costs of passing and connecting rural homes. These are paid retrospectively and only on achievement of milestones set out in the contract.
The Bidder will also bear the risk of having to provide additional equity injection requirements over the life of the project (e.g. for further capital expenditure) and particularly in the initial years where consumer subscriptions are not in line with the Bidder’s own targets to ensure their contractual commitments are met.
