Tuesday, 1 October 2019

Ceisteanna (64)

Barry Cowen

Ceist:

64. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the estimated cost of the national broadband plan and the national children’s hospital from 2021 onwards; the area from which funding for the projects will come from; if no project will be impacted upon as a result of these spends; and if he will make a statement on the matter. [39879/19]

Amharc ar fhreagra

Oral answers (6 contributions) (Ceist ar Public)

The Minister will know only too well that the costs associated with the national broadband plan and the national children's hospital have ballooned out of all proportion in recent years. Will he make a statement as to how they will be funded beyond 2021 in light of the alterations which will have to be made on foot of the information becoming available in respect of their costs? I am also mindful of the commitment given on the broadband plan that a contract would be signed in September for its delivery, even in light of these massive costs and notwithstanding our opposition to it. Where does the Government stand on that commitment?

Earlier this year, I inquired of the Minister as to how the Government gave preferred bidder status to a consortium involved in the broadband tendering process. In the event of the Government not proceeding with the signed contract, is there a penalty and what costs would be incumbent on the State?

The Department of Public Expenditure and Reform is responsible for monitoring expenditure allocations on a monthly basis at departmental level. Responsibility for individual projects rests with the relevant Departments. Accordingly, managing the cost of both the national children’s hospital and the national broadband plan projects is a matter, in the first instance, for the Departments of Health and Communications, Climate Action and Environment.

Regarding the estimated cost of these projects from 2021 onwards, I am informed that spending on the national children’s hospital will be in the region of €650 million and the national broadband plan will cost up to €3 billion, albeit for a long period after 2021. In both cases, annual funding will be voted through the Dáil in the Revised Estimates and will subsequently issue from the Exchequer.

The funding for these two projects forms part of the overall capital allocations for their Vote groups. As with all Vote groups, it is for individual Ministers to prioritise the projects to be funded from their allocations.

My role is to oversee the implementation of the National Development Plan 2018-2027, including the capital ceilings underpinning it. To ensure the efficient implementation of the plan, there is a Project Ireland 2040 delivery board, an investment projects and programmes office, a capital projects tracker and a construction sector working group to ensure how best to deliver these projects.

I have published our Estimates ceilings beyond 2021 until 2025. Given the commitment I made that these projects would go ahead and that they would not push out any other projects Departments had in these areas, the capital allocations for these Departments were added on during the summer economic statement. It comes from either running a lower surplus in the event of being able to avoid a no-deal Brexit or a slightly higher deficit if we must deal with a no-deal Brexit.

During a discussion on the cost of the national broadband plan on "RTÉ News: Six One", the Minister stated that, despite it going to a headline rate of €3 billion, the country could withstand it and that it would be paid for out of surpluses and provided for in the coming years. As he has rightly recognised, however, we could be heading into a series of deficits as a result of Brexit, an event that will have implications for the State's finances. Does that leave the Minister in a precarious position regarding his commitment on signing a contract while that wider issue prevails?

Conferring preferred bidder status to a consortium in the broadband tendering process has some legal basis. Has the Minister any estimate of the costs which will accrue to the State in the event of it not proceeding to sign the contract or is there a penalty built in?

My recollection of what I said on “RTÉ News: Six One” is that it would be paid for from Government revenue. However, the Deputy is correct that if we move into a no-deal Brexit scenario, then the country is likely to be running a deficit for a period as we respond to the consequences of dealing with that shock. If that were the case, the Government has not made a final decision on the signing of the broadband contract.

It is at preferred bidder status. My view is that the national broadband plan is still the form of plan with which we should be going ahead. First, for those counties and communities which are likely to experience the most shock from the impact of a disorderly Brexit, the national broadband plan is one that will benefit them the most. From all the modelling we have done on the effect of a no-deal Brexit on different sectors of our economy, it tends to affect more those located outside the larger cities. To help them respond to the shock that a no-deal Brexit could bring, broadband connectivity is exactly what we should be providing.

The point at which we will get into a debate is when we are about to sign a contract. If we do not go ahead with the project, as I believe we should, we will all need to explain, as I know Deputy Cowen will, whether there are alternative ways of delivering the outcome within the timeframe we all want.

The Deputy asked whether there are penalties involved. I understood he had received an answer on that but that is clearly not the case. I will ensure he receives a reply tomorrow.

It would appear that the decision not to sign a contract in September, as had been envisaged, is the result of the implications that signing the contract would have for the State because it now appears that we would borrow much of the €3 billion cost, rather than providing for it from Revenue sources based on the projections that had been made, as the Minister indicated in answer to a question on "Six One". Is it the case that a revision is taking place or the matter is being reconsidered in light of the circumstances? The Minister may answer that question in writing tomorrow and answer my question on the obligations of the State in respect of penalties now.

I am happy to give the Deputy Cowen an answer now. I was apologising to him because the question on legal penalties had not been answered and I thought it had been answered. I will make sure he receives information tomorrow, insofar as it is available to me, to clarify where the Government stands on the national broadband plan.

Any delay in the Minister, Deputy Bruton, bringing a memorandum to Government, which I expect soon, is entirely unrelated to Brexit or any of the macroeconomic concerns that the Deputy and I have touched on. Lest there be any doubt, I still believe we should go ahead with the national broadband plan. A no-deal Brexit would most adversely affect the same communities and parts of the country that would benefit from the national broadband plan. As the Deputy can imagine, when we reach the point of signing a contract, those who believe we should not sign it or that the contract could be improved will need to make a case for how that could be done. As somebody who grappled with this issue for a year, I ask anyone who is committed to 100% coverage and believes fibre optic is the best way of delivering nationwide coverage to come up with a better way of delivering those objectives and making the service available soon.

Question No. 65 replied to with Written Answers.