Fewer than 7,000 premises have been connected to high-speed broadband under the National Broadband Plan, two years into the €2.9billion scheme, the Dáil Public Accounts Committee has heard.

National Broadband Ireland (NBI), the company that won the contract to roll out the plan, will face penalties over future missed targets, it was confirmed yesterday.

The assistant secretary at the Department of Communications, Mark Griffin, said that looking at the rollout in 'stark terms', there is 'a problem there and we haven't got where we needed to be'.

NBI confirmed that so far just 38,000 homes and businesses have been passed by fibre, meaning they can place an order through an internet provider to get connected.

NBI originally set a target for 115,000 premises to be passed by the end of 2021, and although the target was cut to 60,000, company officials said it will be the end of March before they meet that figure.

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Responding to questions from Fine Gael TD Alan Dillon, NBI chief financial officer Barry Kelly confirmed that, to date, almost 9,000 orders have been placed for broadband provided under the plan, with fewer than 7,000 already connected.

The committee also heard that 2020 accounts for NBI showed the company paid almost €33million to investors despite posting a loss of more than twice that.

It was estimated that NBI made less than €100,000 in customer income that year.

Mr Kelly told the PAC the money paid to investors did not come from funds provided by the State. He said: 'Our audited accounts show a loss of approximately €70million in 2020; €32.7million was the bid cost that was paid to reimburse the cost incurred by investors over that four-year period. The bid cost was funded by the equity that was put in... at the outset. Under the contract, State subsidy wasn't and can't be used to reimburse the costs.'

Sinn Féin TD Brian Stanley, chair of the PAC, raised concerns about the company's decision to pay investors despite recording a substantial loss. 'It would be unusual for a company to payout in excess of €30million to investors in the year they make a loss of over double that figure,' Mr Stanley said.

Mr Kelly said it would be 'typical' for a company bidding for a project to foot its costs during the procurement process but then to be repaid once the bid was successful.

By the end of 2021, the State had paid €117million in subsidies to NBI for the rollout of the broadband plan. Mr Griffin said NBI had failed to meet some targets set out in its contract with the State.

The senior civil servant said: 'On build, I would say in terms of where we expected to be in absolute terms, relative to the contract and relative to the interim remedial plan, the answer is no [we are not where we expected to be].

'We had expected that by February 1, there would be 60,000 premises passed under the interim remedial plan.'

He added: 'I suppose when you look at in stark terms, you'd say there's a problem there and we haven't got where we needed to be and there are reasons for that.'

The reasons given for the slow rollout included delays due to the Covid pandemic and difficulties in constructing the network.

Mr Griffin confirmed that NBI will face penalties from the start of this month if it continues to miss targets.