The Public Accounts Committee has strongly criticised the procurement process applied to the National Broadband Plan, suggesting that its design and provisions could have deterred several interested providers from submitting tenders for the project.

The Oireachtas committee has demanded that the Department of Public Expenditure and Reform conduct a review of the process to establish if this is indeed the case, and to “inform future procurement processes and ensure maximum competition”.

A PAC statement also said: “It is unacceptable that significant changes — resulting in a major escalation of estimated costs for the National Broadband Plan — were made without a new cost-benefit analysis being carried out. The committee recommends that a new cost-benefit analysis is performed before the final contract is signed to ensure that the full costs, including implementation, are known.”

As it had already been dealing with the vexed question of the massive cost overrun in the National Children’s Hospital project, the committee is clearly worried that a similar ballooning of costs for the NBP could occur without measures being introduced to prevent this.

Committee chairman Sean Fleming added: “The potential for a further reduction in the number of premises in the intervention zone of the National Broadband Plan still exists. The Committee recommends that the Department of Communications seeks confirmation that the current plan meets, and will continue to meet, EU State-Aid rules and makes any changes necessary to avoid future increases in cost.”

In Association with

The procurement process for the NBP was officially launched on 22 December 2015. Five bidders submitted in March 2016 and of these, three qualified. Two submitted detailed solutions in September 2017 and a further invitation was issued to submit refined detailed solutions. 

Only one bidder submitted a refined detail solution in and the final tender was submitted on 18 September 2018. The assessment of the final tender was on-going at the time of the Committee’s meeting with the Department in March 2019.

Following the completion of that assessment, the government approved the appointment of Granahan McCourt as “preferred bidder” on 7 May. 

The committee report highlights concerns expressed by the Department of Public Expenditure and Reform about the process. Last April, the secretary general of the department, in a letter to the Department of Communications, listed these concerns as relating to:

• Cost and affordability
• Impact on the National Development Plan and on projects foregone as a result
• Value for money and, specifically, uncertain benefits
• Unprecedented risk for the Exchequer
• Compatibility with the spatial objectives of Project Ireland 2040.

The committee was also perturbed by other aspects of the NBP process. Members raised concerns regarding the ownership structure of the NBP broadband network itself. 

The preferred bidder, Granahan McCourt, has incorporated a new Irish company, National Broadband Ireland, to deliver the NBP. NBI will be supported by a number of international sub-contractors. The contract to NBI will be to build, operate and maintain the network and services over a 25 year period, with a commitment to provide services for a further 10 years. NBI will own the new infrastructure that it builds for the NBP. 

However, the committee points out that only a small amount of infrastructure used for the NBP will be new infrastructure, and says: 

“It is not clear how much of the broadband network in the National Broadband Plan will be owned by the successful bidder. The Committee recommends that the Department of Communications, Climate Action and Environment clarifies what portion of the network developed for the National Broadband Plan will be owned by the successful bidder when the contract has expired. 

“The Committee also recommends that the Department ensures that the company awarded the contract is registered and tax compliant in an EU member state.”