Donohoe insists broadband won’t go way of national children’s hospital

Minister for Finance Paschal Donohoe has promised to keep a tight rein on costs when it comes to delivering the National Broadband Plan, insisting there would be no repeat of national children's hospital debacle.

He said the plan to bring high-speed broadband to 540,000 households across the country, now seven years in the planning, would be delivered on “the basis of the tendered cost”.

His comments come after it emerged the Government plans to approve the project despite the advice of some senior officials who cautioned that the € 3 billion programme did not represent good value for money.

Mr Donohoe acknowledged that mistakes were made in relation to the procurement of the national children’s hospital and that lessons have been learnt.

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“In other words, that which we could have done better, in relation to the national children’s hospital and I have acknowledged what that is, we are now looking to do in relation to the National Broadband Plan,” he told RTE’s Morning Ireland radio programme.

However, the broadband process predates the hospital one and with only one bidder left in what was supposed to be a competitive tender process, the Government’s bargaining power is severely hamstrung.

Mr Donohoe said the Government would consider all of the advice before making a final decision on the plan. The cost of the project was originally estimated at up to €1 billion with the Government stumping up half. This has now been revised to €3 billion, however.

“The reason for the difference in cost is because we are now looking to cover more people, ensure more schools, more businesses. more farms have access to public services and their ability to participate and create more employment,” Mr Donohoe said.

“When Government makes a decision in relation to this what we will be doing is making a decision on number one, the basis of the tendered cost, and number two on the basis of going through the contingencies, the risks and the complexities and looking at what the potential cost of that could be in the future,” he said.

After several months of vetting the final bid from US investment firm Granahan McCourt, the Government is expected to approve the tender despite the likely backlash over costs, especially in the context of recent revelations of escalating costs at the national children’s hospital.

However, ministers and senior officials fear shelving the project or even recommencing it with an eye to reducing costs could cause an even bigger politcal controversy in advance of the local and European elections next month.