Naughten raises prospect of ‘plan B’ after Eir’s exit from broadband process

Minister for Communications Denis Naughten has, for the first time, raised the prospect of pursuing an alternative plan to bring high-speed broadband to rural Ireland following Eir's sudden and unexpected departure from the procurement process.

Eir’s decision to pull out, leaving just one bidder in the race, has thrown the National Broadband Plan (NBP) into disarray, with the Government being accused by Opposition parties and rural bodies of presiding over a failure and leaving more than 540,000 households and businesses in limbo.

Minister Naughten insisted the Government has not been put in a difficult position by Eir’s withdrawal and that the plan, which aims to equip 542,000 homes and premises with high-speed connectivity, would be delivered on time and at no extra cost to the taxpayer.

Nonetheless, he and his officials raised the prospect of a "plan B" should the Government and the sole remaining bidder – the consortium led by energy group SSE and telecoms firm Enet – fail to agree a price.

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While this is not thought to involve a different broadband scheme, it may consist of an alternative tender process.

Minister Naughten attempted to play down concerns that the lack of competition may lead to an increase in price for the taxpayer.

“We have a good idea, based on the costings that have come in, what the ballpark figures are in relation to this,” he said.

“It’s not a case that, in relation to pricing, we’re over a barrel by any manner of means, and it’s in the interests of the company that it actually builds out this network quickly, because you have wireless operators, as well as some fixed-line operators, that may decide to compete with them,” Minister Naughten said.

Fresh doubts

Nonetheless, Eir’s departure represents a major blow to the Government’s long-running process and raises fresh doubts about the delivery of the State’s biggest communications infrastructural project in decades.

In a statement announcing its decision to exit the process 18 months after it was first shortlisted as a bidder, Eir said the risks associated with staying in the process had become too great.

“Based upon the significant commercial issues and complexity within the tender process, together with growing uncertainty on a range of regulatory and pricing issues that reside outside of the NBP process, the company’s board has decided that the risks are too great for its continued participation in the NBP,” the former semi-state said.

The Enet-SSE consortium said it was strongly committed to the Government’s plan and was in the process of finalising its bid for the contract.

Sinn Féin communications spokesman Brian Stanley, however, said that with only one bidder now in the tender, down from three last year, the whole process is now in tatters.

“This now means that the privatisation option has proven flawed. We warned Government consistently of the flaws in the whole procurement system,” he said.