Ministers told €3bn broadband proposal not good value

Ministers have been advised formally that the €3 billion National Broadband Plan, due to be approved by the Cabinet tomorrow, does not represent good value for money.

In advice circulated to all Ministers in advance of the meeting, the Department of Public Expenditure has said the plan benefits are not justified by the cost. The proposal is to install a high-speed broadband connection to half a million homes and businesses not served by commercial operators.

While debate has raged behind closed doors in Government over the broadband plan for months, formal objections raised in the department’s advice – known as “obs” or observations – are highly unusual.

Even more unusually, the department was unable to confirm that the Minister, Paschal Donohoe, supports the its position.

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A spokeswoman repeated Mr Donohoe’s line that he has received much advice and would make his views known when a decision is reached.

Asked specifically if he shared the department’s view, the spokeswoman replied that the Cabinet memo was confidential.

Senior officials, including secretary general Robert Watt, have been warning in private for months about the plan, which would be the largest contract ever awarded by the State.

It is understood they have raised questions about the likely rate of take-up of the service when the fibre optic cables are installed. A low take-up rate would push up the average cost per household to unjustifiable levels, they have warned.

Public relations campaign

But Minister for Communications Richard Bruton has been lobbying colleagues in advance of the Cabinet meeting. And there have been signals from the Taoiseach’s office that it would be politically damaging to cancel the project, say sources.

Once the plan is approved, the Government will embark on a campaign to “sell” the measure. Ministers will compare it to the rural electrification scheme – which brought electricity to all parts of Ireland between the 1940s and the 1970s – and the introduction of free education.

Ministers will also say the scheme is about “equality and fairness and not leaving rural Ireland behind”, say sources.

The contract is likely to be signed by the summer’s end if Ministers sanction a deal with the consortium led by Irish American businessman David McCourt as expected.

However, Ministers will be told that it is not practical to bring fibre connections to every single premises. And that in a small number of locations – probably about 2 per cent of the total – broadband access will be provided by alternative technologies, most likely 5G.

Experts have advised the Department of Communications, however, that wireless 5G technology would not be suitable for any more than a small number of locations.