State will not face higher bill for broadband plan despite Covid delays, committee hears

The company building the State’s new high-speed rural broadband network will not be penalised by the Government for major delays caused by the Covid-19 pandemic, but says it will face extra costs as a result of the disruption.

Speaking before an Oireachtas committee on Wednesday, National Broadband Ireland (NBI) executives said the State's bill for the project will not go above €2.6 billion, and that it is working to recover ground lost during the pandemic, and possibly even deliver the project ahead of expectations.

A revised set of delivery dates will be given to the Government within the next week, NBI chief executive Peter Hendrick told the Oireachtas communications committee.

Fielding numerous questions focused on the delays that have occurred amid the pandemic, Mr Hendrick said NBI will bring fibre-optic cable by 60,000 houses and businesses this year, not the 115,000 originally promised.

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NBI will not be penalised for the delays because Covid-19 was “outside of our control”, he said, adding that it does increase the cost for the company: “We also suffer the loss of revenue . . . I would say the cost on NBI is quite significant.”

Pressed by committee chairman and Fine Gael TD Kieran O'Donnell, Mr Hendrick insisted that the delays will not increase the State's cost, while shareholders will bear all the risks if the take-up of the broadband service is lower than expected.

"I can confirm that there is no downside [for the State]," he said. "The number is capped; the subsidy profile is capped; it's been approved by the European Commission at a state aid level.

“The contract in itself has many protections and legal binding obligations that fall on NBI to deliver the project, one of which is that we don’t get any more subsidy.”

Any material gains in terms of material or labour cost reductions also go back to the State, the committee was told.

Renewed plan

Considerable concern was expressed among the committee regarding the delays brought about by the pandemic. NBI, however, is due to publish a renewed plan for the project soon which will outline how it expects to counter these setbacks. TJ Malone, who heads up the team building the NBI network, said it was now about six months behind schedule.

“Our whole purpose has been now to try and make sure that we can get that back on track, to recover that ground,” he said.

“Next year gets us back onto the run rate and from the end of 2022/2023 onwards we then start to eat into that gap and pull it back . . . but extremely confident on the seven years [targeted for delivery of the plan] and [we are] working to see exactly how much we can knock off that plan.”

Despite the “unprecedented disruption” described by the company, progress is being made.

It said that construction is now active across all 26 counties, with more than 1,000 people hired. More than 370 broadband connection points, including in schools, have been installed and a network of more than 900 “strategic connection points” for community use is due by the end of 2023.