The preferred bidder for the Government's National Broadband Plan has confirmed that it will invest €220 million in equity and working capital as part of its initial funding of the project.

However, National Broadband Ireland (NBI) says it will be required to meet financial obligations of €2.4 billion in the delivery of the network over 25 years.

In a statement, the company said its contractual and financial obligation include shareholder equity, working capital, performance bonds, operating and revenue risks.

"These are not capped, unlike the State's subsidy - and NBI also assume both construction and commercial revenue risk," it said.

The €220 million will be the "initial capital required to commence Design and Build activities", it added, and will be invested before it receives any subsidies from the Government.

This is a first, minimum spend, it said.

At the weekend it was reported that Minister for Agriculture, Michael Creed, had said on local radio that the company's equity investment would be €200 million.

The Taoiseach, Leo Varadkar, said Opposition parties were focusing in on one aspect of the funding and that was the initial equity and capital of €220m.

He said if the project was successful the company would get its return on that.

However, he said if rollout is delayed and if take up is not as fast as promised then the company would have to put in more equity  - which he said was "the crux of it."

He said the contract has not been signed and there would be hearings and debates on the issue before this happens.

The Taoiseach also appealed to Opposition parties not to rule out supporting the NBP because he said if the contract is not signed it would be back to "square one".

He was responding to Fianna Fáil's Micheál Martin, who said the taxpayer was entitled to know how much the investor was putting into the plan given what he described as the unprecedented risk.

Mr Varadkar also said NBI is bringing money, expertise and sharing the risk to the table with no guaranteed commercial return.

He was responding to Sinn Féin leader Mary Lou McDonald who said that in 2012, the Government gave a commitment that high speed broadband would be delivered to every home and business by 2020.

She said the capacity of the bidder was cast in serious doubt. She said the bidding process failed to deliver a competitive tender.

Ms McDonald asked the Taoiseach if he has absolute confidence in the deal, and asked him to publish the full details of the deal between the State and Granahan McCourt.

The Taoiseach said that if the company does not deliver, the contract protects the State and it will face penalties.

He said that the State only pays the company as the work is done.

The Taoiseach also rejected a call from Labour to establish a State-owned national broadband company which would own the network.  

Labour leader Brendan Howlin said such an agency could ultimately pay a dividend to the taxpayer. 


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Today's statement came ahead of Minister for Communication Richard Bruton's appearance before the Oireachtas Communications committee.

Fianna Fáil has proposed that the committee initiates an investigation into the bidding process behind the NBP.

Fianna Fáil has proposed that the Oireachtas Communications Committee initiates an investigation into the bidding process behind the National Broadband Plan.

The party's communications spokesperson Timmy Dooley said: "I have sought the support of the committee to begin an investigation into the National Broadband Plan and all the aspects of it that still remain outstanding. 

"The committee will meet hopefully later this week to address that proposal."

He said that Fianna Fáil "will be pushing strongly that the committee put together some terms of reference to get to the bottom of what has gone on here". 

Mr Dooley said that it is not just Secretary General of the Department of Public Expenditure, Robert Watt that was concerned about the plan going ahead, "it's an entire team within the department that came to these conclusions".

He argued that there is no commercial impediment, when there is only one bidder, preventing the minister from releasing details of the Granahan McCourt bid. 

Meanwhile, Mr Bruton said that there was "extremely positive" advice from other Government departments in support of the project.

He said that there was a confidential approach taken until the contractor signs contracts at the end as the contractor has to engage with sub-contractors, work out contracts with them, negotiate prices with key elements and that is a key element of this work. 

Mr Bruton said that all of the evaluations were done by independent teams, insulated from the political process, and that these were comprised of experts.

At a Fine Gael parliamentary party meeting, Mr Varadkar said that the company who will be rolling out broadband nationwide brings risk-sharing and expertise to the table. 

Mr Bruton told the meeting that there was division within Fianna Fáil on the issue. 

Other members said Fianna Fáil has at least four different proposals that are not costed, and all would mean the process would be delayed for years and may not happen at all.

Performance bonds will be provided, says NBI

NBI has also said that its shareholders will provide performance bonds that will be connected to delivery milestones in the contract.

"In the event that commercial take-up is lower than expected at any time throughout the 25 years, NBI shareholders will be on risk to provide additional capital - with no return to shareholders on this," it added.

Overrun costs will also be borne by it, the consortium claimed, while its return will always be capped at the level of its initial contribution.

As it is finalising contracts with over 40 contractors, the company said it is not appropriate for commercially sensitive information to be disclosed that could prejudice these negotiations, it said. 

For close to a week now the Government had been asked repeatedly just how much equity Granahan McCourt will initially invest to roll out rural broadband.

The minimum opening investment and working capital of approximately €220m excludes the costs already incurred in the bid. The overall estimated total project cost is around €5bn over 25 years.

The State contribution to the total cost of is a maximum of €2.6bn. The Minister said the private firm is responsible for providing the remaining €2.4bn of cost. 

Speaking today on RTÉ's News at One, Mr Bruton said it's better that the National Broadband Plan can "stand on its own two feet".

He said the Government is providing State aid to build 146,000km of fibre that would not be built by the private sector, and will only get built if the State intervenes.

"We're choosing to do that in the most cost effective way, by using the poles that are owned by the private sector. It's the cheapest and most effective way."

When questioned about the project's ownership in the long run, Mr Bruton said that if the State owned the project, it would have to pay for the upkeep.

Reporting by Aisling Kenny, Mícheál Lehane, Conor McMorrow