Creed on NBP: ‘€2.4 billion of cost will have to be met by NBI’

Minister for Agriculture, Food and the Marine Michael Creed has confirmed this morning, May 13, 2019, that the overall estimated cost for the National Broadband Plan (NBP) will be €5 billion over 25 years.

The minster’s comments come in the aftermath of an interview he gave to Clare FM last week in which he indicated that the state would provide a substantial subsidy to the consortium led by Granahan McCourt Capital which will establish a new entity – National Broadband Ireland (NBI).

He also pointed to the fact that the company would invest a mere €200 million in the project. However, in a statement to AgriLand this morning the minister said that NBI will be expected to contribute €2.4 billion to the project.

Minister Creed also said the “maximum possible cost” to the state overall will be €3 billion over 25 years, including VAT and contingency which, he added, “will be strictly overseen”.     

“State contribution to the total cost of €5 billion is therefore a maximum of €2.6 billion, i.e. ex VAT, as the VAT is paid back to the state and not to NBI towards cost of the project,” he continued.

“The remaining €2.4 billion cost will have to be met by NBI. This cost will be met by investment by the company as well as commercial revenues the company receives over the 25-year period.”

‘Funding the operation’

Minister Creed went on to say that subsidy will not be paid to NBI until “houses are actually passed and connected”.

“The contract will have a comprehensive set of protections and legally binding obligations set as well as a suite of key performance indicators to ensure the service is maintained appropriately,” he added.

“NBI will be obliged to continue to operate the network for 10 years after the contract ends and NBI will fund the operation, maintenance and any reinvestment in the network with no funding from the state.”

Meanwhile, controversy arose on May 8 last when Minister Creed told Clare FM that the state would provide a subsidy to Grant & McCourt who, he added, “were putting in something shy of €200 million into the NBP”.

He also alluded to the fact that this was an area “where no commercial operator wants to go”.

On the same day, Minister for Communications, Climate Action and Environment Richard Bruton said the investment in the project was “a private matter for the company”.

“The Government will not be footing anything more than half of the bill. On the overall and over the 25-year period, spending on this will include less than 50% by the state and more than 50% by the investors and those who subscribe to the messages they deliver,” he concluded.