Howlin questions FG competence on NBP and economic management

27 April 2019

In response to reports on the national broadband plan, Labour Party Leader and former Minister for Public Expenditure, Brendan Howlin TD, accused the Government of abandoning the spending controls that were painstakingly built up after the economic crash in 2008.

Brendan said: “Labour ministers oversaw the initial development of the national broadband plan, and we have detailed knowledge on what is possible. At €3 billion, the current proposal is six times higher than the original estimate. There is nothing ordinary or inevitable about this kind of massive increase in cost. On the contrary, something has gone badly wrong for the taxpayer to be facing such a huge cost, especially as the number of homes to be connected is far fewer than when the original cost estimates were prepared as former Minister Naughten allowed Eir to remove 300,000 homes from the plan.

“With an estimated 542,000 homes, at a cost of €3 billion, that implies an investment of over €5,500 for every home to be connected. The Government needs to publish far more information to clarify the numbers involved, and to confirm its assumptions about the average cost to connect homes to the broadband network.

“The Government also needs to explain the future ownership of the network. It is outrageous to suggest that people would be asked to make this level of investment and not own the asset at the end of the process. Ownership of the network should allow a State operator to pay back a part of the investment cost over time.

“The idea that the cost is somehow less because it is spread over up to 30 years is a dangerously misleading argument. €100 million per year is still a large sum of money in Irish public spending. There are many other areas of public service – especially health services – that badly need this scale of investment. The Government needs to be transparent about the opportunity cost involved: what major public investments will not be possible or will be delayed in the coming three decades because of this costly decision? This expensive decision will bind the hands of multiple future governments.

“Following the ballooning costs in the National Children’s Hospital, this is the second time that Fine Gael have lost control of the price of a major investment project. What is more worrying are reports that the Government has received advice from senior officials to not proceed because this project will not deliver value for money. We need to see the basis of that advice published. The Government seems to be weighing the short-term political benefit of winning seats at the local election over the long-term financial stability of our country. We hoped that that kind of politics ended after 2008.

“People in rural Ireland should not be fooled by Fine Gael on this issue. A State-led, direct provision of rural broadband infrastructure is permitted under EU rules and could deliver broadband Internet for far less than €5,500 per home. And any State-led investment through a commercial semi-state company would make profit over time that would be returned to the people as a dividend, just like the annual payments from ESB to the public finances. It is not too late for Government ministers to do the right thing at their upcoming meeting and to refuse to endorse this reckless expenditure.”

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