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Donal Palcic @DonalPalcic
, 11 tweets, 3 min read Read on Twitter
If the government does decide to proceed with the current procurement process for the National Broadband Plan after publishing the Smyth report it is almost impossible to see how value for money can be ensured for the taxpayer #NBP 1/
Anyone who reads the ownership report published by KPMG which set out the various ownership options for the NBP prior to the current tender can see that the entire rationale for adopting a gap funding approach was based on their being strong competition for the contract /2
One of the key assumptions in the report underpinning the recommendation to proceed with a gap funding model is that placing long-term ownership of the network with the private sector would allow bidders to "leverage the use of their existing infrastructure" 3/
The second key assumption is that bidders with existing network assets that they can leverage will place a "strategic value" on winning the contract which would lead to a "competitive tender process" that would "drive down the amount of subsidy required from government" 4/
Regardless of what the Smyth report finds, the rationale for proceeding with a gap funding model has been undermined ever since Siro and Eir (the only two bidders with substantial assets that they could leverage) withdrew their bids 5/
It is impossible to see how a lower subsidy can be guaranteed when there is no competitive pressure left in the tendering process and the sole remaining bidder has no national network infrastructure that it can leverage to roll out fibre in the most cost efficient manner 6/
The KPMG report highlights the importance of competition to the use of the gap funding model throughout its report. The only case study of another country that adopted a gap funding model for delivering broadband identified in their report was in the UK 7/
They highlight how one of the principal criticisms of the UK's rural broadband programme was the fact that there was only one company actively bidding for contracts 8/
Given all of the above, I simply cannot see how value for money for the taxpayer can be generated. We will simply end up paying higher subsidies to a private sector firm that will then own the asset in the future 9/
The government needs to learn the lessons from the past. Transferring full control over our fixed-line telecoms network to the private sector has led to the situation we are in today 10/
Paying taxpayers' money to the private sector to build a rural broadband network that they then own will only lead to further loss of control over the future direction of the telecoms network and more problems in the future /fin
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