Whitewash: Report On Broadband Is A Cover Up

81

The report into the activities of the former Minister, Denis Naughton, on rural broadband is a total whitewash.

Naughton held eighteen meetings, and five dinners with representatives of Granahan McCourt. Minutes of these meetings were not kept and there were often no civil servants present. Yet the company was a bidder for the lucrative broadband contract.

But aside from Naughton’s unusual behaviour, there is an even bigger scandal looming.

Rural broadband was originally supposed to cost some hundreds of millions. But the latest estimate puts that figure at a staggering €3 billion.

Once again privatisation means huge costs for Irish taxpayers.

Up to 1999, the telephone network was run by a state company, Telecom Eireann. But the Fianna Fail government decided to copy Margaret Thatcher and sell it off. Ever since then, disaster has piled on disaster.

Instead of providing long term investment to install broad band, a series of private owners simply asset stripped the company, which had been re-named Eircom.

By October 2010, for example, Ireland was ranked 29 out of 30 countries, ahead only of Mexico for broadband speed. Only a fifth of the population had access on that date.

Yet this disaster presented another opportunity for private companies to further blackmail the government.

One of the first companies to bid for contracts was Enet, a small company based in Michael Noonan’s Limerick constituency but backed by Granahan McCourt.

It won an original contract to bring broadband to 94 towns but after a meeting with Fine Gael Minister, Michael Noonan, this contract was extended without any tender being issued. The extension pushed up the value of Enet and then, lo and bold, the state controlled Irish Investment Fund bought a major stake in the company for approximately €150 million.

On one hand, a state decision to extend a contract increased the price that another arm of state paid for a share in a private firm. You could not make it up!

Then, mysteriously, the Irish Investment Fund bought the remaining share of Enet for an undisclosed sum.

Meanwhile in a move that is not unknown among multi-nationals who bid for state contracts, two other consortiums pulled out of a bid to install rural broadband.

That left behind David McCourt, the founder and chairman of McGranahan McCourt, the company from which the state’s Investment Fund had bought shares in Enet.

As the last bidder, McCourt has the state over a barrel – or more precisely he looked on as the state threw itself over that barrel.

And in  a final twist of fate, McCourt quietly announced that the make-up of his own consortium had changed.

The main supplier of the physical infrastructure would now be a new company, Actavo owned by none other than Denis O Brien.

Actavo used to be known as Siteserv and faced considerable criticism over how it won contracts to install Irish water meters.

But here it is again, standing at the ready to take its slice of another lucrative state contract – after many mysterious moves.

Only in Ireland, as they say!