Explaining cost escalation on Ireland's national broadband plan

In August 2012, the Irish government published a National Broadband Plan (NBP) which set a target of a minimum 30 Mbps download speed for all households in the country. The expected overall cost of the original plan was €350 million, with the government stating that it would contribute half of this amount along with the private sector. By 2020, these ambitious targets had not been met. After a protracted and controversial procurement process, the cost of government subsidy for the NBP had escalated to between €2.2bn and €2.9bn and the plan will not be completed until at least 2026. This paper provides an in-depth examination of the various factors that have contributed to the escalation of the costs and the failure to roll out the NBP in a timely, cost-efficient manner. We identified key factors which led to the NBP's delays and price escalation; First, the decision by the government to proceed with a fiber to the premises solution for the intervention area had significant cost implications given Ireland's low population density in rural areas. Second, the procurement model adopted to deliver the NBP assumed a high degree of competition for the contract which proved unrealistic given two of the three shortlisted bidders for the contract exited the procurement process and the remaining bidder faced no competitive tension when negotiating the final bid.