Friday, July 11, 2014

News: BT set to work on South Yorkshire Broadband project


BT has had its tender accepted to work with local authorities on a £20m project that aims to achieve 95% superfast broadband coverage in South Yorkshire by 2017, just as the plug is pulled on the "deeply flawed" Digital Region project.

Consultation has taken place on a "Superfast broadband project to deliver improved broadband infrastructure to areas where it is acknowledged that the market is unlikely to deliver Superfast broadband and will likely remain so until 2017."

Partners - the four local authorities and the Sheffield City Region Local Enterprise Partnership - believe that broadband connectivity is essential for building a strong and competitive economy resulting in economic growth and creating more and better jobs.

Rotherham Council's cabinet has now agreed to accept the tender response from BT and for the project to move to the contract and delivery phase.

The move was expected given that Fujitsu, the only other company allowed to bid for the project, pulled out of the running in 2013. BT was one of two companies in the running to take over the Digital Region project before the tender process was halted.

Rotherham Council has also agreed to underwrite the required local funding contribution of £1.596m in order to allow a contract to be signed with BT in August 2014.

The plan has been approved by BDUK, the government project with the goal of delivering a fibre point in every community in the UK by the end of 2015.

The BDUK Framework is based on a gap funded subsidy approach, where the private sector invests alongside a public subsidy to provide broadband to areas where there is not otherwise a viable commercial market. £830m of public funding has been set aside to complete this "final third" and BDUK had originally ruled out funding South Yorkshire due to the Digital Region project that had similar aims.

A bid to the Sheffield city region investment fund for strategic infrastructure investment (SCRIF) is being finalised to bring together the public finance required. Total funding expected to deliver the project is currently estimated to be in the range of £15m to £20m.

Rotherham Council is also contributing a contingency budget of £124,000 and £112,500 of revenue funding over three years to fund the creation of a programme management team. The team would be employed by Barnsley Council.

Last year, the Minister of State for Business and Enterprise, Michael Fallon, described the previous Digital Region project as "deeply flawed" as it had failed to attract customers.

The project was financed by contributions from local authorities and included £30m from the European Regional Development Fund (ERDF). It was wholly owned by the now defunct Yorkshire Forward and the four local authorities of South Yorkshire.

It was also revealed that the government would have to provide at least 45% of the funding to cover a significant proportion of the repayment of the ERDF grant which has to be paid back to Brussels, because the original conditions were not fulfilled. It will also pay a proportion of the contract due to the original operator, Thales.

The aim of the Digital Region project was to bring continuous 25mb+ broadband to over 97% of South Yorkshire, including 550,000 homes and 1.3 million people. Work on installing the network started in 2009, and by 2012, completion of phase one of the project saw 80% of homes and businesses within South Yorkshire able to be linked to the network.

With only 3,000 customers, the remaining shareholders agreed to halt their search for a private sector partner and begin a managed closure of the fibre optic network. It is expected to be decommissioned by August 2014.

BDUK website

Images: BT Openreach


Anonymous,  July 11, 2014 at 4:32 PM  

Why not buy up the DR equipment, this will save both money and time.

Tom,  July 11, 2014 at 5:16 PM  

This project is for the 20% not yet covered. It's still not clear what will happen to the DR infrastructure that covers 80% of the region.

Alex Atkin July 12, 2014 at 8:11 PM  

Nothing can happen to the DR equipment until the company is shut down, without taking on its debt.

Its also been theorised that they used a different kind of fibre to BTs equipment so they couldn't just buy it and immediately use it without replacing a lot of infrastructure. In which case BT may as well just install their own from scratch as they can just pull the fibre through their existing phone line conduits anyway.

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