Public Accounts Committee and BT

A little reading from The Register.

It was an inflammatory and political session, indeed I saw a couple of posters on this forum defending BT's position via social media but it does raise a couple of questions.

BT claim to be spending about 2,500,000,000 reaching 66% of the UK's homes and businesses.

BDUK is to add another 24% to that to take the total to 90%. Now, according to BT their total spend for that 24% is going to be 700,000,000, and according to the National Audit Office their CapEx is going to be around the 360,000,000 mark.

Is it just me or is BDUK failing as a 'gap funding' model if BT are actually going to be spending less per home passed, and noticeably less at that, than on their commercial rollout?

What you also need to consider is that within the £2.5Bn there is the investment in the exchanges and other overheads which needs to be taken out before a comparison can be made.

But its simple a cabinet costs £29k it was said today so must be true

In reply to a post by Ignitionnet:

Is it just me or is BDUK failing as a 'gap funding' model if BT are actually going to be spending less per home passed, and noticeably less at that, than on their commercial rollout?

Surely the whole point of BDUK is precisely that? The areas involved are not viable at the normal BT spend per property passed, so it would be a nonsense if the BDUK ones cost BT more than the commercially viable ones, or anything approaching it.

There are clear indication though of BT over charging. The BDUK cabinet costs are coming in 12.5% higher than those they charged in NI

Their project management costs are coming in at over double those in NI

The programme is over 2 years late and the BT contribution has dropped from 36% to 23%

There were initially 9 bidders of which all eight competitors dropped out., A clear indication of a lack of a level playing field

In a normal business environment you would but such large contracts with 2 suppliers. This is to de risk the project and to bench mark the suppliers

Typically about 70% would go to the cheapest and 30% to the next cheapest. The exact mix would depend on a number of actors including actual cost difference between the two bids

NAO expect the 95% target to be hit 22 months after original, but the 90% is May 2016 12 months late

There was the suggestion of restarting the process to get more bidders on board and use lessons learnt, would that be a popular move?

It may not be popular but the sort of information being established does indicate that there have been serious failing with the bidding process and the contracts and there are issues with the BT costs

If these things are proven there may be no choice in that contracts may have to be re bid

It's supposed to be a gap funding model, Bob. Google gap funding.

I'm not sure I understand why any investment in the commercial rollout should be taken out before comparison?

Could you explain why the investment in exchanges and 'other overheads' should be excluded? Surely if excluding these costs the BT commercial project should either have cost less or covered more than the planned coverage level?

In reply to a post by MrSaffron:

But its simple a cabinet costs £29k it was said today so must be true

Thank you for this extremely constructive addition to the thread.

Now if you could take a minute, Dr Broadband, to discuss the actual subject matter given the figures all come from BT, not the PAC, that'd be great.

Thanks.