CDS continues to withhold payments to Gigaclear over full fibre uncertainty
The Connecting Devon and Somerset was seen a turning point in the full fibre vision for the United Kingdom but with only £537,200 paid out by the local authorities involved so far and uncertain delays it is turning into a vision of a nightmare for those locally who are waiting on gettting better broadband.
For those not aware of the history the shortened version is BT delivered the phase one contract using mainly VDSL2 and some FTTP where the value for money criteria allowed to more than 300,000 premises (our figures indicate it was 322,000 premises of superfast broadband - including around 10,000 premises via FTTP). The phase II contract did not go to BT and there was a long period of battling and ironically it fell apart from BT not being able to committ to 95% superfast coverage by the end of 2017 or any assurances on reaching it by 2021/2022. Two years later to in July 2017 the contract for 5 out of 6 lots was awarded to Gigaclear who were going to build a purely full fibre network to 41,000 premises and would also build a commercial network.
So now after various delays and people wondering when the network was going to be appear we are at the position of lots of talking and reassurances but still very little progress in terms of reaching the 41,000 premises target for the gap funded roll-out. An update from CDS and Gigaclear that is six pages long gives a lot more detail and for those affected is a must read.
The point where things went really wrong was the Carrillion telent collapse as the contract had been devolved to this contractor. Additional problems arose from sub contractors and the lack of verges in some areas where the contract stipulated coverage should be - the end result the Gigaclear method of reducing costs by soft digging was replaced by slower and more expensive digs down roads.
In effect, Gigaclear was now attempting to run its biggest single contract remotely from Abingdon and the company was slow to recognise that the collapse of the Carillion telent joint venture would require a fundamental change to its approach.
For its part, CDS was struggling to get a definitive picture of what was happening within Gigaclear and with its changing guard of programme directors, contractors and sub-contractors. Senior directors from the company including the then owner assured CDS repeatedly that most of its roll-out would be delivered by the end of 2019 and the expanded programme completed by the summer of 2020 as planned.
Takeover by Infracapital
The first sign of potential improvement came in May 2018, when Gigaclear was bought up by one of its main investors, Infracapital, the London-based infrastructure investment specialist. Part of M&G Prudential, which has total assets under management of £351 billion, Infracapital has a mandate to invest in highspeed digital infrastructure in the UK after the Government appointed the company to manage a portion of its Digital Infrastructure Investment Fund.
The takeover of Gigaclear was, in part, prompted by Infracapital being equally disappointed with its performance and that by taking control they could re-focus the company. New leadership was brought in, and additional investment was confirmed by Infracapital to support accelerated deployment in the CDS region. At the same time, the new owners started a root and branch review of each contract, build methodology, management and capacity.Extract from CDS/Gigaclear statement
So where do things stand today, well Gigaclear now has a dedicated office in Taunton comprising some 40 staff and more being recruited but things such as lack of contractor capacity are something that may still cause problems and actually those in control in Westminster and elsewhere will need to address given the wider UK full fibre ambitions. A perfect storm is approaching for contractors in that they may have multiple firms wanting to book them which will lead to an opportunity to increase their rates and uncertainty over Brexit and the ability to use overseas workers under new Visa rules are likely to not just be a problem in Devon and Somerset but across the UK.
Gigaclear remains committed to an investment of £127.8 million in the region with 47,810 premises of full fibre via the CDS contracts and a commercially funded network of 43,000 premises. The timeline is such that 40 to 50% of the contracted promises (so around 19,000 to 24,000 premises) by June 2020 and the balance by June 2022.
The detail of which premises will be done by what dates are still being waited on
A footnote is that the BT Phase One contract has made available some £4.7 million for reinvestment and at the request of CDS BT is apparently modelling what it can deliver for areas not covered by current publicly subsidised or commercial plans. News on what this will comprise is expected in the New Year. £4.7 million if you assume £1,500 per premises could deliver another 3,100 premises of full fibre but if more commercial money was added the coverage levels could be higher.
On our part we look forward to the time when we can start regularly updating the Gigaclear coverage footprint and talk of new areas where people can be seen to taking up the service evidenced by speed tests.