High speed digital connectivity is an essential part of Scotland's 21st Century infrastructure - an enabler of both economic and community benefits. Superfast, or Next Generation Broadband (NGB) will aid the sustainability and growth of fragile communities, not least by improving remote delivery of public services. It will also enable new forms of remote working, remote education opportunities and lifestyle choice in rural communities.
HIE, with support from regional partners, is committed to delivering NGB to all parts of the Highlands and Islands. This project is designed to lay the foundations to meet the Scottish Government's target of world-class NGB by 2020, and delivering a significant first step towards the 2015 target of providing 85-90% of premises in Scotland with 40-80Mbps broadband and the rest with 2Mbps or better.
This is a truly transformational project for the Highlands and Islands, securing the delivery of a step change in connectivity across a large, sparsely populated region which the commercial market will not service unaided. NGB in the Highlands and Islands will make a real contribution to Scotland's prosperity and avert the risk of a rural-urban digital divide.
Our project covers all seven local authority areas in the Highlands and Islands - Argyll and Bute, Eilean Siar, Highland, Moray, part of North Ayrshire (Arran and the Cumbraes), Orkney, and Shetland.
In June 2011, when HIE formally launched a procurement to appoint a suitably experienced partner to co-invest in the provision of Next Generation Broadband (NGB) services throughout the region we indicated that total project costs were estimated at between £200m and £300m. This figure was based on information gathered during HIE's consultations with industry, and more recent independent modelling by consultants, Atkins, has confirmed costs within this range.
The rollout of NGB services will be delivered in phases and is expected to begin in 2013. HIE provided an indicative list of 50 settlements and the following milestones to suppliers as a potential rollout plan for the region. However the final rollout phases will not be confirmed until after a contract has been signed:
Following evaluation of the pre-qualification questionnaires, the following candidates (in alphabetical order) were invited to participate in the dialogue phase of the procurement:
In November 2011, following evaluation of outline solutions, British Telecommunications PLC and Commendium Ltd were invited to go forward to the next phase, known as Competitive Dialogue. In January 2012, HIE announced that British Telecommunications PLC was the sole remaining bidder.
In June 2012, the Scottish Government announced an allocation of £120m for the project, made up of funds from the Scottish Government, Broadband Delivery UK and HIE.
The project is one of the largest and most ambitious of its kind in the UK, aiming to provide a core fibre network which is the fundamental foundation for rollout of NGB. The first phase, covering the period to 2015, aims to deliver rollout in all local authority areas in the Highlands and Islands, and is on track to begin in 2013.
HIE had initially hoped to conclude a contract with BT in August 2012. However, the competitive dialogue process for such a complex project is taking slightly longer than envisaged. We now expect to have an agreement before the end of 2012.