South Yorkshire UK Digital Region Broadband Network at Risk of Closure

A new report from Doncaster Council’s finance wing has warned that the debt-ridden Digital Region (DRL) network, which has made superfast broadband available to 80% of premises in South Yorkshire (England, UK), will need another £15m in public funding to stay afloat or it could be “closed down“.

The £100m+ state aid funded project, which has been gobbling up millions in extra public money for the past few years, has so far failed to attract enough customers to break even and plans to sell the network could now be put at further risk.

In February last month it was revealed that French firm Bouygues Energies and Services (formerly ETDE SA) had been picked as the “preferred bidder” to take over the running of DRL’s business (here), although the contract has yet to be signed.

According to the Yorkshire Post, the latest bail-out is not even “the worst case scenario” and project managers have seriously considered shutting DRL down altogether, although this was deemed to be potentially even more costly than simply giving it away to BYES.

Peter Davies, Mayor of Doncaster, said:

“It is a disaster for Doncaster and South Yorkshire. It is a scheme which nobody in their right mind would have entered into. The council leaders involved thought they were businessmen, but the way the project has gone proves they wouldn’t know how to run a whelk stall.

So far in Doncaster it is £10m down the pan, when we need every penny we can get. Since I was elected in 2009, the project has been like having a nail in your shoe. It is appalling, and I cannot understand why my predecessors entered into this idiotic arrangement.”

On top of this there are growing fears that the EU might demand its original grant of £25m back, which would most likely ruin the deal with BYES. Doncaster Council’s report states that, “these risks need to be resolved before the contract can be signed with BYES“. In short, coughing up another £15m might just be the cheapest solution! Beggars belief.