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Fears of More Broadband Delays in Scotland from Gigaclear’s Lawsuit

Monday, Jun 29th, 2020 (9:24 am) - Score 3,714
scotland r100 broadband lots map uk

At the end of last year the Scottish Government revealed that LOT 1 of their £600m R100 (Reaching 100%) project, which had given BTpreferred bidder” status and was aiming to extend “superfast broadband” (30Mbps+) coverage, had become the subject of a legal challenge by Gigaclear. Sadly the case is now threatening more delays.

Back in October 2019 it was announced that BT (Openreach) had won the contracts for both LOT 2 (Central Scotland) and LOT 3 (South Scotland), which was due in no small part to them being the last bidder standing (here). The award of LOT 1 (Northern Scotland) took a bit longer (here), partly because several suppliers were involved in the bidding (BT, Axione UK and Gigaclear) and additional requirements came attached.

NOTE: The vast majority of LOT 2 and 3 are being delivered using Fibre-to-the-Premises (FTTP) – see here and here for more details.

The LOT 1 area is the largest one (valued c.£384m) and reflects about 100,000 premises around the Highlands and Islands, Angus, Aberdeen and Dundee. The contract also specified 9 mandated areas where 25% of premises must be able to get speeds of at least 100Mbps (on a Gigabit-capable connection).

At present engineers are expected to reach around half of the target premises in LOT 2 and 3 – approximately 23,000 in Central and 12,000 in the South – by the end of 2021, with the majority of the build completed by the end of 2023 (LOT 3 by summer 2024). But until now there’s been very little information about the status of LOT 1 and Gigaclear’s legal challenge.

The good news is that we finally have some solid details via The Herald, but the bad news is more delays are expected. Gigaclear’s lawyer, Mark Lindsay QC, is understood to have argued that Scottish Ministers made a “manifest error” in the procurement process (apparently this relates to the technical issue of bid scoring) and want the court to set aside BT’s award, with the possibility of financial damages as a “secondary remedy“.

Mark Lindsay QC said:

“The state aid cover expires at the end of the year and clearly it’s in the interests of both parties for this action to be resolved before then.”

The reference to state aid cover above reflects the 2016 agreement with the EU (here) and, due to on-going Brexit trade negotiations, nobody is sure how this will be handled come the start of 2021. We have seen before how major projects (e.g. Devon and Somerset) can suffer significant delays if they get caught out by a change in the state aid regime and so they’ll need to get this resolved before 31st December 2020.

Lord Clark said he agreed that the matter should be dealt with “as soon as possible” and gave the two sides 5 weeks to fine tune their cases before a procedural hearing. The ID and title for this case is as follows: CA172/19 Gigaclear Ltd &c v The Scottish Ministers. As is normal neither the Scottish Government, nor Gigaclear, have commented on the case itself.

One difficulty for Gigaclear here is that, between 2018 and 2019, many of their other state aid supported contracts across England suffered significant deployment delays (often running up to 2 years late) due to a string of major problems with resources, planning and management (Devon and Somerset even scrapped their contract with the ISP).

Suffice to say that this would have made it incredibly difficult for the Scottish Government to hand them such a big contract (i.e. the worst possible timing for such an award); politicians are highly risk averse. As a result there’s likely to be little sympathy for Gigaclear in terms of public support, which may sadly overshadow any potentially valid merits of the ISP’s case. All ordinary people will see is this causing yet more delays to the broadband roll-out.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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19 Responses
  1. Avatar photo Desperatelyseekingbroadband says:

    This legal challenge will add a year to the rollout by the time it’s completed
    Gigaclear are not exactly building a good reputation with their potential Scottish clients

  2. Avatar photo John says:

    ” [Gigaclear] want the court to set aside BT’s award, with the possibility of financial damages as a “secondary remedy“. ”

    Greedy barstewards.

    1. Avatar photo joe says:

      How. If you are financially harmed thats a normal remedy.

  3. Avatar photo Graham Long says:

    It achieves nothing to put Gigaclear in the dock here when the CDS contracts with Gigaclear which you refer to were summarily terminated by CDS because Gigaclear were offering 70% adherence to contract schedule were they to have been extended. CDS (and BDUK) did not it appears know that UK civil engineering contracts typically only achieve 66% adherence to schedule. If the Scottish government have failed to score bids correctly then the court needs to decide on that. Your comment “All ordinary people will see is this causing yet more delays to the broadband roll-out.” suggests that you have decided who is at fault and that is beneath you.

    1. Avatar photo Gadget says:

      can I ask – is the adherence figure quoted for all civil project across the industry or just those involving telecoms build?

    2. Avatar photo 125us says:

      What’s the average adherence rate across publicly funded broadband rollouts in the UK? What’s the relative performance of those who have won and carried out bids?

    3. Avatar photo AnotherTim says:

      “Gigaclear were offering 70% adherence to contract schedule” – what Gigaclear offer is quite different to what Gigaclear actually achieve.

    4. Mark-Jackson Mark Jackson says:

      @Graham. I’m ultimately just reflecting what we’ve seen. Gigaclear suffered significant problems and massive delays with BDUK contracts under their previous management, which they’ve widely acknowledged and is well documented.

      I personally agree that, in the particular case of CDS, they might have been better sticking it out with Gigaclear, but that’s not to excuse what happened (i.e. it’s more a case that the delays may now be even longer by scrapping the contract so late on).

      However, in the wider context of how all that was perceived, if you were a different public authority (i.e. Scotland) considering at the same time whether or not to award a contract to Gigaclear, then it would have been incredibly difficult to do that without huge political criticism.

      So my point, which I thought was made clearly enough, is that sadly the merits of Gigaclear’s argument may not matter in the wider court of public opinion. The operator’s reputation was tarnished and they are slowly rebuilding that, but all most people in that part of the country will see is yet more delays to their hopes of broadband delivery.

    5. Avatar photo The Facts says:

      ‘70% adherence to contract schedule’ So about 1/3 of the project fails. Or is it 30% of projects fail.

      @GL’s obsessive support for Gigaclear suggests he has some financial involvement.

    6. Avatar photo A_Builder says:

      I have no idea of how this tender was set up and I am not an expert on Scottish Law applied to construction contracts.

      So these are general points.

      A public tender is decided on the narrow merits of the tender specifications.

      It isn’t open to the procuring body to consider past conduct unless there is a previous procurement scoring exercise in place – usually a pre qualification exercise or PQQ or a Contact delivery risk assessment.

      That being said it would be absolutely in order for the awarding authority to ask for such previous experience to be listed out in the PQQ.

      The mystery is why they ever got past a PQQ exercise at all – assuming there was one. With their track record for non delivery they should not have been considered.

      What I **suspect** did happen was that there was a PQQ but the results of it were set aside to let Giga into the next round as there were not enough credible tenderers. And if the one party in play knows they are tendering solo – prices tend to go upwards…..

      I also **suspect** that Giga are hoping that the Scottish Government will throw them some money to go away so they can get on with actually installing some FTTP around the place.

      “the possibility of financial damages as a “secondary remedy“

      then combined with back against the wall running out of road

      “The state aid cover expires at the end of the year and clearly it’s in the interests of both parties for this action to be resolved before then.”

      So this smells like a shake down exercise to me.

      Giga might find that the next set of public tenders have PQQ’s constructed so as to exclude them on a previous performance basis…..

      Medium sized companies always do well to remember that Governments and Local Authorities will always be there and tend to have long institutional memories of people who play games with them.

    7. Avatar photo Fastman says:

      BDUk is all about the milestones and they are one after the other – you only get paid against the milestones you dont meet the milestones and and you don’t get paid , every month you dont meet them the worse it gets as far as i understand

      the old adage careful what you wish for as you might just get it and it migth not be what you thought it was when it arrives (or not as the case may be !!!!)

  4. Avatar photo Jonathan says:

    The qualification assesment can be rolled into the main procurement process, and previous failures can most definitely be taken into account. Further the failure of the CDS after a PQQ could be used to negate that they previously passed. They also have to pass at the time of contract award.

  5. Avatar photo Ryan says:

    This is nothing more from Gigaclear than a compensation chase, which is totally understandable as any company must seek compensation where it believes it is due. The Scottish Government must quickly investigate this and put any errors behind them.

    Gigaclear could never manage the sheer scale of the highlands and islands, and this is hurting our futures of being anyway competitive with the rest of the country. We are already 10 years behind the central belt as is!

    The Public Sector never suffers however, they are allowed to use the swan network to all there own premises, however no discounted rates to install fibre into Highland Businesses or any scheme’s to aid the high costs of rural leased lines. We can only pray for a return of one web at this rate.

  6. Avatar photo Gary says:

    Cancel the Northern Lot tender process entirely, Keep the money in the SGov coffers until the proposed UK Gov fibre plans reveal how much is going to Scotland then add the Northern lot funds to it and FTTP LOT 1 unaddressed under R100 as a priority.

    Meanwhile anyone on a dire connection applies for USO connection upgrade.

    Did i miss anything ?

    1. Avatar photo Gary says:

      Or how about a statement from Sgov ‘We’re the government Our money our decision, Bye Gigaclear, crack on Openreach’

      And before anyone states the Government has to follow the rules, Well not really they don’t They make them and they change them at will

    2. Avatar photo Gordon MacCormick says:

      I don’t think a USO connection will be within reach of most people with dire connections. I’ve just been quoted £431,349.00 for my USO upgrade.

    3. Avatar photo Gary says:

      Gordon !!! wow, do you get a breakdown or indictor of whats costing so much or just a Number.

  7. Avatar photo Gordon MacCormick says:

    No breakdown yet. I have asked for more detail, and they said that they would ask OR and get back to me, but my understanding is that any details given, will be in the form of percentages for cabling, engineering, etc. and no details will be given about what is involved in the actual build, or how the figure was arrived at.

    1. Avatar photo gary says:

      I wonder what you would be getting for that money, last i saw a CELL site came in at 150 to 250K ballpark. Naturally variable depending on a ton of reasons.

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