French firm chosen to take over ailing £100m broadband scheme

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A massive publicly-owned broadband network which cost Yorkshire councils tens of millions of pounds will be handed over to a French firm in a bid to turn around its ailing fortunes.

Local authority bosses overseeing the embattled South Yorkshire Digital Region project announced they have chosen French construction giant Bouygues to take control of the £100m fibre-optic network, which has been making catastrophic losses for the past three years.

Bouygues beat off a rival bid from BT to win the contract, which is expected to be signed before the end of March.

Council bosses in Sheffield, Rotherham, Doncaster and Barnsley hope the deal will put an end to the multi-million pound bail-outs they have been forced to stump up to keep the project afloat.

A statement from Digital Region said: “The successful bidder will take over the operation of the network, and will have full accountability for all associated revenues and costs.”

Digital Region was a flagship Government-backed scheme introduced in 2009 to make “superfast” internet speeds available to almost every home and business in South Yorkshire.

Funded by an EU grant and tens of millions of pounds in grants and loans from the UK taxpayer, a vast network of publicly-owned fibre cables was laid beneath the streets of South Yorkshire. Customers signing up to the service can receive broadband speeds several times faster than the national average.

However, project managers failed to attract a single major internet firm to sell the service to households – meaning very few people have signed up to use it.

It has also faced fierce competition from BT, which has been rolling out its own rival superfast service over the past few years.

Having cost almost £100m of public funds to install, Digital Region has since required a series of multi-million pound bail-outs from its local authority backers.

Project managers announced last year they were looking for a private firm to take on the costs and liabilities of the project.

“The board were impressed by the high quality of the submissions,” said David Cowell, chief operating officer for Digital Region Ltd (DRL).

“The process is still ongoing, and DRL will continue to negotiate to agree a contract ready for execution in the first quarter of 2013.”