The construction of the first publicly funded telecoms network in the Republic since Eircom floated in 1999 began yesterday at a cost to taxpayers of €11 million.

The Cork fibre network is the first and largest of 19 projects to ring cities and towns with a broadband communications network capable of providing high-speed internet access at low cost.

The total cost of the construction project is €65 million, with the Government providing 90 per cent grant aid under the National Development Plan, and local authorities paying the remainder.

The roll-out of the 19 metropolitan fibre networks will involve laying 50,000 kilometres of fibre-optic cabling, and will take about 18 months. The projects may be extended to a further 100 towns depending on funding availability.

The Minister for Communications, Mr Ahern, said yesterday the project would be similar to a technological ring road feeding the city and would result in increased investment to Cork.

"These metro rings send a clear signal to any investor that these towns are at the cutting edge in terms of internet access and willingness to embrace the information economy," he added.

The new metropolitan area fibre networks should enable telecoms firms to set up and offer low-cost internet services at very high speeds to business and consumers.

The lack of availability of low-cost broadband services for businesses in regional towns has been highlighted by a number of State advisory bodies as a key problem preventing inward investment.

Last week, Forfás reiterated its call for more investment in broadband infrastructure in its annual review of 2002 and outlook statement for 2003. It concluded that the Republic was "significantly behind leading countries in terms of price competitiveness, coverage and take-up ".

The metropolitan broadband network should help in this regard by enabling regional companies to link their PCs to fibre, thereby dramatically reducing the time it takes to download or send files.

The Government is expected to announce a tender process within the next few weeks to attract private companies to bid for the right to manage the new networks.

The 19 towns involved in the project include Waterford, Dungarvan, Wexford, Carlow, Clonmel, Kilkenny, Cork, Shannon/ Limerick, Galway, Athlone, Mullingar, Carrick-on-Shannon, Manorhamilton, Gaoth Dobhair, Roscommon, Portlaoise, Letterkenny, Tullamore and Ballina.