Failed broadband plan 'cost $30 million'

3 Feb 2010, 7:51 pm   -   Source: AAP
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The audit office has said the government was given 'early advice' about key risks to the success of the proposals process for the FTTN plan. (File AAP)

The audit office has said the government was given 'early advice' about key risks to the success of the proposals process for the FTTN plan. (File AAP)

The Rudd government's $4.7 billion plan for a fibre-to-the-node national broadband network was unlikely ever to succeed due to a number of risks, a report says.

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The Rudd government's $4.7 billion plan for a fibre-to-the-node (FTTN) national broadband network was unlikely ever to succeed due to a number of significant risks, a report has found.

A National Audit Office inquiry has also found the failed tender process came at a cost to taxpayers and project proponents of more than $30 million.

The FTTN plan was abandoned in April last year and replaced with the $42 billion fibre-to-the-premises option after it was determined none of the proposals submitted met government expectations.

However, the audit office on Wednesday said the government had been given "early advice" about key risks to the success of the request for proposals process for the FTTN plan.

Among those key risks, a non-Telstra proposal was unlikely to build and operate a commercially viable NBN in circumstances where the proponent might have to pay the telco to use its existing infrastructure.

Telstra had been excluded from the tender process after failing to submit a small-business plan as part of its proposal.

The government was also warned the global financial crisis had significantly reduced the prospects of a successful outcome by affecting the viability of proposals, and that there was limited scope to upgrade a FTTN network.

Despite its observations, the audit office has not made any recommendations because of the termination of the request for proposals process.

It did, however, raise concerns that the process had come at a cost to the government and proponents in excess of $30 million, including some $17 million for the Department of Broadband, Communications and the Digital Economy.

Companies bidding to build the network were left out of pocket by between $1 million and $8 million.

Opposition communications spokesman Tony Smith said the report showed the entire process had been fatally flawed.

Mr Smith said Communications Minister Stephen Conroy had "ensured more than $30 million went down the drain".

"It is also clear the minister ignored increasing warnings that the process was failing."

The report should ring alarm bells for Australians about the failure of the Rudd government to assess risk and ensure value for money, Mr Smith said.

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Your Comments

NO NO NO!

Brian - from Brisbane, 2 years ago

No more please. This silly campaign to convince the poor taxpayer that we need to spend spend spend so many millions on grand unaffordable schemes like 43M broadband network with nanny filters. Just look at the track record of failures by this spinning government - guarantees that damaged the finance industry, bats in the belfry, fuel watch, grocery watch, copenhagen and all the other spentathon talkathons. Enough! GO!

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