Costs of $30 million for the original failed broadband plans

A new report has discovers that due to a number of significant risks it would have been unlikely that the Fibre-to-the-node (FTTN) National Broadband Network plans, which would have cost the Federal Government $4.7 billion, would ever have succeeded.

The final costing of the failed tender process for those participating in the project and the taxpayer was also found to come to $30 million according to a National Audit Office inquiry.

When the federal government found that none of the proposed bids entered by the various groups and consortiums had met its specific requirements it cancelled its plans for a FTTN network back in April 2009 and began work on a Fibre-to-the-premises plan valued at $42 billion instead.

With regards to the FTTN plan and the possibility of the request for proposals process succeeding, a number of risks, including the lack of commercial viability in using a non-Telstra proposal if the group winning the bid would have to pay to use the infrastructure Telstra already had in place, had been bought to light quite early on in the process said the Audit Office recently.

Following a failure during its initial proposal to submit a small-business plan Telstra had been removed from the tender process quite early on.

As well as the scope within which any FTTN network could be upgraded a warning was also given to the government that the possibility of any of the tender bids being successful was seriously hampered by the global recession, which would question the viability of the bids that were submitted.

The sudden cancelling of the request for proposals process, however, meant that no recommendations had been made by the Audit Office even after the observations it had made.

The costs of more than $30 million to those involved in the process and the Government itself, which included $17 million for the Department of Broadband, Communications and the Digital Economy was, however, raised as a serious concern by the Audit Office.

Source – Businesspectator