Federal Opposition say broadband progress could be hurt by financial crisis

The current meltdown of the global economy is going to make the financing of the proposed national broadband network much more difficult according to the Federal Opposition.

The new network will been given $4.76 billion by the government for its setup but it is likely that whoever wins the bid will need to provide a further $10 billion before the network can be built say the opposition.

Terria consortium which is led by telecoms provider Optus is one of the bidders for the building of the network but has recently been hit by the departure of TransACT, which has confirmed that it will no longer be taking part, bringing the number of companies to withdraw from the group to three.

Nick Minchin, an opposition communications spokesman, has said that the building of the network may be made more difficult because of the international economic meltdown and also said that the implementation process is taking far too long.

He advised “It could be another 12 months before you’ve even got a contract signed for this and then a rollout. And given the global financial crisis we’re all hearing so much about, whether any of the preferred tender – if there is one – can raise the money is a real question.”

There is a distinct possibility that this project may run aground in the current climate said Senator Minchin.

He said “I think you’ve got significant doubts about the capacity to raise some $10 billion that would be needed from the private sector, doubts about how the Federal Government would invest its money in this scheme. [There are] doubts about the regulatory arrangements that would be required and how the Government would get them through the Parliament, so I won’t be surprised if this whole thing does fall in a big hole.”

The lodging of proposals for the network will be required from bidders by late in November.