NBN costs go down, not up

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NBN costs go down, not up

Federal broadband minister Stephen Conroy has weighed in on suggestions of a cost blow-out for the National Broadband Network (NBN), suggesting the cost may in fact be lower than first thought.

AAP reported yesterday that Telstra had revised its estimates for the network cost from $5 billion to more than $15 billion, due to the current financial crisis.

Speaking in Canberra today to release the Regional Telecommunications Review Committee report for public comment, Senator Conroy also responded to Telstra’s claims over rising costs to build the NBN.

“For those who are suggesting that there’s been a blow-out in cost, what I’d say is that it seems to me, on reading of the commentary, that in actual fact costs have come down from some of those early estimates,” said Conroy.

“Some estimates not that long ago were $25 billion and some of the estimates are now $10 to $15 [billion].”

Conroy refused to be drawn on whether any of the potential bidders would try and hold off building the network until the financial crisis stabilizes – should they be win the current tender process.

“I think it’s too early to suggest that people will not bid on the basis of what’s happened over the last few weeks,” Conroy said.

“What they’re going to look at is what’s going to happen over the next few months.”

Conroy told reporters that the government would respond to the Regional Telecommunications Review Committee report by March 5, 2009 at the latest, although he suggested that a response from the government would likely be delivered sooner.

“We’ll be trying to bring forward a response as fast as we can,” he said.

The Federal government has allocated approximately $400 million to ‘respond to the committee report’, according to a statement made by the Department.

However, the review committee chairman, Bill Glasson, suggested that he would like to see investment priorities allocated once more details of the NBN rollout are known.

“I would like to see when that tender has been awarded, to see how that plans to be rolled out, and, I suppose, where it plans to finish. And then depending on when it finishes, I would like to build on the back of that,” Glasson added.
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