The government is backing down from the proposed sell-off of the secure fibre network linking its Canberra agency sites, Finance Minister Mathias Cormann announced today.
He said a potential sale or lease "would not represent value for money for the government” at this time.
The federal government revealed it was looking into selling off or leasing the intra government communications network (ICON) to a private sector third-party in the late 2014 mid-year economic and fiscal outlook (MYEFO).
As part of its cost cutting drive, the mini budget revealed the Department of Finance would fund a scoping study to assess whether a private sector operator could run the network for cheaper than the government, and lease it back to public sector users for less that the cost-recovery fees they currently pay to Finance.
However, the study has given the outsourcing plan the thumbs down.
“The scoping study found that ICON provides significant value to the government as a strategic asset and is highly valued by government agencies for its low cost and high volume bandwidth, which facilitate the provision of secure cost effective telecommunications services,” Cormann said.
Instead, the reviewers suggested the government refine its management of the fibre network, which links 80 agencies through 150,000km of fibre across the nation’s capital.
The scoping study recommended Finance implement a new strategy for ICON and how it can be optimised for the delivery of the government's IT goals, such as a move to secure cloud computing.
It also said the department should tighten up the future funding arrangements for ICON to make sure critical investments underpin the ongoing running of the network infrastructure, and that it should clarify rules around property access, carrier licence exemption and third-party use of the network.
Cormann said work has already begun to put the recommendations into effect.
He also said the government would be pushing to make sure all 34 agencies using ICON for ‘protected’ level information encrypt their network traffic. At present, he said, only 17 use encryption.