From the SMH:
A $29 billion blow-out in the funding needed to complete the original national broadband network has forced Communications Minister Malcolm Turnbull to abandon election promises, admitting the company would no longer be able to finish the first stage of the network by 2016.
Initial plans to limit network construction costs to government funding may also be threatened, with new funding models put forward by NBN Co looking much like Labor’s current estimates.
In a much anticipated strategic review released publicly for the first time Thursday, NBN Co said it would cost $33 billion to roll out a mix of technologies, slightly less than the existing $37.4 billion project.
But in a damning assessment of the former NBN Co management and Labor’s policy, the company argued that the current financial estimates are wrong, and that the project would cost $72.9 billion in funding – instead of $44.1 billion — and take three extra years to complete.
More from BS:
However, the Coalition is sticking with the 2019 target saying that the optimised mix of technology proposed by the review will deliver access to download speeds of at least 50 Mbps to nine out of ten Australians and 100 Mbps to seven out of ten Australians.
The review states that the current NBN corporate plan overestimates revenues up to 2021 by $13 billion.
I guess there are no real surprises here but that’s one big number. As Alan Kohler wrote this morning the options are now to:
1. Press on with the project as it is.
Least likely. The cost to be revealed today of the existing project will almost certainly be a very silly number. Also, about 260,000 houses have now been passed and the current run rate is between 4000 and 5000 houses passed per week. At this rate it will take 42 years…
2. Abandon the whole thing and sell what’s been built so far on eBay.
Very tempting. This would be a political and legal nightmare…contracts can always be bought out…
3. Sell it to Telstra.
Even more tempting, except Telstra wouldn’t touch it unless it was paid to, and even then…
4. NBN Co buys the entire network and wholesale division of Telstra and offers a national ADSL 2+ service.
Very sensible, but far too sensible to actually happen… it would amount to re-nationalising a privatised business…
5. Change the NBN to fibre to the exchange (which is what the network is now) but use the current deal with Telstra.
Also sensible, and much more doable. It would simply be a national ADSL 2+ network owned and operated by NBN Co instead of Telstra…
6. Stick with fibre to the node and copper to the house, as described in the policy, even if it costs more than expected.
Still probably most likely, but only just (over scenario 5, above). Why? Because the NBN is a very seductive idea…
