The NBN is the nation’s longest and most expensive telecommunications project, with a $US17 billion ($21.6 billion) contract awarded to Telstra.
But its construction has been plagued by delays, cost overruns and massive cost overrun claims.
The Federal Government is in the process of renegotiating the NBN’s terms, which include an expected cost of $US7 billion ($7.6 million).
The Government’s own estimates of the cost of the project, which is to include fibre to the premises (FTTP) and satellite transmission, are far lower than the $US8.5 billion ($9.3 million) expected by the Government.
This means there are some issues with the Government’s original estimates, and the Federal Government will have to justify its higher figure.
The latest figures released by NBN Co on Tuesday (March 24) indicate the contract is currently worth $US2.5 trillion ($3.9 trillion) and the company has $2.2 trillion ($2.7 trillion) in capital to work with.
But the Federal Department of Industry and Communications (Dic) is in an uproar about the latest figures, arguing that the Government needs to give the NBN more time to go through the process.
“The Federal Department is currently considering the cost and schedule of the NBN project, and will be making a final determination in the coming weeks,” the department said in a statement on Tuesday.
“This process is expected to take several months and will provide an opportunity for the Government to consider alternative options and proposals for funding the NBN, including the potential for a Government-led FTTP rollout.”
The Department said it has also “received representations from NBN Co and the private sector”, including the NBN Co’s competitor Telstra, and is “considering the Government and other stakeholders’ input”.
“The department is aware that NBN Co is in a strong position to provide additional capacity to meet the NBN requirements, and that it would be in the best interests of the industry if the project was completed as quickly as possible,” the statement said.
“Given the Government has the right to make a final decision on the project and NBN Co has the obligation to deliver the project in full, we are working with the department to facilitate the final decision.”
The government is also working with NBN Co to “ensure the project is completed as rapidly as possible”, the department added.
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