The Federal Opposition has criticised the government's plans to spend $53 million on its National Broadband Network implementation study, claiming the document would be flawed due to the lack of an included rigorous cost/benefit analysis.
Minister Nick Minchin
In last night's budget the government revealed it would allocate a total of $53.2 million towards consultancy fees for establishing and implementing its $43 billion project.
The Opposition, however, has criticised the cost, noting the government had already spent $20 million on the first NBN tender process that was subsequently ditched.
"Now it plans to spend $53.2 million in a bid to implement a high-risk venture from a base of heavy deficit and debt, yet we learn the implementation study will not comprise any form of rigorous cost benefit analysis," Shadow Communications Minister Nick Minchin told ZDNet.com.au today.
"Labor keeps claiming this project will be commercially viable, yet has failed to provide a scrap of evidence to support those claims."
Conroy this week rejected the notion that a cost/benefit analysis was required for the project, and has instead cited a "conservative" estimate issued by Access Economics, which predicted a national high-speed broadband network would boost Australia's productivity by 1.1 per cent after a decade, compared to if one hadn't been built.
Intelligent Business Research Services analyst, Guy Cranswick told ZDNet.com.au that a cost benefit analysis was necessary for such a massive project.
"It's a huge fee and cost/benefit analysis is necessary. The people making those decisions will not be accountable for them by the time the nation has the chance to assess whether there was a benefit," said Cranswick. "The other thing, it's technology in a fast moving environment and it's not — unlike building a dam — future-proofed."
Ovum telco analyst David Kennedy told ZDNet.com.au the $53.2 million figure was a realistic sum for the work required.
It's a huge fee and cost/benefit analysis is necessary.
IBRS analyst Guy Cranswick
"They're looking for detailed information relating the everything from the business case to network design. This is a very large FTTH network ... so it's going to be a substantial engineering feat and the study is certainly not going to cost a few million, but would be in the double figures," Kennedy said.
Minchin also said the NBN implementation study's "early 2010" deadline posed a threat to Tasmania's July start date for its component of the NBN.
"The implementation study won't be completed until next year, yet the government claims roll-out will start in Tasmania in July, which a makes a mockery of the whole process," said Minchin.
A spokesperson for Conroy said he would make no apology for Tasmania's early start date. "The decision to launch the National Broadband Network in Tasmania was based on the advice of the government's independent Expert Panel. Given the long standing disadvantages faced by Tasmanians in accessing high speed broadband, the Australian Government happily accepted this advice," the spokesperson said.