Saturday, February 06, 2010

Australia - Conroy under fire for $30 million bill from aborted National Broadband Network tender

[smart company] Communications minister Stephen Conroy is currently under fire both home and abroad, with the Federal Opposition and even the Organisation for Economic Cooperation and Development questioning his judgement regarding the National Broadband Network tender process.

The judgements come after it was revealed the Government spent $30 million on the original NBN tender, which was eventually scrapped as the Government opted to build the network itself.

The head of the OECD's Australian operations, Claude Giorno, has now said the Government should apply a more stringent cost analysis process to its overall infrastructure plans, which includes the NBN project.

"Maybe not everybody needs to have a very-high-speed broadband connection," he told The Australian. "Maybe it would be less costly to develop alternative technology depending on where you are geographically."

Giorno also said "questions need to be answered" regarding the Government's involvement, with the planning needing "very careful assessment".

The comments come as a new Auditor-General's report found the Government spent $30 million on the original tender process, which was eventually scrapped in favour of the current proposal.

The report found the Government paid just over $600,000 to several experts and over $10 million to consultants, among which included Frontier Economics, KMPG and legal firm Corrs Chamber Westgarth.

The panel, which was designed to assess the original bids put forward for the project from groups such as Telstra, Optus and the Acacia consortium, were also paid. Members included Tony Mitchell ($168,893), Tony Shaw ($112,895), Reg Coutts ($128,892), John Wylie ($32,759) and former IBES director Rod Tucker ($161,476).

Former opposition communications spokesman Nick Minchin originally accused Conroy of misleading the Senate last year, when he said the Government intended to sign an NBN contract by March.

However, Conroy had reportedly received a letter from the panel of experts saying none of the bids put forward represented good cost value. He denies he misled the Parliament.

"Let's be very clear. When we commenced the tendering process, the economy was booming and Telstra said they were participating,'' he said on ABC Radio today.

Opposition communications spokesman Tony Smith has continued his hard-line stance against the NBN, saying taxpayers have every right to be wary.

"Taxpayers have every reason to be worried that the same master of this disaster is presiding over even more taxpayers' funds on the reckless NBN II proposal, which was announced without a cost-benefit analysis or a business plan."

Family First Senator Steve Fielding agreed with Smith, saying the process was a waste of money altogether.

"They (the government) stuffed up and got it bad and they cannot seem to admit that to the Australian public,'' he told reporters.

Conroy under fire for $30 million bill from aborted National Broadband Network tender

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