NBN To Cost $12bn More, 4 Year Delay.
The Strategic Review of the NBN, Australia’s biggest infrastructure project, out today, shows the Coalition’s Fibre-to-the-Node (FTTN) version will cost $12 billion more and won’t be completed until 2020.
The review suggests the National Broadband Network will be rolled out by 2020 at a total cost of $41 billion – $12 bn more than forecasted by the Coalition in April.
It also indicates that the 2016 target set by the Coalition for completion of the rollout, which will use a mixture of technologies, is not realistic.
In addition, the Coalition’s promise to have NBN users on 25 megabit per second (mbps) by 2016 is also unachievable, according to the report, conducted in conjunction with Boston Consulting Group, Deloitte and KordaMentha.
It now seems most NBN customers will have broadband speeds of 50 mbps by 2019.
The report also found NBN Co overestimated revenues until 2021 by $13 bn.
In a media conference today Minister for Communications Malcolm Turnbull said the NBN was not doing as well as expected.
“We assumed they would be able to meet their forecasts and a year earlier than has been assumed in the study.”
By contrast, Labor ‘s Fibre-to-the home (FTTH) would have cost $72.6 bn, and not completed until June 2024 – three years later than forcasted.
The extra funding for the project will come from debt and not government coffers, Turnbull said.
NBN Co, which now has a new boss – former Vodafone CEO Bill Murrow – will now work on a new statement of expectations, and a new corporate plan to be approved before 1 July 2014.
NBN Co Executive Chairman Dr Ziggy Switkowski said:”The NBN can be rolled out faster and at a much lower cost by combining proven technologies with existing capable networks.”
By 2019, at least two-thirds of Australians in the fixed-line footprint would have access to download speeds of up to 100Mbps from NBN Co compared to only 57 percent under the re-evaluation of the previous plan, he said.
“The proposed model could save taxpayers more than $31 billion compared to the current Fibre to the Premises-only rollout. It would also mean less disruption and less invasiveness to the homes and driveways of millions of Australians.”
Announced in October, the Strategic Review was established to examine the progress and cost of the current rollout.