Cost doubts linger on National Broadband Network

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Cost doubts linger on National Broadband Network
Business lobbyists claim a cost-benefit analysis on the NBN is still required. Source: Bloomberg
Cost doubts linger on National Broadband Network
Business lobbyists claim a cost-benefit analysis on the NBN is still required. Source: Bloomberg

By Rachel Hewitt

USTRALIA’S powerful business lobby says a cost-benefit analysis of the $39.5 billion National Broadband Network is needed.

The Business Council of Australia yesterday welcomed the unveiling of a long-awaited NBN business plan.

But the group – representing 100 of the nation’s top companies – said “only a rigorous and transparent cost-benefit analysis” could determine whether the investment was “in the national interest”.

Another leading business group, the Australian Chamber of Commerce and Industry, raised similar concerns about the lack of detail.

ACCI director of economics and industry policy Greg Evans said: “Irrespective of the business case put today, the question remains: ‘Is it prudent for the Government to be taking on this risk and associated spending without an independent and rigorous cost-benefit analysis?’ ”

R eleasing the business plan yesterday, Prime Minister Julia Gillard said the public investment of $27.5 billion in the network would be “returned with interest”.

“What this document is telling you today is the NBN is viable,” Ms Gillard said.

“That’s before you go to all of the economic benefits for business.”

Australian Industry Group chief executive Heather Ridout said the release of the business plan was an important step in giving business a better understanding of the scope and implications of the project.

“The potential gains from improving business productivity through very fast broadband were not included in the business case released today and offer considerable opportunity to extend the national gains from this investment,” she said.

The NBN is expected to provide a 7.04 per cent internal rate of return and produce $5.8 billion in annual revenue in financial year 2021.

The business plan depends on NBN Co striking a binding $11 billion deal with telco giant Telstra to split its retail and wholesale arms and transfer its customers to the NBN.

Telstra yesterday said it intended to have a shareholder vote on the agreement by the middle of next year.

From:Herald Sun