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$17m on failed tender not a waste

News Clippings AAP, news.com.au, February 04 2010

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COMMUNICATIONS Minister Stephen Conroy insists $17 million spent on the failed national broadband tender process wasn’t a waste.

He instead says the entire process changed with the global financial crisis.

The opposition has accused the government of misleading the Senate over progress of the tender, after a National Audit Office inquiry found the $4.7 billion plan for a fibre-to-the-node (FTTN) national broadband network was unlikely ever to succeed due to a number of significant risks.

The audit office investigation, released yesterday, found the failed tender process cost the government and proponents more than $30 million, including $17 million of the government’s own money.

Family First Senator Steve Fielding expressed outright condemnation, declaring it an absolute waste of taxpayers’ money.

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

The FTTN plan was abandoned in April last year and replaced with the $42 billion fibre-to-the-premises option after it was determined none of the proposals submitted met government expectations.

Senator Conroy said the tender process was absolutely not a waste of money.

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

Then the global financial crisis hit, he said, with the audit report acknowledging that the magnitude of the crisis was largely unanticipated.

Senator Conroy said the government always believed that none of the existing tenders represented value for money.

“We then believed that we would find a solution,’’ he said.

Prime Minister Kevin Rudd said the government was determined to get this right.

“Let’s go to the core of why we used that tender process - test the market in difficult circumstances in the middle of the financial crisis last year,’’ he said.

Mr Rudd said the expert panel concluded none of the tenders represented value for the taxpayers’ dollar and the best way forward was fibre optic cable direct to each home.

Finance Minister Lindsay Tanner said the government had moved to a much more comprehensive proposal than the original proposition to wire up virtually the entire nation.

“That’s obviously expensive,’’ he said.

Opposition Senate leader Nick Minchin asked why Senator Conroy misled the Senate by saying in February 2009 that he still wanted to sign the FTTN contract, when he knew by then his tender process was already doomed to fail.

“I utterly reject this assertion,’’ Senator Conroy responded.