NBN tender budget blows out by $10 million

THE Rudd Government has been forced to explain a $10 million budget blowout in the national broadband network, before a metre of fibre of the new network had been laid.

Initially, the Government set aside $10.4 million over five years for the costs of developing and managing the tender process for the NBN, including the establishment of an experts panel and specialist advisers to assess competing bids.

But yesterday, Finance Minister Lindsay Tanner told parliament an extra $10 million would be provided to the Department of Broadband, Communications and the Digital Economy to meet the costs associated with the NBN project.

This is separate to the $4.7 billion the federal government will contribute to the costs of rolling out the fibre network to 98 per cent of Australian homes and businesses.

Six bidders are vying for the task of rolling out the broadband network.

Opposition communications spokesman Nick Minchin attacked the Government's management of the project.

"Before a hole has even been dug, a tenderer even selected, we now learn that admin costs alone on this troubled project have already blown out by a staggering $10 million," Senator Minchin said.

"Money which is being burnt up on lawyers, consultants and the like, with no actual construction start date in sight."

But Communications Minister Stephen Conroy yesterday defended the expenditure.

"Given the magnitude and importance of this project, it is appropriate that the Government takes the time necessary, and allocates appropriate resources, to ensure the best outcome is achieved," Senator Conroy said.

The tender process was slated to be completed by June this year but Telstra's tardiness in providing information on its vast national network infrastructure delayed the projects schedule by at least six months.

The government has said the schedule for the project was always based on an indicative timetable and contingent on getting information about existing infrastructure to proponents.

Senator Conroy revealed in parliament yesterday that the six companies involved in the tender to roll out the network would next weekend make presentations to the expert panel about their bids.

The Minister will then be briefed on the bids for the first time.