Monday, 8 April 2013

NBN: Impossible Claims. $5 billion YES, $94 billion, NO.

The Coalition want us to believe that a very carefully constructed, rigorously checked and highly scrutinised plan is out by $45 billion at least. Somehow, that scales up a $37.4 billion project to $94 billion, a cost blow-out larger even than any of the many Coalition initiated Defence projects "duds".

The NBN Fibre project is only $28.4 billion in total, of this only $16.5 billion is for the construction of the network (Telstra gets a sizeable payout per line disconnected) and of that, only $11 billion is variable costs (labour and equipment) that could be affected by the schedule.

Even if the roll-out went 100% over budget, that's ~$10 billion. What accounts for the other $35 billion? It's a complete nonsense.

I think the Coalition either got this for free, and its worth every penny if it was, or it should ask for its money back, these grossed-up figures are so far fetched as to be unbelievable.

A more detailed explanation follows...

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