Wednesday, 24 April 2013

NBN: Sanity checking the Coalition's $17 billion savings

The Coalition Maths that led to a 45% savings on the NBN with DSL have always had me perplexed: they don't add up.

On the 8.9M DSL services, they were to save $1910 per line, valuing the Fibre install at $2810/line, or a total of $34.3 billion vs the $28.5 billion of the NBN Co 2012 Corporate Plan. The Coaition estimate could never have been less than $26.5 billion.

What about extra planning & preparation costs, unused material for the Fibre rollout, copper costs for reconfiguration and remediation/rehabilitation? All apparently zero cost or included in the guesstimate of $900/line.

What about working backwards, using the newly released cost breakdown from NBN Co?

NBN Co report $1100/line per Fibre connection (pg 6), leading to a maximum saving of $200/line or just $1.78 billion. Less cost of change-over and waste of unused material.

Is the real Coalition NBN plan going to need CapEx of $20.5 billion or $35.6 billion, a 75% increase on their first estimate?? The electorate deserves an update.

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