Australia's National Broadband Network (NBN) project is likely to cost taxpayers A$11 billion ($8.60 billion), the communications minister said.
“At this stage we are envisaging the commonwealth’s commitment to be in the order of $11 billion,” Senator Stephen Conroy told a Senate Estimates Committee this week.
He confirmed that the “total cost of the network” could be as high as $43 billion ($31 billion), but said that this included a “substantial contingency” build into it.
He said the rollout would be funded with a 50/50 debt-equity ratio, and that the government would hold 51% of the equity.
“Indeed, we expect that the actual cost to be significantly lower than $43 billion... even [ABN AMRO] analyst Ian Martin stated the government’s proposed NBN Co could roll out a passive optical network -based FTTP network to 90% of households for less than A$30 billion.”
It was possible that operators could sell in existing network assets in exchange for equity in the new company is also likely to lower the costs, he said.
The government is still in negotiations with incumbent Telstra over its participation in the project, which would be Australia’s biggest-ever infrastructure investment.
Meanwhile Susan Crawford, adviser to US president Barack Obama, has floated the idea of the US following Australia's lead, according to the National Journal. Crawford raised the notion of the US building its own NBN during a policy forum last month.
But the proposal has been met with skepticism from a number of sources, including former FCC head Reed Hundt.