Australia's auditor general has launched a probe of the government's aborted National Broadband Network (NBN) tender.
The Australian National Audit Office (ANAO) said it would go ahead with the investigation after carrying out a preliminary inquiry.
Shadow communications minister Nick Minchin, who has been pushing for the inquiry, said he believed the government had pulled the NBN tender because of a possible A$20 billion compensation claim from Telstra.
“The Rudd Government wasted almost 18 months and around A$20 million ($15.6 million) on this process, which from the outset had little prospect of producing a positive outcome,” Minchin said. “Tenderers also spent millions of dollars on their submissions to a fatally flawed process.”
Minchin said the bidders had considered the government’s objectives as “totally unrealistic and unaffordable.”
“We also learned that one of the key reasons the tender failed was because of fears that the Commonwealth would have to pay at least $20 billion in compensation to Telstra if it attempted to proceed without it, because other proponents would still need to access the telco’s core infrastructure.”
The government had planned to spend A$4.7 billion to bring fiber broadband to 98% of the population, with a private operator spending the rest, and launched a tender to choose that operator.
But this plan was scrapped in April - and replaced with a far more ambitiousA$43 billion plan – after the communications ministry rejected every bid for the project.
The audit is expected to be completed in early 2010. The office will investigate the background and conduct of the RFP process, management of key risks associated with the project and stakeholder consultation.