Aust NBN could take 30 years to break even, warns CEO

Robert Clark
16 Apr 2010
00:00
News
Daily News

It could take as much as 30 years before the Australian government recovers its investment in the state-backed NBN Company, the firm’s CEO has told an inquiry.

NBN Co boss Mike Quigley told a Senate committee hearing yesterday that the company was “nowhere near” ready to start seeking private investment in the next-generation broadband project.

The Australian government has said it would cost up to A$43 billion ($40.2b) to build fiber access networks throughout the country. It has been unable to strike a deal with incumbent Telstra over its involvement in the project.

Quigley said that NBN Co had not yet begun thinking about attracting private sector financing for the project.

“We are nowhere near that point yet,” The Australian newspaper reported him telling the committee. “It's simply not practical for a company such as NBN Co any time soon to go to private equity or private debt markets, so we're not even thinking about that at this point.”

NBN Co, which has been backed by A$260 million in funds from the Australian government, has begun several small fiber projects in Tasmania.

“The board's role is to get a satisfactory long-term return on the capital the government invests,” Quigley said. “Now it's up to the government to determine what that return rate is, but we would hope to generate a return.

“This is a long-term project, so for this type of nation-building infrastructure I'd imagine you'd be looking at a 20- to 30-year timeframe.”

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