Australian Government kills Opel broadband venture

Stuart Corner
Wednesday, 02 April 2008 03:26

IT Policy - Government Tech Policy

The Federal Government has told the Opel Optus/elders JV that was granted almost $1b of federal funding to roll out regional broadband services that it has not met requirements, and the contract has been terminated.

In a statement to the ASX, Optus' parent SingTel said: "On 1 April 2008 the Government advised that it considers the conditions have not been satisfied and has terminated the funding agreement. It said Optus had spent $26 million to date on the project.

A spokesman for communications minister Stephen Conroy confirmed the move and said a statement would be issued shortly.

The SingTel statement added that: "The joint venturers, Optus and Elders, maintain that all conditions precedent to the funding agreement have been satisfied.  The Opel network was capable of meeting the objectives of the Government’s Broadband Connect Infrastructure Program and delivering improved broadband services to 889,322 underserved premises in rural and regional Australia within two years at metro-comparable prices."

However, SingTel did not suggest that it would challenge the decision. It said that, in the year to 31 March 2008, Optus had incurred approximately $7 million in operating expenses and $9 million in capital expenditure relating to the Broadband Connect Infrastructure program. And that "in the absence of recoveries from the Government, the capital expenditure of $9 million will be written off in the quarter ended 31 March 2008."