Thursday, 27 June 2019 12:19

Audit office casts doubts on NBN Co ability to repay $19.5b govt loan Featured

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Audit office casts doubts on NBN Co ability to repay $19.5b govt loan Image by Rilsonav from Pixabay

Doubts have been cast on the NBN Co's financial projections and its ability to repay the $19.5 billion that it has been loaned by the Federal Government, with a report from the Australian National Audit Office putting the chances of its financial statements being incorrect as "high".

The money was loaned to the company by the government to negate the need to approach private companies for funds to build the network, the Australian Financial Review reported.

The ANAO report was also critical of the oversight and risk assessment in loaning the amount, blaming the Department of Communications for not developing processes to manage associated risk.

For the full-year 2018, the company recorded a loss of $4.1 billion, less than the loss of $4.24 billion for the full-year 2017, but much more than the $2.75 billion loss the company posted for the full-year 2016.

With the end of the network rollout due next year, there has been speculation as to what the government will do to bring the network up to speed, as the use of copper and HFC has left many users struggling with very poor speeds and unreliable connections.

The ANAO report said: "Communications was not able to provide evidence of their undertaking of the evaluation and assessment in establishing the loan, including suitability of the terms and conditions within the contract.

"[It also didn't provide evidence of] ongoing monitoring of NBN Co’s compliance with several aspects of the loan agreement, and an analysis to progressively assess NBN Co’s capacity to fully repay the loan."

The AFR quoted Communications Minister Paul Fletcher as saying he was confident that the NBN Co and his department were aware of their responsibility in handling the loan.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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