Thursday, 25 October 2018 09:03

Labor terms Switkowski's $50b NBN valuation 'departure from reality' Featured

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Labor terms Switkowski's $50b NBN valuation 'departure from reality' Courtesy NBN Co

The Australian Labor Party has questioned the value apportioned to the NBN Co by its chairman Ziggy Switkowski, who said during a Senate Estimates hearing that the company could fetch a price of $50 billion if it was sold post-2020.

Labor Shadow Communications Minister Michelle Rowland and Shadow Finance Minister Jim Chalmers referred to Switkowski's quote, "I could certainly generate - and do generate - figures around $50 billion for the value of this company in the early 2020s.”

They described it as a "concerning departure from reality".

During his statements to Estimates, Switkowski also ruled out a write-down of the NBN, though he said this was a personal view.

"I can rule out a write-down, this is my personal view. Any consideration on the value of the NBN will await until the business moves into a relatively normal, conventional mode, which will happen when we finish the build in 2020, we compete the conversion of all households and business in 2021, we turn cash-flow positive and then whoever needs to make the judgement will make it then," Switkowski said.

Rowland and Chalmers said Switkowski's estimate was at odds with the analysis of accounting firm Price Waterhouse Coopers who had estimated that the network was worth $27 billion in 2016.

The Labor duo also cited the assessment of ratings agency Standard and Poor's who said in July a write-down of the NBN appeared inevitable.

S&P also said the NBN would not return a profit from the billions invested in the project, adding that the NBN Co's business model had led to telcos investing heavily in mobile services to avoid paying the company's inflated prices.

"Given the significant difference of opinion, Labor calls on the NBN Co Chairman to provide evidence or analysis to support his claim," Rowland and Chalmers said.

"If he cannot, he should withdraw or correct the statement. As it stands, the Liberals’ multi-technology mix is $22 billion over budget and four years behind schedule.

"No amount of wishful thinking can undo this fact."

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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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