NBN tender inquiry possible

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Australia's Auditor General will not rule-out an investigation into the troubled National Broadband Network (NBN) tender

By Darren Pauli | Sydney | Friday, 24 April, 2009

Australia's Auditor General will not rule-out a formal investigation into the troubled National Broadband Network (NBN) tender process which was scrapped after more than a year review.

Auditor General (AG) Ian McPhee told opposition communications spokesman Nick Minchin, who requested an investigation, that the tender process "would be a potential audit topic".

The coalition requested the AG investigate why the six NBN proposals were deemed unsatisfactory by the government-appointed NBN expert panel, and claims that the tender process did not contain enough information for tenderers to construct bids.

The tender was delayed for 12 weeks from May last year while crucial and sensitive network information was sought from Telstra.

Minchin said in a statement the tender process did not provide bidders with adequate time or information to construct bids.

"The opposition contended the RFP was based on totally unrealistic objectives, with ridiculous timeframes imposed on proponents for a procurement of this scale and complexity," Minchin said.

"The bidders themselves made it perfectly clear that the government's objectives were simply unrealistic and unaffordable, including an expectation for fibre-to-the-node to be rolled out to 98% of homes and businesses.

"This process has subsequently collapsed without producing an outcome and has wasted millions of dollars of taxpayers' money, as well as the time and money of those bidders who in good faith put forward proposals," he said.

Former NSW treasurer Michael Egan, also head of the Terria consortium of telcos which bid collectively for the NBN, said the coalition calls for an inquiry were chaff.

"It's a bit of government noise.... I doubt the [AG] will take any action," Egan said.

A spokesman for another NBN bidder, who requested anonymity said Minchin's calls for the government to return the $5 million bond — used to secure Telstra's network information — along with money spent on proposals would be ignored. He said money is invested in proposals with the expectation the bid may be unsuccessful.

Transact reportedly spent up to $1 million on its bid.