Is the government sitting on a report that describes the collapse of one of its key policies – the rollout of the NBN?
While it might be exciting for Labor’s opponents to think so, the evidence so far suggests otherwise.
The clash between communications minister and deputy prime minister Anthony Albanese and his shadow, Malcolm Turnbull, on Monday night left a strong impression that the government is “sitting on a ticking timebomb”, as Turnbull put it.
The implication is that the third incarnation of NBN Co’s corporate plan, which will now not be released until after the election, contains details of cost overruns and delays that make the $37 billion project, due to be finished in 2021, more like the nightmare Turnbull has been describing since April – one costing $90 billion and finished when our children have grey hair (Fiddling with 1GB while the NBN burns, August 13).
But does that make sense? Albanese looked weak in the debate because he protested that he simply hadn’t “received the final version of the report” and that when he did he would have to run it through cabinet. He’s only an ickle-wickle minister, after all.
Actually, both Albo’s protestations are likely to be true.
Rob Oakeshott, a strong advocate of the NBN, told me yesterday that getting the second version of the corporate plan through cabinet (the inner workings of which, of course, the independent MP was not privy to) was a long-winded and tortuous process.
So Albanese could have lent on the NBN board and said: “Hurry up or the news media won’t have a chance to tear strips off me!” No pollie would do that.
And there is a legitimate reason to think this version of the corporate plan has some complicated material to consider. A fairly heated debate has occurred in past months over whose fault it is that Telstra’s pits and ducts, which the government has paid to use for the rollout, are full of asbestos.
The government has copped a lot of flak for doing a deal with Telstra that didn’t take this into account – even though Telstra chief executive David Thodey said very early in the piece that it was Telstra’s problem to clean up.
Nonetheless, this is causing delays that must be factored into the corporate plan – a process that no board should risk rushing to please one side of politics or the other.
So Labor is damned if a report showing asbestos-related delays is released, and damned if the report isn’t ready to release before the election.
Further, Oakeshott – who under the Gillard government sat on the committee overseeing the NBN rollout – says he doesn’t think any cost overruns in the new corporate plan will be significant. The government was excoriated for the costs/delays contained in the second version of the plan, but Oakeshott says they were flushing out all the bad news well ahead of the election.
The government later claimed that those problems were largely a function of a bottleneck – too few skilled workers in Australia to conduct large volumes of fibre ‘splicing’ work – or the incompetence of contracting firms, some of whose contracts NBN Co ultimately cancelled.
For problems of a similar magnitude to be in the third plan looks unlikely. Capital costs on a project of this scale are necessarily weighted towards the early rollout because that’s when most problems arise and, at great cost, are solved. The further the rollout progresses, the more ‘cookie cutter’ each type of installation becomes, and so the more consistent the price of installations becomes.
Albanese should have made those two points on Monday night – that the asbestos problem, which had been used to attack the government, would have slowed the corporate plan down; and secondly, that most of the bad news has already been released.
But he didn’t. He ended up looking like the minister for collapsing infrastructure when in fact the now travelling Senator Stephen Conroy already took most of that pain last year.
That’s a real blow for the government – the NBN was the one popular policy that might have made it through this campaign without too much mud sticking to it.
Some commentators will now automatically link this week’s event to a ‘corrupt government’ hiding a ‘ticking timebomb’ when, on this issue at least, Labor is likely to be telling it straight.