The Australian government has terminated a 958 million Australian dollar
($869 million) agreement with a Singaporebacked consortium to build a rural
broadband network, officials said Wednesday.
The termination of the OPEL network funding is likely make an upcoming tender
for the governments planned fibertothenode network even more competitive.
OPEL partners Futuris Corp. and Singapore Telecommunications Ltd. said in
statements to the Australian Securities Exchange that the government on Tuesday
had advised that it considers the conditions have not been satisfied and has
terminated the funding agreement.
Confirming the termination, Communications Minister Stephen Conroy said the
agreement was canceled because OPEL was unable to meet a commitment to provide
broadband coverage to 90 percent of underserved rural areas.
A detailed analysis showed the network would cover only 72 percent of
identified underserved premises, Conroy said in a statement.
The OPEL partners said they maintained that all conditions for the funding
agreement had been satisfied, and that the OPEL network was capable of meeting
the objectives of the governments broadband network plans.
Futuris and Singapore Telecommunications, equal partners in OPEL, were awarded
the contract by the former government of Prime Minister John Howard, which was
ousted at elections in November last year.
New Prime Minister Kevin Rudd has promised to provide 98 percent of Australian
homes with highspeed Internet services in the next five years. It has pledged
up to 4.7 billion Australian dollars ($4.3 billion) of government funds to build
an open access network in a publicprivate partnership.
The new government is hoping to attract proposals from a number of companies,
including Telstra, Australias biggest telecommunications company, and SingTel
for its planned network.
The OPEL partners aid that if they were unable to recover money from the
government for terminating the contract, Futuris would make a provision of 15
million Australian dollars ($13.6 million) as a nonrecurring item, and Singapore
Telecommunications Australian subsidiary Optus will write off 9 million
Australian dollars ($8 million).
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