NBN costs blow out by $29bn

A $29 billion blow-out in the funding needed to complete the original national broadband network has forced Communications Minister Malcolm Turnbull to abandon election promises, admitting the company would no longer be able to finish the first stage of the network by 2016.

Initial plans to limit network construction costs to government funding may also be threatened, with new funding models put forward by NBN Co looking much like Labor’s current estimates.

In a much anticipated strategic review released publicly for the first time Thursday, NBN Co said it would cost $33 billion to roll out a mix of technologies, slightly less than the existing $37.4 billion project.

But in a damning assessment of the former NBN Co management and Labor’s policy, the company argued that the current financial estimates are wrong, and that the project would cost $72.9 billion in funding – instead of $44.1 billion - and take three extra years to complete.

The review provided the first full assessment of the state of the massive infrastructure project and recommending steps to complete the project, but revealed for the first time holes in both Labor’s broadband policy, and cast doubts over NBN Co’s ability to meet the Coalition’s broadband policy assumptions.

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