Government cancels AUD958 million funding for OPEL broadband project

2 Apr 2008

The Australian government has cancelled a AUD958 million (USD871 million) funding agreement with OPEL Networks for the construction of a broadband network for the country’s rural and regional areas. The government terminated the agreement on the basis that the network plan did not satisfy the prescribed coverage requirements. The partners behind OPEL, the Elders-backed Futuris Corp and SingTel’s Optus, secured the funding agreement with the previous Howard government in June last year. The pair maintain that the OPEL plan satisfied the prescribed coverage requirements; ‘The OPEL network is capable of meeting the objectives of the Broadband Connect Infrastructure Program and delivering improved broadband services to 889,322 underserved premises in rural and regional Australia within two years and at metro-comparable prices,’ Futuris said in a statement.

Australia’s largest telecoms group, Telstra, which opposed the awarding of the funding to OPEL from the outset, said it was a common sense decision to terminate the broadband infrastructure program. ‘The OPEL plan failed to meet the fundamental requirements of the funding and would have done nothing to increase the availability of broadband access in rural and remote Australia,’ said Telstra Country Wide Group chief executive Geoff Booth.