The head of the government commissioned audit of the NBN has called for all public infrastructure projects costing more than $1 billion to be subject to a cost-benefit analysis prior to the commencement of construction.
Former Telstra director and ex-head of the Productivity Commission Bill Scales found that the NBN’s establishment had been “rushed, chaotic and inadequate,” and recommended extensive changes to the process by which infrastructure mega projects are examined and approved.
According to Scales, the policy for the multi-billion dollar project passed through only 11 weeks of consideration and review after being launched in April 2009.
The original budget for the NBN was expected be around $43 billion, with a construction period of roughly eight years. The project’s cost has already blown out to over $73 billion, however, and it is now tipped to take as long as two decades to finish.
Scales lambasted the lack of adequate scrutiny of the merits and drawbacks of the project prior to its launch.
“There was no business case or any cost benefit analysis, or independent studies of the policy undertaken…and without any consultation with the wider community,” he said.
In order to prevent similar cost blowouts with infrastructure megaprojects in future, Scales recommended that any infrastructure election promises made by political parties be “fully and independently costed by the Productivity Commission or Infrastructure Australia,” and that all costs be publicly disclosed.
Any projects worth in excess of $1 billion should also be subject to a cost-benefit analysis, while a “full project plan” should be made available to the Australian public prior to the start of construction.
Communications Minister Malcolm Turnbull, who commissioned the audit, and Infrastructure Minister Warren Truss both gave their backing to Scales’ proposals.
“All infrastructure projects costing over $1 billion dollars will have a positive cost-benefit analysis if they are to proceed with government funding,” said a spokesman for Truss. “Detailed planning for Western Sydney airport is now under way – this will include the development of a detailed business case and cost-benefit analysis.”
Brendan Lyon, the chief executive of Infrastructure Partnerships Australia, gave his support to greater scrutiny of infrastructure mega projects, and also recommended that the Badgerys Creek airport be subject to a cost benefit analysis prior to the start of work.
“The more you can get transparency and rigour into major projects the better off you will be,” said Lyon. “We need to look at how large projects such as [the NBN] could better managed.”
Former Communications Minister Stephen Conroy argued, however, that the audit was politically tendentious and aimed at discrediting the NBN in order to distract from the current government’s lack of adequate national internet policy.
“The government has now spent $10 million commissioning six reports of which this is just one that are all political attacks on the National Broadband Network,” said Conroy to ABC Radio. “Why is Malcolm Turnbull spending $10 million of taxpayer’s money to attack the NBN? Because his policy is a dog.”