When it comes to the NBN, the money is in the bank
Posted May 05, 2019 06:06:33The Australian Government is looking to cut its own carbon emissions by up to 40 per cent by 2020 from what is expected to be the highest in the world by 2030, and by 2040 it wants to make the network more reliable.
But when it comes, it will take money and that money will be coming from its own coffers.
Key points:NBN Co and the states are considering an option to cut emissions from the network to cut costsA report from the Department of Communications and the Bureau of Meteorology says there are more than 400,000 homes on the NBN network and the cost of maintaining them is expectedto be $3.4 billion by 2036The report says that if the network were to be dismantled and replaced, the cost would increase by more than $5 billionA key recommendation of the NBN Co’s review is to find a way to pay for the costs of keeping the network up and running, without reducing the national debt.
But the report has already raised the prospect of a possible “hard fork” of the network and a decision is now being made by the NBN Corp, which is set to deliver the NBN to the states and territories by the end of 2019.
The report from Department of Telecommunications (DT) and Bureau of Meterology (BOM) said the cost to maintain the network is expected increase by $3 billion to $3,425 million in 2019-20.
However, if the Network was to be shut down and replaced it would be expected to cost $3 per kilowatt hour, meaning the cost for each megawatt hour would increase to $5 per megawatten hour.
“This is a cost of keeping it running, which will be borne by the states, who will ultimately be responsible for keeping it up and operating,” the report said.
However it did not put a figure on how much would have to be cut from the NBN’s cost base to pay off the projected $3-billion.
The states and the federal government have been discussing the option of using funds from a new fund to pay back the states in the event of a shutdown, with the cost estimated to be $4 billion over 20 years.
The study said the states would have the option to transfer $100 million of the fund to the NT and WA for an amount equal to the amount of money the states were likely to receive.
It said the NT would receive $4.5 billion from the fund, while WA would receive another $5.5 million.
“If the Network were to shut down in 2020, and the NT were to have a new Government in place in 2021, the NT Government would receive approximately $10 million for the Network, with WA receiving approximately $1.3 million,” the study said.
The NT would also have to pay a $2 million payment over three years.
“The Network will continue to be operated as planned and NT and State governments will have the flexibility to use this money for maintenance of the Network or for other purposes,” it said.NT government has proposed a network shutdown as part of its deal to buy the NBNThe report said the report suggested the NT could pay back its $1 million contribution over three-and-a-half years, but the NT government has not yet proposed a shutdown as a part of the deal to purchase the NBN.
“We will continue operating the Network as normal,” NT Minister for Communications and Multimedia Mark Parnell told ABC News.
“There are no further costs that are expected to arise from the Network shutdown,” he said.
“I would expect that the NT will continue operation the Network until 2021, after which time the Network will be shut-down.”
The NT Government is planning to shut-downs on its network to allow for the purchase of the next-generation NBN in 2019.
The report suggested that if all the states voted in favour of shutting down, NT would have less than $100m to cover its operating costs.”NT would be able to use the remaining $100-million in the NT Fund to pay down operating costs and debt,” it stated.