Aust getting closer to joining information superhighway's fast lane

IT'S the most significant infrastructure project to be undertaken in Australia since the Snowy Mountains scheme and promises to catapult the nation into the information superhighway's fast lane.

But it also now appears likely Telstra, the only Australian publicly-listed company to have lodged a bid for the multi-billion national broadband network (NBN) project, will be left out of the loop.

Australia's biggest telco was dumped from the tender process after lodging a bid which failed to include a plan of how to involve small- to medium-sized enterprises in the project.

The ensuing fallout has seen billions of dollars wiped from Telstra's market value.

Communications Minister Stephen Conroy says Telstra did not play by the rules, and maintains the company is out of the running for the project, likely to cost at least $15 billion, of which the government will contribute $4.7 billion of taxpayers money.

It was a high-stakes game of brinkmanship - and it seems to have backfired.

Or has it?

Ivor Ries, director of research at EL&C Baillieu Stockbroking, says Telstra stands to net a windfall of at least $80 billion if another proponent is chosen.

The company that eventually wins the bid will likely need access to Telstra's network.

"Telstra's network is private property," Mr Ries says.

"For the government to expropriate all or part of its network to build the NBN, Telstra will be entitled to compensation under the constitution, which enshrines the principle of no expropriation without compensation.

"Telstra's compensation claim would probably start at $80 billion and move upwards."

Full Article: Click here to see other news articles.