Tasmanian Treasurer David Crean last week announced the purchase from Downing EDI at a cost of AU$23.1 million to taxpayers. However the opposition leader, Rene Hidding, has lashed out at the government, claiming the true cost to taxpayers of the cable roll-out could be closer to AU$100 million if a strategic alliance with private industry cannot be negotiated.
"What we are facing now is a AU$100 million bill for a project that has an untested value," Hidding said in a statement.
The opposition say the figure came from Crean himself, and quoted him in a press release.
"With that we have the opportunity for fibre-optic rollout-with the gas [pipeline], which is a project greater than $100 million," the quote read.
However a spokesman for the premier, Jim Bacon, told ZDNet Australia the figure was taken out of context, and the treasurer was referring to the amount of capital likely to be injected into the Tasmanian economy through the project. He flatly rejected claims the purchase was a "bail-out".
"The AU$100 million figure was based on wide-spread private sector investment in the project," he said. "We made the decision... it wasn't forced on us".
The spokesman said the government's decision was based on creating competition in the telecommunications space to Telstra, which recently began rolling out its own fibre cable to Tasmania. He cited OECD data which showed genuine competition can reduce costs by -as much as 80 percent".
The government will seek expressions of interest in building the infrastructure, the spokesman said. However he would not comment on who would foot the bill if a private sector partnership couldn't be made.
When contacted, a spokesperson for Downing EDI, the company rolling out the cable, confirmed the government always had the option of purchasing the cable, and denied the buy-out was unplanned.
-The government always had the option under the original contracts," he said.
