NBN to raise funds in 2017

The cost of building the national broadband network (NBN) is expected to blow out by as much as $15 billion, with the rollout company looking to the private sector for funds to complete the program after 2017.

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The cost has risen from a forecast $41 billion to between $46 and $56 billion, and likely close to $49 billion, rollout company NBN said on Monday.

The government has committed $29.5 billion to the network’s construction, meaning the company will have to raise $26.5 billion from 2017.

“If you look within this year, we will have spent $21 billion of allocated equity towards NBN,” chief executive Bill Morrow said.

“By the end of next year, we will just cross over the $29.5 billion. This is when we need to bring in external funding. That funding, we are looking at right now, today, will have to be addressed in 2017.”

Mr Morrow said the company was targeting a “reasonable” cost of $49 billion, with the $46 billion to $56 billion range including $4.6 billion for contingencies.

“We know we have to allocate for certain uncertainties,” he said.

Mr Morrow said the NBN had exceeded its targets during the 2014/15 financial year, with the number of active users and serviceable premises having doubled to 486,000 and 1.2 million, respectively.

Revenues also more than doubled to $161 million, from $60 million.

Communications Minister Malcolm Turnbull said he was confident in the NBN management.

“For the first time in the NBN’s history, all of us can have real confidence in the numbers being presented,” Mr Turnbull said.

“The reality is that under the Labor party neither the company nor the Labor government actually knew what it would cost or how long it would take to do the project,” Mr Turnbull said.