Fed: Canberra terminates OPEL broadbank contract, ASX told

AAP General News (Australia)
04-02-2008
Fed: Canberra terminates OPEL broadbank contract, ASX told

SYDNEY, April 2 AAP - The federal government has cancelled the contract for Optus and
Elders to build a fibre-to-the-node broadband network, the companies say.

Futuris Corporation, which owns Elders, and Singapore Telecommunications, Optus's parent,
both told the Australian Stock Exchange of the cancellation of the contract this morning.

Futuris and Optus, in an equal partnership called OPEL, were awarded $958 million by
the Howard government to construct a broadband network for rural and regional Australia.

According to the companies' statements to the stock exchange, the Rudd government says
it has cancelled the contract because of an assessment that the implementation plan does
not meet prescribed coverage requirements.

The government also was concerned that networks would be duplicated, as it has proposed
its own fibre-to-the-node broadband plan, according to the statements.

Futuris and Optus maintain the OPEL plan satisfies the prescribed coverage requirements.

If the companies are unable to recover money from the government, Futuris will make
a provision of $15 million as a non-recurring item and Optus will write off $9 million.

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KEYWORD: OPEL

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