Privatisation of government’s ICON network put on hold

Government to retain ownership of ICON

The government will, for now at least, retain ownership of ICON — the Intra Government Communications Network.

The government in its Mid-Year Economic and Fiscal Outlook 2014-15 revealed that as part of its “smaller government reforms” it would commission a scoping study on “options for the future management, operations and ownership”.

“The study will assess the likely sale environment for this business operation and seek to ascertain the optimal method and timing of any sale,” the MYEFO stated.

At this time selling or leasing ICON would not represent value for money for the government, a statement issued today by finance minister Mathias Cormann said.

Ninety seven government agencies employ ICON, the Australian government CTO, John Sheridan, told a Senate Estimates hearing in February.

The network has 516 points of presence throughout the ACT and about 160,000 kilometres of fibre.

The government spends around $8 million a year on the network, including $5 million a year on new connections, Sheridan said.

The scoping study found that the network “provides significant value to the government as a strategic asset and is highly valued by government agencies for its low cost and high volume bandwidth, which facilitate the provision of secure cost effective telecommunications services,” the statement released by Cormann said.

Connecting to the network costs agencies around a tenth of the cost of commercial cable, Sheridan said during the February hearing.

The government will act on a number of recommendations from the scoping study, Cormann said.

They include improving governance arrangements, introducing service-level agreements and reviewing internal financial arrangements in order to provide funding for future investment.

The government will also develop a technology strategy that considers the network’s potential role within a whole-of-government ICT framework, Cormann said.

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