British Telecommunications Plc’s monster contract with the government of New South Wales, which looked such a coup when it was awarded, has turned sourer than the inside of a Melbourne tram-driver’s glove. British Telecom is now threatening to abandon its planned $445m investment in the Australian telecommunications sector, alleging breach of the contract by New South Wales. BT Australasia has terminated its ú350m contract to provide that telephone network to the New South Wales government, complaining that the government did not make sure its agencies were actually using the network. The contract has failed as the government has not been able to deliver its agencies to the BT network – even though this was a condition of our agreement with the government, managing director Robert Kay said, warning that the state government was in breach of the contract by directly contracting Australian state-owned Telstra Corp for a significant part of the overall work. Nine months of talks to resolve the conflict had proved fruitless and that as a result the huge development programme announced in December was now on hold and in jeopardy. This was intended to fund collaboration between Australian universities and the UK development laboratories.
