Australian Broadcasting Corp. Wins Contract for Pan-Asia Australia Network

Sky News Australia will seek compensation for failed tender process.

SYDNEY -- The Murdoch-aligned, 24-hour news service Sky News Australia will seek compensation from the federal government for its participation in the failed, year-long tender process for the operation of international broadcaster the Australia Network, after communications minister Stephen Conroy announced Monday night  that it would contract the incumbent operator the Australian Broadcasting Corp. (ABC) to run the service in perpetuity.

In what the federal opposition dubbed a “shambolic” process Conroy said that it was now government policy that ensures the Australia Network becomes a permanent feature of the ABC.

The decision came one month after the government terminated the tender process following leaks which it referred to both the Australian Federal Police and the Attorney General’s office.

The ABC and Sky News both bid for the 10-year, $223 million contract to broadcast the network to 44 nations in Asia and the Pacific.

The government said that the leaks, which suggested that Sky News, jointly owned by BSkyB and the Seven and Nine TV networks, would have won the tender, “compromised the tender  process and prevented a fair consideration of the bids.”

 “Having reflected upon the process to date, and what the service really needs to provide, the Government has determined that Australia's international broadcasting service should be delivered by the national broadcaster,” Conroy said Monday.

“The Australia Network is a major public diplomacy platform, and, as is the case with comparable operators such as the U.K’s BBC World Service and Germany’s Deutsche Welle, the Government believes the service should be provided by Australia’s national broadcaster, the ABC. The Government also believes that the ABC is well placed to explore the opportunity to combine the Australia Network with its current international radio service, Radio Australia, and potentially with new online services to provide a multi-platform international media operation to embrace the converged media era,” he added.

Sky News CEO Angelos Frangopolous told the ABC that Sky expects to be "fully compensated" for applying for the now-failed tender.

He said the decision to grant the contract to the ABC permanently is "extraordinary" given the two investigations.

ABC managing director Mark Scott said he was delighted by the Government's decision.

"The ABC takes seriously the responsibility to take Australia into the Asia Pacific region, building on the outstanding services we have delivered over 70 years," Scott said in a statement.

Observers here say the decision is politically charged.

The governing Labor Party has been beset by internal ructions since Kevin Rudd was dumped as prime minister by now leader Julia Gillard in a sudden coup in 2010. Rudd, now foreign minister was overseeing the Australia Network tender until it was pulled from his control and handed to Conroy and the federal cabinet earlier this year.

At the same time the government is in a very public stoush with parts of the Murdoch press here over reporting of a number of its key policies. An inquiry into press freedoms and control is currently in progress.