A controversial government move to invest in a fibre optic network will be examined by Newfoundland and Labrador's auditor general, with governing Tories nipping in the bud an Opposition call for a full public inquiry.

Opposition Leader Gerry Reid introduced a private member's bill Wednesday that would have launched an independent inquiry into the fibre-optic deal, which involves two of Premier Danny Williams's former business associates. 

Opposition Leader Gerry Reid wanted a full public inquiry into government support of a fibre-optic deal.
(CBC)

The Tories, however, pushed through an amendment that will instead send the matter to Auditor General John Noseworthy's office.

"This deal smells," Reid told the legislature minutes before the house voted through the amendment.

"Obviously, if you are not willing to let the truth be told, then there is only one other conclusion you can draw: that you are hiding something."

The fibre-optic deal has dominated proceedings at the house of assembly since the fall sitting opened on Monday.

Network will compete with existing system

Earlier this month, the provincial government announced a $15-million contribution for the fibre-optic network, which will connect the island with mainland Canada and compete with an existing Bell Aliant system.

The network will be built by a consortium involving Persona Communications, Rogers Communications and MTS Allstream.

The Liberals quickly focused on the involvement of two executives who had worked for Williams before he sold Cable Atlantic to Rogers and entered politics. Persona president Dean MacDonald and Ken Marshall, a Rogers vice-president, held key positions at Cable Atlantic. 

Innovation Minister Trevor Taylor said the Liberals have been trying to score political points on the fibre optic deal.
(CBC)

During debate Wednesday, critic Judy Foote said there was no need for a public subsidy of the network.

"If they want to come into this province and compete with Aliant, they can well afford to do it, just as Aliant can afford to compete with them," she said.

Progressive Conservative MHAs said there can be a review of the deal without launching a full inquiry.

"The auditor general is independent," Finance Minister Loyola Sullivan said. "They are getting what they called for, and we are specifying it."

With a majority in the house, the Tories were able to pass the amendment — moved by Natural Resources Minister Kathy Dunderdale — to direct the investigation to the auditor general's office.

Meanwhile, the government took more steps Wednesday to explain the deal.

Deal deemed not feasible without public money

At a technical briefing for journalists, which could not be recorded, senior officials said the consortium will earn a modest rate of return. As well, they said, the project would not be feasible without public money.

Innovation and Trade Minister Trevor Taylor, who has colourfully brushed aside Opposition questions in the legislature all week, said the Liberals will always focus on the negative.

"It made no difference if it came down off the mount with Moses carrying it in stone," Taylor said.

Earlier this month, government members of the public accounts committee voted down a Liberal motion for the committee to launch its own inquiry.