NBN Co came in for a fair degree of criticism from the Federal Opposition at last week’s Senate Estimates Committee for delays to it construction schedule. It continually makes announcements about new suburbs coming online or new construction contracts being let, but the actual number of users remains relatively small.
Give the company’s uncertain future after the opposition’s likely victory in this year’s federal election, it is trying to announce as much as possible and lock in as many construction contracts as possible before the September 2013 election. It wants to be in as strong a bargaining position as possible in the case of a change of government.
The roll schedule was thrown into higher profile last week when NBN Co’s CEO Mike Quigley appeared before an acrimonious Senate Estimates Committee hearing. When quizzed by Liberal Senator Simon Birmingham Quigley said that Syntheo, a key NBN construction partner, had struck “significant hurdles” in its construction program.
Syntheo is a 50:50 joint-venture between Lend Lease and Service Stream.. It has been contracted by NBN Co to undertake most of the NBN’s construction in South Australia, Western Australia and the Northern Territory.
“In October we were forecasting just under 300,000 premises passed and we’re now forecasting almost 286,000,” Quigley said. “The reason for the change is one of our construction partners has reduced significantly their forecast since we presented back in the October timeframe.”
“The contractor we are using there is ramping up and obviously facing some challenges and we’re working with them to try and overcome those.” But under closer questioning, Quigley was forced to admit that no promises in the Syntheo area had yet been actually connected.
In its latest construction announcement NBN Co has awarded a contract to Downer EDI Engineering to provide additional construction capacity for the rollout of the NBN in northern NSW. The contract is valued up to $94 million over two years, with two one-year options to renew.
NBN Co Chief Operating Officer, Ralph Steffens said the announcement means more construction workers rolling out more fibre to more homes and businesses and that it was the first in a series of contract awards over coming months as NBN Co ramps up construction activity. The company has previously noted it plans to add more construction resources over time to meet the needs of its expanding rollout program.
“We have now established key contract terms and conditions to allow us to streamline the process of engaging new contractors as the pace of work accelerates,” said Steffens. Under the contract Downer will be responsible for the rollout of the passive network from the fibre access node FAN to the box outside the home ready to connect to the network when the occupants order a service from their chosen provider.”
Downer also recently signed a contract worth up to $66 million with NBN Co for design and construction services covering residential apartments and flats in NSW, Victoria and the ACT.