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NBN Fall Out With Contractors

By Oonagh Reidy | Tuesday | 02/04/2013

NBN Co on the war path with its contractors after a series of setbacks forced it to push back its fibre rollout targets by 3 months

NBN Co is at war with several of its major contractors including Silcar, VisionStream and Transfield, according to a report in today's AFR, despite contracting them to do even more work.

Last month, NBN Co, responsible for building the $37.4 billion National Broadband Network said rollout of fibre optic cable to premises would be delayed  by "about three months", blaming contractors for having to push back targets.

According to secret documents seen by AFR, NBN Co criticises contractors for their "poor management skills" and other shortcomings, including lack of worker expertise in fibre splicing for the embarrassing delays to the fibre rollout, nationally, which has led to major criticism of one of Australia's biggest ever infrastructural projects, championed by the Labor government.

The confidential NBN Co documents also show contractors had "a lack of specialised workers" which "led to failure in the fibre splicing process" which is an essential part of the fibre rollout process. 

Contractors were also providing NBN Co inaccurate information regarding rollout progress including Transfield in Victoria, and were also badly paying workers. 

"It's not about labour shortages." Quigley said last month, who publicly blamed contractors for failing to hire sufficient staff numbers.

"The problem is we are just not seeing the ramp up of construction workers on the ground that would be needed to deliver these targets."

NBN Co has been forced to take over the rollout itself in some cases, including in NT.

In addition, the fibre splicing had to be redone in other areas, following poor execution the first time round, due to the lack of expertise in fibre splicing by some contractors, who all submitted detailed tenders before being awarded contracts worth millions of dollars.

Last month, NBN CEO also insisted the cost of the project which is veering on $37.4bn mark would not increase, despite the time delays. 

But the AFR report also suggests $1bn worth of extra contracts has been awarded to contractors, although a NBN Co spokesperson was not certain how this $1bn figure was calculated saying all new contracts awarded are in the public domain, when contacted by SmartHouse.

Last week, NBN Co announced a $170m contract to Transfield Services to roll out fibre optic broadband in Sydney areas, along with several others, but said its value is factored into Corporate Plan targets.

The spokesperson also refused to make any comment about today's report, which raises serious questions about the competency of the contractors taxpayers are forking out millions for, to hook Australia up to high speed fibre broadband services.

NBN Co's spokesperson also said there was no announcements forthcoming about additional contracts being awarded to contractors, saying they are done on an ad-hoc basis.

The government funded broadband company recently highlighted a report published last week, which shows support for the fibre optic broadband is at 69%.

However, another report by the same research group also suggest the Coalition is the favourite to win the next election, meaning the NBN project may be in danger, if the Liberal party and Malcolm Turnbull, get their way.

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