Days after the CEO of the NBN Co Mike Quigley quit, it has emerged that contractors are now looking an increases in the value of contracts of between 20 per cent and 40 per cent for further work a move that could blow the entire project out to between $60 and $70 Billion.
According to the Australian newspaper several current construction contracts are due to expire between 2013 and 2016 with the NBN Co set to call tenders for the delivery of fibre, fibre links and new developments this year.
Contractors in Victoria and Tasmania, are already claiming they are not being paid enough.
In other developments Labor MPs have been accused of running highly contestable and in some cases ''deliberately misleading'' advertisements for the national broadband network, experts say.
Fairfax Media claims that the Labor advertisements range from blatant falsehoods (saying the Coalition's NBN will cost $5000, while Labor's will be ''free'') to misleading comparisons (comparing the highest speeds possible under Labor's NBN with the minimum guaranteed under the Coalition's) and assertions (that the Coalition's NBN
The most deceptive Labor claim, according to opposition communications spokesman Malcolm Turnbull, was that its NBN was "free" while the Coalition's would cost $5000.
"It's outrageous," Mr Turnbull said. "It's very, very, very dishonest ... and the worst part about it is its being done with taxpayers' money".
The flagship broadband project - a key commitment by Kevin Rudd before the 2007 election - has been dogged by months of controversies and cost blowouts.
Subcontractors are battling the network's main construction partners over better pay conditions.
The Australian revealed in a series of articles earlier this year that low rates being paid to subcontractors were a key reason for delays to the project.
Opposition communications spokesman Malcolm Turnbull said the Coalition had claimed Labor's NBN could blow out to $94bn "because among other things we said that their estimated costs of construction were too low and I think these events are proving the force of our argument".
"Contractors have got to be able to make a margin," Mr Turnbull said. "Obviously, the client doesn't want the margin to be too fat but if it's negative, they go broke and can't do the work. What they've said is they will need an increase of between 30 and 40 per cent to be able to make an acceptable margin. Clearly, the prices they've got at the moment are not viable."