NBN Halt Tenders As Prices Go Through The Roof

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It seems to be one thing after another. The latest twist in the NBN tale is to do with prices and builders.

 According to the SMH, the NBN Co was forced to suspend tenders negotiations with several major construction firms, including Telstra, bidding for work due to exorbitant pricing schemes.

The builders were bidding for work laying cables for the fibre network, which is said to be a costly exercise, around $12 billion.

However, the NBN believes the 14 companies involved were purposely driving prices up, with the intent of gauging excess profits from the government backed project, which, when completed will cost around $36 bn.

Telstra, John Holland, Transfield and EDI are reported to be among the players involved in the bidding process with the NBN Co.

The NBN Co, who is already under pressure over costs from the opposition and other detractors, have refused the higher price scenario as fair value, and maintain they will seek best value for money for taxpayers.

This comes after five months of negations with the bidding firms. The prices would have added an extra $3.7bn on to the price of the project, according to reports.

The industry had made the case for higher prices arguing capacity constrants and spiralling wage costs were boosting costs.

The broadband company are now said to be working on a ‘Plan B’ for the fibre network build.

 

”Current pricing, in our view, does not reflect capacity constraints in the industry,” believes NBN Co head of corporate services, Kevin Brown.

Telstra  is already set to make a mint out of the NBN and has agreed a $11bn deal with the broadband company over the transfer of its copper network, which has yet to be approved by its shareholders later this year.

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