Opposition communications spokesman Malcolm Turnbull, a vocal critic of the $ 36bn NBN has called on the Communications minister to explain where the newly stalled NBN tenders leaves the project.
“Senator Conroy must immediately explain the implications of NBN Co’s failed tender for civil works at forthcoming NBN rollout sites for Australian taxpayers,” Turnbull said in a statement today.
He is also demanding answers on costs and timescale, fresh from the news today that the NBN Co was forced to suspend tenders negotiations with several major construction firms, including Telstra, bidding for work due to their exhorbitant pricing schemes.
“Does the admission that none of the major Australian construction groups in the tender were willing to do the work at NBN Co’s target price indicate that the network’s economics and business case are unrealistic and unachievable?” Turnbull said.
However, it seems the construction companies were purposely driving prices up, with the intent of gauging excess profits from the government backed project, the NBN believes.
And if so, it was probably right to tell them where to go since it would mean inflating the cost of the gigantic project by over $3bn, a price taxpayers, ultimately, would have to fork out for.
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. Turnbull also believes the NBN were warned of this impending costs crisis.
”Current pricing, in our view, does not reflect capacity constraints in the industry,” believes NBN Co head of corporate services, Kevin Brown.
“The Government has also repeatedly been warned NBN Co would find itself in contention with the booming mining and energy industries for scarce engineering and construction resources.”
The shadow comms minister wants a cost benefit analysis to be conducted and scrutiny by the Public Works Committee.
The broadband company are now said to be working on a ‘Plan B’ for the fibre network build. Quite possibly a ‘prime contractor’ to construct the bulk of the civil engineering portion of the project.
If so Turnbull insists it should go through the same public sector tenders and procurement process and “all potential contractors should be invited to bid for the role.”