news Shadow Communications Minister Malcolm Turnbull has called for the Federal Government to “immediately” commit to auditing the National Broadband Network rollout following reports that NBN contractors have stopped work in Ballarat, in news that represents the latest blow to the project’s already delayed rollout schedule.
This morning the Financial Review reported that a legal dispute between NBN construction contractor Transfield and one of its sub-contractors had resulted in work in Ballarat stopping, with an associated legal dispute dating back to May. The news represents only the latest delay to the NBN rollout, which is already substantially behind due to a combination of factors including prolonged negotiations over access to Telstra’s infrastructure and disputes with contractors in locations such as the Northern Territory and Western Australia.
“Anthony Albanese must immediately commit to an audit of the NBN rollout following reports that construction has stopped in Ballarat,” Turnbull said in a statement released yesterday. “Labor cannot continue to say this project is running on time and on budget when contractors are losing money and subcontractors are walking away from work.”
“The Coalition is committed to completing the National Broadband Network but will ensure the network is finished sooner, is cheaper for taxpayers and is therefore more affordable to consumers.
Labor’s fibre rollout has reached only two per cent of households after four years. On current construction performance, Labor’s NBN will increase wholesale user charges threefold by 2021 and take up to 20 years to complete.”
Turnbull said Labor was yet to re-sign one of its key contractors, Silcar, for the company’s rollout in NSW, Queensland and the ACT, despite there being a June 30 deadline for finalising arrangements between the pair. “In Western Australia and South Australia, prime contractor Service Stream has commenced a trading halt and subcontractors are ripping out work already completed,” said Turnbull.
There are also other questions currently being asked about NBN Co’s progress in its rollout. Several weeks ago, NBN Co confirmed it had met its revised targets for the rollout of its fibre network to the end of June, revealing that at the end of last month it had connected a total of 207,500 premises; a figure in the middle of its target range of between 190,000 and 220,000.
However, in the media release announcing the results, NBN Co itself called the figures into question. NBN Co stipulated in its statement that it was using what it described as “the accepted industry definition of ‘Premises Passed’”, consisting of premises passed by an active telecommunciations network. However, the company also noted that this measure included “those complex premises” that would receive services over the NBN outside of “standard order lead times”. This means that of the premises passed by the NBN, not all will immediately be able to order NBN services from retail ISPs.
NBN Co is taking steps to bring its rollout up to speed. The company announced yesterday that it had awarded SA Power Networks a three-year contract to rollout fibre in an area covering about 300,000 premises in Adelaide and regional South Australia. Up to 400 staff will be working on the contract at its peak. Syntheo, a joint partnership between Lend Lease and Service Stream, is also undertaking construction work in South Australia, and has been doing so since November 2011.
“SA Power Networks, formerly known as ETSA Utilities, built the NBN first release site in Willunga, 47 kilometres from Adelaide near the McLaren Vale,” said NBN Co yesterday. “At the start of June, 63.4 per cent of eligible residents in Willunga were active on the NBN. The average take-up for fibre locations active for more than six months is more than 30 per cent.”
The Coalition itself has already promised to conduct a number of reviews into the NBN if it takes power in the upcoming Federal Election.
Firstly, the Coalition would conduct a rigorous review into NBN Co’s current commercial progress; a document that would also contain options to meet the Coalition’s different policy objectives. Secondly, the Coalition would conduct an independent audit into how “Labor’s costly NBN was designed with no cost-benefit analysis or any consideration of other options”. Lastly, a Coalition Government would conduct an independent review into the long-term structure and regulation of telecommunications in Australia.
Look, I have to say that I agree with Turnbull in this case. It’s time the NBN had a comprehensive audit. This kind of thing won’t slow down the rollout, but it is time we got a decent look at the actual state of the project, four years down the track. There are enough worrying signs coming out of NBN Co right now that any government auditor would be seeing little red flags waving at them.
This needn’t be a negative thing for NBN Co. Audits every four years or so for major government projects are very normal and to be expected. In addition, with new political leadership for the project, and a new chief executive eventually, it would be good for all involved in steering the project, no matter who they are, to be able to get a comprehensive viewpoint on the NBN rollout. This will make making the imminent round of decisions about it much easier. Decisions based on evidence are always more sound than those made without it ;)
Image credit: Office of Malcolm Turnbull