NBN Co renews Silcar's NBN construction contract

Summary:Despite being in the middle of an election campaign, NBN Co has renewed Silcar's NBN construction contract for NSW, Queensland, and the ACT in a deal worth AU$300 million.

Silcar has had its contract with NBN Co renewed for one year to continue construction of the fibre portion of the National Broadband Network (NBN) in Queensland, New South Wales, and the Australian Capital Territory, in an agreement worth AU$300 million for the Theiss company.

The deal was reportedly struck on Monday, just before caretaker provisions kicked in for the election campaign, which would have prevented NBN Co from signing any major contracts that a potential Coalition government would then have to honour.

Silcar, which has been viewed in the industry as one of the more successful NBN construction partners, will continue work on the project to build the local and distribution networks out to premises across the two states and the ACT for the next 12 months under the deal.

The 2011 deal struck with Silcar was initially worth AU$380 million for the first two years, with the option for renewal for a further two years at an additional AU$740 million. The value of the one-year extension represents less than half of the two-year extension at AU$300 million.

An NBN Co spokesman would not confirm to ZDNet the value of the contract, instead directing all questions on the deal to Theiss, the whole owner of Silcar, after Siemens recently handed over its stake in the company to the Leighton Holding's subsidiary. A Theiss spokeswoman confirmed the value of the contract at AU$300 million.

The government-owned company's spokesman would also not confirm a claim in The Australian that the Silcar contract extension was worth 20 percent more than originally planned in order to cover rising labour costs for rolling out fibre.

It came two days after news broke that NBN Co's construction partner in Western Australia and South Australia, Syntheo, would not take on any more construction work for the company .

The Silcar contract is the second announced by NBN Co since the election campaign commenced , and the second believed to have been signed just prior to caretaker conventions kicking in. When questioned on whether any other contracts had been signed prior to caretaker conventions being enacted, NBN Co's spokesman did not respond.

Any contracts relating to constructing the fibre-to-the-premises network would likely bind a potential Coalition government into completing that portion of the construction, despite the fact that the Coalition's policy is for most premises to be connected to the NBN via fibre to the node.

ZDNet asked a spokesperson for Shadow Communications Minister Malcolm Turnbull yesterday about whether the contracts signed before the election are a concern to the Coalition, but no response has yet been received.

In a doorstop interview this morning, Communications Minister Anthony Albanese confirmed a tweet from last night that he is prepared to debate Turnbull on NBN policy before the election. No date or venue has yet been decided; however, Turnbull has indicated that the National Press Club in Canberra is interested in hosting the debate.

The venue was the location for the 2010 election debate between then-Communications Minister Stephen Conroy, then-Shadow Communications Minister Tony Smith, and Greens communications spokesperson Scott Ludlam.

Topics: NBN, Government, Government : AU

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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