NZ: Transfield says it will pay UFB subcontractors

Summary:The New Zealand government is putting the heat on an Australian company that hasn't paid subcontractors for work they've done on the Ultra-Fast Broadband rollout.

Australian company Transfield Services has said that it will pay its New Zealand subcontractors working on the Ultra-Fast Broadband (UFB) rollout within two working days.

The company said it has already paid one third of the outstanding amounts, and will be telling the other subcontractors on Friday when they will receive their payment.

Transfield has a 10 percent share of the government's NZ$1.3 billion UFB rollout.

It hired dozens of New Zealand subcontractors to dig ditches and lay cables, but work has ground to a halt, with workers laid off because no payments were received for several weeks.

Communications Minister Amy Adams put pressure on the company to meet its commitments, saying on Thursday night that it should pay the subcontractors as quickly as possible.

Transfield's chief executive Nicholas Yates hasn't explained what went wrong, but said it has "found a solution" to the problem.

"We're concerned and disappointed it has escalated to this level," he said in a statement on Friday.

"We apologise for the disruption caused."

The situation became confused over the last 48 hours, with reports that Transfield had told some subcontractors to suspend work because further design work was needed on ducting pipes.

That was disputed by Christchurch company Enable, which is doing the design work for the rollout.

It said Transfield had nothing to do with design, and there was no reason why cable laying should be suspended.

Paul Brislen, chief executive of the Telecommunications Users Association, said he believed cost overruns could be the problem.

"That seems to be at the heart of the matter right across the UFB deployment," he told Radio New Zealand.

"What it boils down to, as far as I can tell, is under-bidding for a contract you know you can't fulfil, but because it's a government initiative you can go back cap in hand and ask to be propped up."

The issue reached parliament on Thursday, with Labour's communications spokeswoman Clare Curran saying the government should be more hands on.

"Hundreds of workers laying out broadband fibre around Hamilton, Tauranga, New Plymouth, Nelson, and Rotorua have not been paid for weeks," she said.

Topics: Networking, Broadband, New Zealand

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