Key National Broadband Network (NBN) construction contractor Transfield Services has appointed NBN Co's deputy chairwoman Diane Smith-Gander as its new chairwoman, forcing Smith-Gander to resign from her position at NBN Co in order to avoid any conflict of interest.
Smith-Gander was one of five directors appointed to NBN Co's board in 2009 by then-Communications Minister Stephen Conroy during the initial formation of the government-owned company, along with NBN Co's new chairwoman Siobhan McKenna. McKenna and Smith-Gander were the only remaining two on the board out of the five, and Smith-Gander's position on the NBN Co board was due to expire on August 4, 2015.
Smith-Gander will replace outgoing Transfield chairman Tony Shepherd, who has said that Smith-Gander has a "strong knowledge of [Transfield's] business" and would continue to oversee the turnaround of the company.
The decision to leave NBN Co was a move to "avoid any perceived conflict of interest with Transfield Services' role as a lead contract on the NBN project", according to Transfield.
Her resignation comes just days before the federal election on September 7. If the Coalition wins the election, Shadow Communications Minister Malcolm Turnbull has indicated that he would likely make changes to the NBN Co board. In response, McKenna has secured the services of lobby group Bespoke to put the current board's case to Coalition MPs.
The news comes as one of NBN Co's other key construction partners and joint-venture partner of NBN construction contractor Syntheo reported on Friday a loss of AU$19.5 million in its fixed communications division as a result of trouble meeting NBN Co's construction requirements of Syntheo.
The company said it had determined that "the unavoidable costs of meeting the obligations under its contracts with NBN Co Limited exceed the economic benefits expected to be received under it". Since then, Service Stream has handed off control of Syntheo and its obligations to NBN Co over to joint-venture partner Lend Lease.
"The Australian government's investment in the National Broadband Network will continue to drive opportunities for fixed communications, particularly in the areas of its proven competence, such as new estates and customer connections."
Earlier this month, Syntheo announced that it will not seek to extend its construction contracts for the NBN in South Australia or Western Australia.