NBN Co renews Silcar's NBN construction contract

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


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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  • Boy are they going to get a kicking if the coalition win

    "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."

    I bet they didn't. Revolting.
    Richard Flude
    • Considering

      NBNCo will be tasked with turning the LNP's mish mash into a working finished Core National Communications infrastructure, and considering the person M.T is showing himself to be, especially in the comments


      And the close detailed investigation by us of LBN's performance and we will especially be judging M.T's favoured appointments. Expect a very high turnover at all levels after the election, who would want to be the suckers, they are the cream of the crop and will have no problems moving on
      Remember this is Australia's essential National infrastructure and the Taxpayer can't be expected to be constantly subsidising or paying Billions to upgrade the Copper patchwork every decade or so. So the NBN management and team better deliver for the Nation not just vested interests or ideologies. We will be watching

      Consider how you watch and judge based on biased reports, we will judge on achievements and results for the long term and we will be looking at maintenance, repairs and the power bill, and upgrade costs
      Abel Adamski
      • Every report of failure is biased (News Ltd, Fairfax,ABC, Delimiter...)

        What positive story is there for NBNCo? How can their turnover rate be any higher? What senior manager remains?

        Seriously who cares about Turnbull PM ambitions or the fanboy posters over at delimiter (thank goodness HC, RS have sulked back after being so wrong and abusive for years).

        If they represent the "cream of the crop" no Australian company has any chance of survivial.

        the project was badly thought out (another Kev-Conroy thought bubble), management entirely political with zero infrastructure experience (telling untruths immediately after his appointment about his past), failed to deliver on every important metric yet still bonuses paid every year.

        A 50+ person media team! WTF?

        If any if its 3k employees are kept after the election I'd be shocked, regardless of result. It's pink batts, BER on steroids. Conroy's vile abuse no longer protecting them.

        The Liberal promise of an audit had the NBNCo board not only call in lawyers (at taxpayers expense of course) , but contracted political lobbyist. I've never seen anything like it; IMO I'd be surprised if there isn't prosecutions.
        Richard Flude
        • Interesting comment to make in writing on line

          "management entirely political with zero infrastructure experience (telling untruths immediately after his appointment about his past)"
          Abel Adamski
        • Really?


          Simon Hackett does however make a very good argument, this however highlights the problems the ACCC created with their 121 POI's
          Abel Adamski
  • Back to subject - Why?


    Now Contractors and operations are sorting out
    Abel Adamski
  • What is it all about.

    From my perspective of many years in Transmission and Transmission systems and networks rather than IT or Data background.
    I have considered the NBN is actually misnamed it is a National Transmission Network. It should have been named the National Communications or Information Network which of course includes "Broadband" whatever the term actually means at the time, this would have shifted the perspective and evaluation of the Debate

    The absolutely key differential has not been discussed and that is not a Data stream Factor, but rather a transmission factor and as such has not truly been appreciated.
    That is that with FTTN the 2.5 Gb SPECTRUM available (which can include a spectrum (wavelength) band dedicated to multicast at a reduced cost) will be decoded into discrete streams per user for Electrical transmission on pairs or encoding back to light for FTTP . Certainly some of that could be multicast, but splitting 25Mb or oven 100Mb for a multi user premises is limiting .

    However with GPON FTTP that whole 2.5Gb (or 10, or 40, or 100) is split to each subscriber and the NTU decodes their service, that 4 port NTU can decode 4 discrete separate services.
    Remember 10Gpon now available 40GPON soon and 100GPON by the time it is built.

    This may appear inconsequential at this time but so many possibilities are made possible apart from just multicast Video including high quality 4K not just low quality compressed versions, such as public service (government services), community services (within the Fan) etc etc.

    That is what it is actually all about an enabler for what is yet impractical or just a dream to become practical profitable realities

    It is the capabilty for future evolution of services that is the differentiating factor
    Abel Adamski