Syntheo hits NBN construction delays

NBN Co CEO Mike Quigley told the Australian parliament that issues with National Broadband Network (NBN) construction contractor Syntheo, delaying the fibre rollout in Western Australia, South Australia, and the Northern Territory, has caused NBN Co to revise its June 2013 target.

The company charged with rolling out the government-owned AU$37.4 billion fibre network had set itself the target of just under 300,000 brownfields premises passed by the network as of June 30, 2013. However, this figure was revised down to 286,000, because Syntheo has had significant issues in rolling out to 25 fibre servicing area modules (FSAM) in the two states and territory.

Quigley told a Senate Estimates hearing in Canberra tonight that NBN Co is working with Syntheo — a joint venture between Lend Lease Group and Service Stream — to help it overcome issues it is having, and ensure that NBN Co can still meet its revised June goal.

"We've had a reduction in October in the forecast. We're working with the contractor to overcome that. We set a target of 286,000, and excepting a few challenges, NBN Co will still meet that target," he said. "We are constantly working with them, if issues arise, to overcome them."

The company has not revealed exactly how far Syntheo is behind, but Quigley said that Syntheo's portion of the rollout accounts for 17 percent of current construction.

The two-year contracts that Syntheo signed with NBN Co for construction in WA, SA, and the NT are worth more than AU$300 million, and Quigley said Syntheo would have already received some of these payments, because the payments are paid up front in phases, depending on where the construction is at, whether it is in the design phase or the build phase.

Earlier in the evening, Department of Broadband, Communications and the Digital Economy officials revealed that the government has so far spent AU$15 million of the AU$20 million allocated in the budget for advertising for the NBN project, but a second phase of this campaign would see the department exceed its original allocation, with AU$9 million more being spent on new TV, radio, and online ads in March and April.

Communications Minister Stephen Conroy said the advertising is needed to "correct misconceptions".

"There's still some work to be done to overcome the lies from those opposite," he told the Coalition senators.

"There are still some misconceptions we need to correct."