NBN sending contractors broke: Turnbull

NBN sending contractors broke: Turnbull

Summary: Australia's Shadow Minister for Communications Malcolm Turnbull has accused the federal government's NBN plan of sending its contractors broke, missing its targets and blowing out the budget.

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TOPICS: NBN, Government AU
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Shadow Communications Minister Malcolm Turnbull has asserted that Labor's plan for the National Broadband Network (NBN) is sending the contractors building it broke.

"There are contractors that are literally going broke or are on the verge of going broke. Sub-contractors cannot make ends meet; people cannot do work for a sustained period at a loss. Service Stream — it's one of the biggest contractors — its listing is suspended on the stock exchange," he said in an interview with Sky News.

Turnbull did concede that contractors had been "a bit optimistic" in their tendering for the NBN rollout.

"They are saying the volume of work is much reduced from what they were promised — so they have never been able to get the economies of scale. And also they acknowledge that they did take on work at the outset that was barely profitable, or not profitable in their view, in the hope that they would make it up on variations.

"And that hasn't happened."

In March, Service Stream's joint venture with Lend Lease, Syntheo, pulled out of the NBN construction in the Northern Territory, causing further delays in its rollout.

Service Stream called a trading halt in June while it addressed the issues with Syntheo, which continued to struggle with meeting its NBN construction targets.

Earlier this month, Syntheo was reported to have made a substantial material loss in the 2013 financial year.

At the NBN switch-on in Brunswick, Victoria, yesterday, Australian Deputy Prime Minister and Minister for Communications Anthony Albanese denied these claims, saying the NBN is hitting its targets in terms of budget and rollout schedule.

While NBN Co did reach its targets for June, those targets were ambiguous, as the company included in its numbers premises passed that are as yet unable to connect to the NBN.

The deputy prime minister dismissed concerns over the government's disputes with contractors about payments, saying, "What we have had with the NBN is ... disputes over, between contractors and sub-contractors ... If you get someone to come to do the smallest infrastructure bit of work in your home, guess what? They'll always ask for more, and that is the way the system works," he said.

He added that Labor's NBN would freely deliver FttP to 93 percent of Australia.

"Now that is a lie. It's not free," Turnbull said in response. "If you want to have a service on Labor's NBN or our NBN or anyone's telecom network, you're going to have to have an account with somebody. Telstra or Optus or whoever. So that is outrageously false and terribly misleading."

Albanese today repeated the government's accusation that the Coalition's NBN model would cost customers up to AU$5,000 to connect the fibre from the node to their premises, jumping on Turnbull's concession that "a charge of some thousands of dollars" would exist under a Coalition FttN connection.

"I can only give you the example from the UK the cost of getting fibre on demand is around £1,500, which I think would work out at around AU$3,000. So it is not AU$5,000," Turnbull said.

NBN Co CEO replacement

In regards to looking for a replacement for former NBN Co CEO Mike Quigley, who flagged his upcoming retirement two weeks ago, Albanese said that the government is in no hurry.

"I have seen no impediment towards decisions being made," he said. "That is a decision for the board. Politics should not get in the way of this project."

Albanese took up the communications portfolio last month, after Stephen Conroy resigned following the re-election of Prime Minister Kevin Rudd.

Earlier this month, Albanese admitted that he is "no Bill Gates" and not a "tech head". As such, he has three ministers to assist him: Regional Communications Minister Sharon Bird, Parliamentary Secretary for Broadband Ed Husic, and Minister Assisting for the Digital Economy Kate Lundy.

Husic told ZDNet last week, "The four of us can get out and about. People who are on the NBN or are familiar with the issues, they get it, they get the value, but the challenge for us is to get more and more people on board."

Topics: NBN, Government AU

Corinne Reichert

About Corinne Reichert

Corinne is sub-editor across all CBS Interactive sites, and joined the company after completing her degrees in Communications and Law, and undertaking a string of internships in law and journalism. Corinne is also a journalist for ZDNet.

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Talkback

17 comments
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  • If you revise them low enough and..

    change the definition you can meet any targets.

    June 30 2013
    Corp Plan I 1.3m
    Corp Plan II 350k
    Mar 2013 revision 190k

    Announcement had to include 55k of 208k "premises passed" where no service can be ordered for up to 18mths.

    Wireless half forecast, contractor & asbestos issues.

    Corp plans in tatters; yet ministers still saying on target and budget. I don't know why anyone keeps reporting this BS without a wink.

    Active connections well below estimates a paltry 70k (most non-fibre); revenue must be negatively affected. Maybe someone will start asking these questions.
    Richard Flude
    • Not a good record

      So how many connections have the Coalition completed since Telstra informed them that an urgent overhaul of the network was needed? That is they didn't do soon it would cost a whole heap more and take 10-20 years to replace it?
      Pilfer-52cec
      • NBNCo's failure

        is the fault of the coalition? Bizarre.

        Still waiting for that position you claimed you interviewed me for?
        Richard Flude
        • ....

          Yes it is Coalition Party failer, because Coalition Party wants to buy Telstra copper back So they can rollout their network faster?

          But won't tell us how much the Compensation will be.

          Turnbull is bullshitting again.
          DanielZenno
        • Yes...

          Because the Coalition was in power at the time Telstra informed them that there was an urgent overhaul needed. Don't be disingenuous, Richard.
          meski.oz@...
          • They were

            Actually they were. 2003 or 4.
            myne-819b4
    • Dear Dear!

      You're very monochrome Richard. Are all your responses so negative? You must have millions of friends with an attitude like that.
      However, in this instance you are completely correct. Labor is 'screwing the pooch in public' on this which says to me they need more practice in opposition. It's sad because, the idea of delivering fiber to 93% is a good plan that will surely alleviate the problem of domestic data transit this country suffers from.
      From the outset, they shouldn't have gone with the cheapest tender. My guess is that the contractors are screwing over the subcontractors and so on up the line. After what I heard one installer say he was getting paid I'm certain that that is the case.
      ravsta
      • Don't need sycophants

        "You must have millions of friends with an attitude like that.
        However, in this instance you are completely correct."

        Doesn't take much to be popular with the confederacy of dunces; pander to their groupthink and stupidity. But why?
        Richard Flude
        • Personal attacks...

          are the last refuge of those without solid arguments. I guess thats why you almost never actually stay on topic (or are you really that random in "real life" as well?)
          Tinman_au
      • re: Dear Dear!

        "From the outset, they shouldn't have gone with the cheapest tender."

        If they hadn't, Richard would be on about NBN Co not going for the most cost effective tender....he's just that kind of dude...
        Tinman_au
    • ....

      So what has Coalition Party done for us?

      It sold Telstra?

      Here you are bantering on about one party so called mess, and not the other.

      It's about time you people wake up to reality.

      Coalition Party Sold Telstra, didn't reinvest it, instead spent on vote buying.

      Ericsson is the same company that did the Telstra Wireless, NBN is using mostly the same contractors as Telstra and here you are whinging and whining about the progress of the NBN.
      DanielZenno
      • Bantering about NBNCo failure

        Predictable from the beginning. All posts abused by talkbackers (now sulking over at delimiter with remaining fanboys), links to signs of failure receiving the same.

        Issues with Telstra have also been discussed as have failures of coalition telecom policies.

        NBNCo wireless is a distaster. The risk carried by taxpayer. What decissions a private company make is their shareholder risks.

        Selling Telstra was a terrific move, competition had greatly improve services and prices since the introduction of Optus. I'm against a govt FTTN network as well, but it is a least deliverable (plenty overseas examples) and budget realistic.

        Cable access negotiations will be the first test; expect me to as vocal re taxpayers money. As mentioned before their timetable is very aggressive.
        Richard Flude
    • No sympathy

      Firstly Malcolm make reference to the quote:

      "He added that Labor's NBN would freely deliver FttP to 93 percent of Australia."

      And says it's not free. IT IS. There is no cost directly to the end user. He goes on to say that to get broadband you have to sign up to an ISP. HUH DUH. When I had to get my telephone line connected it cost me nearly $300. THEN I have to pay line rental. THEN I pay for voice calls and an internet plan.

      FttP is connected to your premises FREE TO YOU. Yes you have to pay voice calls and internet plan, but the connection costs LESS (free). Are people stupid enough to listen to his spin on this?

      Then he goes on to say 1500 pounds ($3000) would be the rough cost under the coalition. What a load of BS!

      The UK HAS IN PLACE a crapload of Fibre Nodes. The distances are WAY smaller to get to a premises. He HIMSELF has compared the cost of the current NBN saying fibre connection costs cannot be compared to a more densely populated country.

      Now he's flipping? Costs ARE as cheap as long as you vote Liberal?

      WTF?

      The gnome speaks again.
      Ramrunner-5dd3e
      • Nice try Turnbull

        Turnbull's wildly distorted "facts & figures" are constantly being quoted as though they were honest.
        The same Turnbull that stated the current NBN will cost 100Billion in order to cover his "one third the cost" BS
        the same Turnbull that just the week before his NBN launch was in complete agreement on air with A Jones' rant that we don't need an NBN as wireless is all that's required.
        The same Turnbull that invests his money in FTTP in France & Spain but claims FTTN is good enough for us.
        Turnbull's many claims don't even match a used car salesman's credibility standards.
        But then what else could we expect from a technically clueless merchant banker other than assisting Murdoch & other media groups in their attempts to "Destroy the NBN" that threatens their business interests?
        Sultanabran-
  • Sub-contractors go broke

    Sub-contractors go broke everyday, that's because of the tendering system that is endemic in the construction world.
    The lowest bid gets the job and when two Sub-contractors work at cross purposes on the same job, it all ends up in court. With the developer back charging evrybody and the consumer having to fix the rubbish by employing a Remedial builder, because the original Sub-contractors file for bankruptcy.
    jodyjdw
  • Reason

    Step back and look at Telstra's machinations since they were forced into the agreement. IMO subtle and ongoing sabotage and delaying of the FTTP rollout, 2010 they were hoping for a Lib win and destruction of the NBN, now banking on a Lib win in 2014 and regaining an absolute monopoly and control of the goose that lays the golden egg.
    Libs give the illusion of supporting competition, have a closer look, Corporations prefer Monopolies or Duopolies in their field with a competitive service sector to keep THEIR costs down and profits up, so use the competition illusion to screw the worker contractor, subcontractor and the smaller service companies and cry poor for taxpayer assistance
    Abel Adamski
  • Malcolm's getting sloppy

    From the articl:

    He added that Labor's NBN would freely deliver FttP to 93 percent of Australia.

    "Now that is a lie. It's not free," Turnbull said in response. "If you want to have a service on Labor's NBN or our NBN or anyone's telecom network, you're going to have to have an account with somebody. Telstra or Optus or whoever. So that is outrageously false and terribly misleading."

    NBNCo's FTTP will be connected for free Malcolm, the Internet wont be, but even if you don't get the Internet, you'll still be able to get government services and health on the last port.

    Your fibre, on the other hand, could cost a lot more than $3,000 and incur a monthly fee, if your going with the "UK plan".

    http://www.openreach.co.uk/orpg/home/products/pricing/loadProductPriceDetails.do?data=0WyIM7tTGGgucFf0dXUIWK4XSAplAmgrRZNg5Pk%2B5%2F%2BkRgB7BL4KNYn%2FlKx2YB4Qe6YShZ82RgLO%0AGLsH2e9%2Bmw%3D%3D
    Tinman_au