One NBN contractor against the rules: Libs

One NBN contractor against the rules: Libs

Summary: Shadow Communications Minister Malcolm Turnbull has warned that appointing a single contractor for network construction on the National Broadband Network (NBN) may go against rules for public sector tendering.

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TOPICS: NBN, Broadband
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Shadow Communications Minister Malcolm Turnbull has warned that appointing a single contractor for network construction on the National Broadband Network (NBN) may go against rules for public sector tendering.

"NBN Co may be considering appointing a "prime contractor" to construct the bulk of the civil engineering portion of the project. If the government and NBN Co do pursue such a strategy, they should do so in a way that adheres to the letter and spirit of existing rules and procedures for public sector tenders and procurement — all potential contractors should be invited to bid for the role in an open and transparent process," Turnbull said in a statement.

This morning NBN Co announced that it was halting the tender process on the construction work for its network, stating that none of the final five bidders had put forward a proposal that was in line with the price that NBN Co was expecting. The company said it was in the process of looking at working with another contractor outside of the final five.

Turnbull said that the failure of businesses to meet the expected costs of the project shows that the economics and the business case of the NBN may be unrealistic and unachievable.

"From the beginning of this vast and risky project, the Coalition and telecommunication industry participants have warned that construction costs were likely to blow out beyond the government's estimates. The government has also repeatedly been warned NBN Co would find itself in contention with the booming mining and energy industries for scarce engineering and construction resources," he said. "So it has come to pass."

Turnbull said today's revelation showed the need for the Public Works Committee to examine the $37.5 billion project, something the government has long opposed.

Topics: NBN, Broadband

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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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15 comments
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  • Let me get this staight!!! The NBN Administrators are being proactive in containing NBN expenditure and Mr Turnbull is advocating they should be spending more money on the NBN rollout. OoooK!!
    Ron123-c6b75
    • no, what he is saying is perhaps the nbn underestimated how much the job was going to cost you moron, and it should be opened to scrutiny. if you want to download your pron a little faster why not pay the premium and get a faster service that already exists without bankrupting the country in the process.
      airtime-91356
      • Hah! You're calling him a "moron" then following it with that party-line drivel? Get the politics out of your arguments it just shows you as the fool airtime.
        rcremasco
      • @airtime: I can only get 1.5Mbps ADSL. So, if this so-called faster service already exists, it doesn't exist in my area. So all I can say for you is: I would if I could! Bring on the NBN, so I can pay a premium and get a faster service!
        RL-079ec
  • I think you should all take the time to read the latest reports on the NBN tendering and the suspension of the process.

    The facts are this federal Government does not have good record on service delivery Peter Garret had an issue with pink batts and the PM school problems so if Turnbull keeps the them focused the better we all are.
    GBE-71384
  • The only traction the NBN has is Leighton/Nextgen dragging the regional blackspots fibre around the country. "Show progress and you'll get more work" is an appropriate basis to move forward with the others.
    Pragmatic-3e05f
  • Umm look, the buck stops with the government of course...

    But in all instances you mention (the latest NBN impasse, insulation, BER) it was GREED from GREEDY private enterprise NOT the government which has caused the actual problem. T
    yes, te government were stupidly naive enough to trust Australians businesses and believe Australians businesses wouldn't "do the wrong thing"...wishful thinking!

    As an NBN supporter I agree it is Turnbull's jobs to keep the ***tards honest. But it's not his job to spin FUD!

    But as I also mentioned elsewhere... in the UK up to 500 000 people were protesting about government spending cuts and at the same time, what do we do... we (well not me per se`) complain that the government are spending ON US... sigh!
    RS-ef540
  • On this post it would be fair to say most are NBN supporters. The reality is wireless Broad Band has had a 50% increase in take up an now sits at 40% rising of all users increasing daily. I would say up to 90% of users have no interest in the NBN.

    So is it the tax payer providing a state of the art internet service free of charge for our wealthy banks and a few doctors and enthusiasts when the reality is the present system is fine for the majority.
    GBE-71384
    • No, i don't believe it is fine for the majority, i would hazard a guess that most of the people who have wireless Internet are those with smart phones who use it while away from home to check emails etc... when at home they need fast wired Internet for the whole family to share. Yes, wireless Internet usage has risen a lot but it's complimentary. NBN is vital. Coming back on topic... the NBN should be able to put pressure on lower costs for laying the cable, there will be pressures the other way too so i guess it will balance out according to market forces. As a public building project tho, the government should be able to place pressure such that the overal economy benefits and not just a few company bosses in charge of the contracts.
      aforce
    • @GBE; your maths is poor at best. The 50% represents the margin of increase for wireless. So therefore 40% of Australians are using wireless right now, most of them because they have no other choice. And therefore 60% of Australians use ADSL, 2+ or HFC, and cannot rely on wireless for online gaming, IPTV and cloud computing.

      The present system is fine for the majority? You think 1.5Mbps is fine enough for me? I don't think so! It's best we upgrade now for $36 billion, or we can upgrade to fibre later for twice the price or more.
      RL-079ec
  • Problem with the government & NBN is accountability. By appointing contractors the government wash their hands of accountability & make it the contractors responsibility.
    The contractor then goes and hires sub contractors who the contractor manage. Problem here is the Australian people are not getting best value for money. Rather than duplicate management and duck responsibility what should happen is the NBN contract the sub contractors directly, reducing duplication and saving the tax payers money. However the responsibility then would fall directly on the NBN (Government) and we are all sure they wouldnt want this.
    fibretech
  • I think like the insulation tragedies, the opposition will be out for government blood if things don't go as planned.

    And perhaps in many ways... rightly so!
    RS-ef540
  • Both Malcolm Turnbull, and Tony Abbott, need to keep their mouths shut about Probity.

    Many Contrcts were let by the Former Howard Government, that ran in the face of Probity, and they now have the hide to whinge about being open in contracts.
    Fredsan
  • Mr Malcolm Turnbulls suggestion to engage the Public Works as a "Project Manager", will add approximately 20% to the cost of the project, as he well knows, and cause a massive Blowout in costs, due to lost time claims as well.
    Fredsan
    • "will add approximately 20% to the cost of the project, as he well knows, and cause a massive Blowout in costs, due to lost time claims as well."

      What about the cost of the lost time of the last 12 months evaluating the NBN build tender applications then deciding to start all over again.

      What you think that will will have zero effect on the completion date, zero effect on lost revenue because of the delay in getting the product out there and being sold by ISP's?

      What makes you think the new tender outcome will be more cost effective than the first one?, the intent is to for it to be that way but let's see the result before making any conclusions on that one.
      advocate-d95d7