NBN Co appoints new SA construction contractor amid construction halts

NBN Co has signed up SA Power Networks to provide extra NBN construction capacity to Syntheo in South Australia, while construction of the network has stopped in parts of Victoria and Tasmania amid disputes with subcontractors.

As NBN Co hands out additional construction work in South Australia to SA Power Networks, National Broadband Network some construction activity in Ballarat and Hobart has reportedly stopped amid disputes over payment of subcontractors in those locations.

SA Power Networks will roll out National Broadband Network (NBN) fibre to 300,000 South Australian premises over the next three years in addition to the work already underway in the state by troubled contractor Syntheo.

An NBN Co spokesperson would not say what the value of the contract was, but the agreement will see SA Power Networks design and construct the local and distribution network from a fibre access node through to every street covering the 300,000 premises.

The deal has the option of two one-year extensions, and NBN Co has said that the deal could see up to 400 people working on it at its peak.

The contract does not affect 2011 NBN construction partner Syntheo, which is already believed to be in significant financial difficulty , with joint owner Service Stream in an indefinite trading halt. It is expected that Service Stream will likely end its Syntheo joint venture with Lend Lease, with the latter expected to pick up most of the remaining NBN construction work.

The news comes as it has been reported that contractors constructing the NBN on behalf of Transfield Services have walked off the job in Ballarat in Victoria, claiming that they have not been paid.

An NBN Co spokesperson told ZDNet that Transfield is in "commercial discussions" with a sub-contractor involved in NBN work in Ballarat, and, contrary to reports, work is still ongoing in the area.

"The broader rollout of the NBN is not affected. Work on the NBN continues in Ballarat as it does across Victoria," the spokesperson said.

On the news of work halting, Shadow Communications Minister Malcolm Turnbull said that there should be an audit of the NBN rollout.

"Anthony Albanese must immediately commit to an audit of the NBN rollout following reports that construction has stopped in Ballarat," he said in a blog post.

"Labor cannot continue to say this project is running on time and on budget when contractors are losing money and subcontractors are walking away from work."

Transfield Services had not responded to a request for comment at the time of writing.

It has also been reported that crisis talks are now being held in Hobart with sub-contractors to NBN construction partner VisionStream, again amid disputes over delayed payments.