NBN Co chief expects build to stay on budget

By Ry Crozier on May 6, 2011 2:25 PM
Filed under Telco/ISP

Labour costs remain uncertain.

NBN Co chief Mike Quigley has stated his expectation that the national broadband network can be deployed without blowing the $36 billion budget, despite delays in awarding construction contracts.

Speaking to the ABC's 7.30 program last night, Quigley was forced to defend NBN Co's decision to suspend its mainland construction tender over value-for-money concerns.

He denied suggestions that NBN Co had "significantly underestimated" mainland construction costs and that suspending the tender could lead to a cost blowout.

But Quigley declined to reveal the gap between the cost estimates of construction tenderers and NBN Co, stating that negotiations were still underway.

"We're still in the process, which is why I obviously won't talk about it in specific numbers," Quigley said.

"Once we've completed this process, it'll be clear whether we can get the network built or not at the cost we expect.

"And as I have said repeatedly, we are looking after the taxpayers' funds. It would be very easy for me, by the way, just to sign up a number of companies at costs above where I think they should be. I won't do that."

While saying he "would not allow" costs to blow out, Quigley conceded that labour costs were still "hard to predict".

However, he indicated that NBN Co may not agree to a variable cost structure when it strikes a construction deal.

"We may look at how to get a commitment for some level of fixed costs," Quigley said.

He said he could not guarantee costs would not rise or fall. "What we will be doing is balancing those as the project progresses," he said.

NBN Co chief expects build to stay on budget

4 comments in this discussion

"When we first supported the concept of an NBN (through senate, industry submissions etc), a key attractions was it would bridge the digital divide - those poorer communities not able to afford the ..."

By Rossyduck

Tags

nbnco, chief, mike, quigley, construction, tender, suspend, budget, blowout

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Comments: 4

Rossyduck May 6, 2011 3:41 PM	The $40billion question: If they are so worried about unnecessary spend why overbuild perfectly good broadband and why not rather focus on those areas that have nothing ?. Why not use our tax $ to bridge the broadband divide, particuarly in the rural areas instead of now trying to charge rural towns for the pleasure of having an ineptly designed overly expensive network installed ? The rural folk must be really steaming - paying tax for this clowns urban empire and having to pay again directly to get it installed in the areas that really need it. Lunacy aside (maybe not) these clowns are continuing to live in their inexperienced arrogant little dream world where they can dictate the terms to installers and not expect thme to take the money and engineer an election defeat. - edited at user's request. Edited by rycrozier: 6/5/2011 04:33:07 PM
umbria May 6, 2011 8:40 PM	Rossyduck, in case you haven't noticed, they are starting in underserved areas first. Optus and Telstra HFC customers will be the very last to see fibre, for which they will be absolutely screaming by 2020. The most remote can only get satellite, and the satellites will take a couple of years to construct, which is why a 6 Mbps interim service is being rolled out to them in 2011. And most rural folk are still forced to pay STD rates for every call they make because they can't get adequate broadband to sustain VoIP calls. It is great to see your earnest desire to give rural Australians the communications infrastructure worthy of our wealthy nation, which the free market has denied them to date.
Francis May 9, 2011 9:49 AM	@Rossyduck. I keep reading your comments and can not understand why you are pushing this line. One thing everyone conveniently overlooks is the simplicity of Fibre. Yes we already have a couple of HFC networks which could be used to provide a service and reduce the cost of the NBN Network but what a lot of people do not understand is that it is old technology and was so when the cables were erected in the first place. The next point is the comparability of connecting all these systems together and how well such a ramshackle system would work. If we then have a look at Telstra as an example, they have so many different technologies it is not funny. Plain Copper, POTS (Plain Old Telephone System), ADSL, ISDN, Fibre, Cable and now a Fibre backbone for the HFC network and so the list goes on. To service all these technologies they need a number of different departments as they all require different people with different skills to install and service them, not to mention that each requires its own inventory of spare parts further inflating the cost. So you see a Fibre NBN is at the end of the day simple and efficient because it is one technology from end to end. Then there is the problem with the name - NBN - this implies that it is just about an internet connection which it is not. It is to replace all our communications networks from Phone through Pay TV to Internet with one modern technology. So the Name NBN is a misnomer and I would suggest that the Name be changed to - NCN - (National Communications Network) as that is what it really is. So lets stop fighting over yesterdays technologies and move forward with one technology, the NCN and stop all this silly squabbling.
Rossyduck May 9, 2011 11:25 AM	When we first supported the concept of an NBN (through senate, industry submissions etc), a key attractions was it would bridge the digital divide - those poorer communities not able to afford the cities, indigenous settlements and even farming communities - would be drawn into main stream society. Now we have an elitist network hollowed out by sleigh of hand and people beleiving their own spin - to the point where it is presented as magnanimous allowing these poorer rural communities to get taxed, and then pay extra to get the same network that the urban dwellers are getting, when they do not immediately need it. Rather pass legislation to benefit all carriers and not just exclusively NBN Co, use scare resource to provide competitive backhaul to rural locations and then use the resources to encourage the market ... and start questioning what this travesty of an NBN Co is actually offering the country and are there better ways to achieve its ends. .. and what it is actually taking away. Having given Telstra taxpayer funded infrastrucutre and now letting them off the hook is just one example of any body other than city dwellers being worse off.