NBN Co suspends construction tender

NBN Co has indefinitely suspended all construction contracts for second release sites and accused the construction industry of attempting to fleece the taxpayer over the build of the national broadband network.

In an explosive press statement released this morning, NBN Co said that the 14 construction companies (see list below) chosen during an RFP process to complete the build had not offered pricing comparable to private sector rollouts.

“We have thoroughly benchmarked our project against similar engineering and civil works projects in Australia and overseas and we will not proceed on the basis of prices we are currently being offered,” said NBN Co’s head of corporate services, Kevin Brown.

“NBN Co is confident it can secure better value for money by going a different route. We have left the option open to continue negotiations at a later stage.

“NBN Co is disappointed that the request for proposals (RFP) has not achieved an acceptable outcome, and we thank the companies who have been involved in the process so far.”

The construction companies had argued that the high prices reflected the lack of resources and skills available due to both the mining boom and re-construction efforts in Queensland.

Brown said he didn’t buy their argument.

“NBN Co does not regard current pricing reflects capacity constraints in the industry,” he said.

The decision puts greater pressure on NBN Co to form a definitive agreement with Telstra to lease its passive infrastructure – pressure Telstra is likely to exert at the negotiating table.

Construction companies on NBN Co panel:

• Communications & Fibre, a division of Cut and Fill Pty Ltd
• Connect X Joint Venture (Abigroup Telco & Energy a division of Abigroup Contractors Pty Limited and UGL Infrastructure Pty Ltd)
• ETSA Utilities
• Jemena Asset Management
• John Holland Pty Ltd and Conneq Infrastructure Services (Australia) Pty Ltd Joint Venture
• McConnell Dowell Constructors (Aust) Pty. Ltd.
• Monadelphous and Instalaciones Inabensa Pty Ltd Joint Venture
• Powercor Network Services
• Silcar Pty Limited
• Syntheo Joint Venture (Service Stream Holdings Pty Ltd and Bovis Lend Lease Pty Limited)
• Telstra Corporation Limited
• Transfield Services (Australia) Pty Ltd
• Visionstream Australia Pty LTD
• Downer Kordia Tenix Joint Venture (Downer Edi Engineering Pty Ltd, Tenix Australia Pty Ltd and Kordia Solutions Pty Limited)