NBN Co chief expects build to stay on budget

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NBN Co chief expects build to stay on budget

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.

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