NBN Co, contractor relations weaken further

The relationship between NBN CO and its contractors is becoming increasingly strained, with confidential NBN working documents showing a growing bitterness between the two sides amid rollout delays, according to The Australian Financial Review.

The documents were prepared for senior NBN Co executives and, for instance, say efforts by contractor Silcar to blame Telstra for delays in the broadband network's construction “need to be refuted at all levels”, the AFR reported.

In addition to delays in the network's construction, the documents also show NBN Co is concerned about the amount of newly-completed work that will or may need to be redone. In one case, up to 15 per cent of the fibre cables in the northern Canberra suburb of Crace have to be redone.

The documents also show that by late February NBN Co was aware that it was unlikely to reach the previously promised target of installing fibre optic cabling into 286,000 existing homes by June 30, 2013.

Two weeks before [the documents were written/realeased/etc], NBN Co chief executive Mike Quigley told a Senate estimates committee the project remained on track. It was not until March 21 that he announced a three-month delay in the rollout, largely blaming construction companies' inability to hire skilled labour quickly enough.

The AFR reported that the documents show internal NBN Co staffers blaming construction partners Silcar, Transfield, Visionstream and the Lend Lease-Service Stream joint venture Syntheo for providing incorrect rollout information and paying workers such low rates that they were leaving the project.

“Inconsistent utilisation of critical resources ... is due to poor project management of the [region] by – Transfield,” one NBN Co document said, according to the AFR. “There is a lack of ribbon splicing resources available.”

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This isn't surprising news. If NBNCo has only just realised that the rates paid by the contractors are abysmal, they haven't been paying attention. I've been managing a fibre project in the Hunter Valley over the past nine months. Before it commenced, I asked about availability for the major data contractors in the area. I presumed they would be busy with the NBN, and was planning to add in contingency for this. To my surprise, they all said they had no plans to engage in any NBN work, and didn't see any likelihood of a lack of staff, due to the low pay on offer by NBN contractors. A lack of fibre splicing resources was always on the cards as a result of this. The sensible option would have been to work with reputable, experienced local contractors. They might charge a bit more for the work, but it would have been done quickly, and they would have got it right the first time. Instead, the NBN contractors seem to be skimping on wages, hiring less skilled workers who are in over their heads, and are having to re-do considerable amounts of the work as a result.
Actually Mark Gregory raised this point on an ABC article. The major Contractors are listed companies with dividend requirements and it has not been all that successful. He suggested NBNCo from the start should have built up their own construction arm, this would have meant no middle man, better rates and possibly use of local expertise. I know several ex Telstra Fibre jointers and linies and and istall techs, early 50's to early 60's still very active and capable who would not consider working for the contractors or as subbies. However enthused at the NBN and would love to help install the Nations future, they were old world and had pride in building the Nations communications, even as menial , many however would do a far better job doing the community Q&A due to their experience. They could help train and build the wokforce
My youngest son has just bought a small holding in Bacchus Marsh and I now go over there to stay with him on a regular basis, I still get up each morning early and I love to get out and find a place to eat breakfast at around 6.30 to 7 am. I have found a nice place in Bacchus Marsh to get my breakfast, toast, bacon, eggs mushrooms, tomatoes and coffee, and my newspapers which I read avidly till about 8tish now the trouble is, this place begins to get full at 6.45 and does a roaring trade till 9. And you have guest, the crews of the NBN rock up and eat well, some don't leave till 10. I suppose when the NBN does finally come tho. it will be worth it, maybe its the food at this place that is causing delays.
Find out, NBN installation or Telstra Pit and Duct remediation ?
I saw 5 workers and a mechanical digger working on the Telstra cable pit. Two working and three supervising! For months now, no movement yet on NBN! NBN is too expensive. $20 more for the same speed (12.5 to 20 Mb) as ADSL2. Higher speed cost a lot more!
Mee Telstra has to do the Pit and Duct remediation, so if mechanical digger working on Telstra Cable pit, then Telstra Workers or contractors performing remediation work which MUST be completed before fibre can be pulled through. Actually one of the major problems behind delays
Mee More expensive $20 More ? Who with ? Are you including landline rental and call costs against VOIP call cost i.e Pennytel? Reason, I and my friends will all save money and have more reliable services, I hate it that my VOIP phone (using an ATA) is down so often and calls are missed because of rubbish ADSL2+
The NBN is absolutely necessary. I work for a major Australian exporter, based in a large industrial estate, and the best internet connection we can get is dial-up. ADSL just isn't available. As a result, we're using a hodgepodge of point-to-point and 3G wireless systems to handle hundreds of staff and to provide access to our head-office servers. Not to mention that our main fax line is strung through trees and over fences into our head office building. It was a temporary fix meant to last a day or so, but Telstra have no interest in coming back to fix it. It's really a third-world standard of communications, and would have been unacceptable last decade, let alone now. The NBN is needed soon... which is why they need to pay market rates to engage the services of expert fibre contractors, rather than trying to train workers from the ground-up while paying them a pittance.
It is NOT the NBN setting the rates
NBN must build their own construction arm. We have capable young educated refugees, many from Somalia etc they have high unemployment, work with those communities and recruit and train some of those young men, win win for everyone. In the same manner some miners have had great success with some of our indigenous communities and have competent skilled reliable local employees that are comfortable in the climate
Hi Abel – good to see you’re still fighting the good fight and tilting at windmills. The bottom line is really simple. Any large company or government for that matter should and usually does perform due diligence prior to letting contracts. This is to establish whether the contractor they are considering has the capacity, staff, skills, capital and management to complete the contract at the tendered price. The NBN Co management, most of whom have little of the experience needed for this kind of project, declined the first group of tenders, saying they were too expensive. They are now finding out the ‘pay peanuts, get monkeys’ syndrome and are blaming everyone but themselves as the whole wonderful project collapses into chaos. If I hire a builder to build my house for a price much lower than anyone else, can I blame the builder when he does a dodgy job? Or is my own stupidity that caused my difficulty? In the end, it is the NBN Co’s responsibility – they hired the companies that are currently screwing up, and they are screwing up largely because the NBN Co, for political reasons, refused to pay a reasonable amount for the work. They have terminally stuffed it up. Your suggestion that they must build their own construction arm is, I fear, a triumph of hope over experience. If they cannot successfully organise contractors, how on earth could they deal with the infinitely more complex task of building a huge undertaking like that from scratch?