Home > Communication > Broadband Services > NBN Hits A Wall

NBN Hits A Wall

Image: Mike Quigley, NBN Co chief giving the rollout a helping hand.

That’s according to AFR, who report major contractors Silcar and Transfield are to pull out of the next round of contracts for National Broadband Network, worth $1.6 bn in total, citing delays that have plagued the project rollout.

These delays are costing contractors more labour time, and pushing up costs on what was thought to be very lucrative NBN projects for construciton companies.

A “rising number of key contractors switch to more stable work in the resource and construction industries” reports AFR.

Other major operators including Lend Lease and Service Stream have also successfully bid for NBN contracts.

But it appears there are less contractors willing to bid for these contracts now, a trend which could be even more pervasive in mining boom states including WA and Qld.

The full rollout of fibre broadband is due to be completed in part by 2015, hitting 3.5 million households across the country, to be finished in  full by 2020.

“Two years ago they had about 14 players but NBN Co has realised there are only about four or five who can really do the job” one construction exec  said.

The danger now seems that this may push the price of NBN – budgeted at $36bn – up further. But NBN Co Chief Mike Quigley insists the rollout is going according to plan:

“The rollout is gathering pace.The NBN is a large and complicated project and the issues we face have been well trailed but we are working to surmount them.” he said.

UPDATE: Earlier today NBN Co also denied any major contractors were pulling out, saying the report is “patently untrue as both Silcar and Transfield have confirmed independently today.”

“All existing construction contractors are committed to the project and are keen to bid for additional work.”

And far from scaling back, “the rollout of the NBN is well and truly ramping up,” NBN Co said in a statement today.

Read: Major Contractors Deny NBN Quit

NBN Co also said it wants to involve more construction companies in the rollout and create more job opportunities for Australian workers.

A report by the Joint Committee on the NBN, released this week, heard the rollout of the fibre broadband was delayed by 8 month “largely” due to the finalising of the agreement Telstra to hand over its infrastructure.

The next Performance Report from NBN Co should include further detailing on an established business plan targets and actual results for: homes passed and homes connected and services in operation, the report also stated.