NBN looks within to fix design, contractor woes
Reports say NBN Co has been hit by a multi-billion dollar blowout from mounting construction costs and contractors’ demands.
The company charged with installing the nationwide broadband network has recently had to bend to contractor demands for more money, after the Syntheo joint venture between Lend Lease and Service Stream announced it was pulling out of NBN contracts.
Insiders have alleged NBN Co found a total $5 billion hole in construction costs, but it may have come with a silver lining with the news that by discovering the gap, re-engineering and redesigning the network, they could save that amount or more.
Opposition communications spokesman Malcolm Turnbull continued his opposition to the plan while spruiking his party’s cheaper and slower option; “[Communications Minister] Anthony Albanese’s credibility on this issue is shattered... did he know the $5 billion blowout was happening when he said the project was on time and on budget? And [did] NBN Co really not tell the shareholder minister about it before they told senior executives?”
NBN Co spokesman Andrew Sholl denied there was a blowout, saying it was normal for construction costs to go up and down over time.
The discovery of the possible construction cost hole has coincided with internal reviews of the design process and the decision by major contractors to pull out of the project. It is believed the company has now bought in two consulting firms, Partners in Performance and McKinsey & Co, tasked with revisiting many of the construction methods used by NBN Co.