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NBN Delayed By "3 Months"

By Oonagh Reidy | Thursday | 21/03/2013

Breaking news: Construction delay of "about three months" on NBN

NBN Co, responsible for building the $37.4 billion fibre broadband network, said rollout of fibre optic cable to premises would be delayed  by "about three months," CEO Mike Quigley admitted today.

The previous NBN target of 341,000 premises passed with fibre cable initially set for June 30 now "won't be achieved until September."

Between 190,000 - 220,000 premises are now forecast to be passed by fibre by end June, so a shortfall of up to 141,000 connections.

Over the last 2-3 months, it became "increasingly apparent" the fibre rollout progress was insufficient to meet June targets, Quigley said.

The delay is being blamed on contractor rollout delays, which Quigley called a "short term ramp up issue."

"Some construction partners were not mobilising boots on the ground," but added: "its not about labour shortages."

"The problem is we are just not seeing the ramp up of construction workers on the ground that would be needed to deliver these targets."

Quigley pointed out NBN Co's June 30 target was underpinned by commitments from its four construction contractors.

The NBN Co. CEO, the former boss of Alcatel-Lucent, admitted he was "disappointed" but said the delays was not the end of the road.

NBN Co contractors include Syntheo, who's operations in NT will now be moved to focus soley on WA and SA and will be taken over by NBN Co.

Syntheo, a joint venture between Lend Lease and Service Stream, Transfield, Silacar and Vision Stream are among the other contractors working on the NBN.

However, NBN Co boss would not reveal who the offending contractors were, but said it was in "discussions with contractors" and "working closely" with them.

Even though NBN Co is taking the reins in NT, the  broadband company isn't turning into a construction company, Quigley reassured media at conference call this afternoon.

He also insisted the three month delay won't affect the long term delivery date for the NBN of mid 2021 or the cost of the project which is veering on $37.4bn mark.

Construction partners with NBN contracts worth million of dollars, are now upping manpower and technology to meet its targets, have not been penalised for not making the targets set out. 

The decision followed a NBN Co board meeting today, and a new Chair has also been appointed - Siobhan McKenna, announced this afternoon.  

The 2021 completion date and overall cost of the NBN remains unchanged. He said NBN Co is working closely with contractors and "we'll ramp up and recover the delay."  

He also said other technical issues including technology supply, back-end IT systems and customer processes are "in good shape", suprisingly.

With all the ructions going on in Canberra today, the timing of this announcement could go in NBN Co's favour, although Quigley would not confirm when the Minister for Communications, Stephen Conroy was told of the rollout delays.

David Saxelby, CEO of Construction & Infrastructure Australia, LendLease, admitted Syntheo" has been experiencing difficulties in reaching the construction figures originally anticipated for the NBN in Western Australia, South Australia and the Northern Territory.

"As a consequence, Syntheo has revised its forecast for premises passed by 30 June 2013, in consultation with NBN Co. Syntheo, as a joint venture, has significantly strengthened its resources to recover the situation and we are committed to working with NBN Co to deliver this important piece of infrastructure."

Transfield Nicholas Yates, Chief Executive Infrastructure, also admitted "some initial teething issues and that's only to be expected in an undertaking ofthis scale and geographic diversity.

"These types of issues have been experienced elsewhere,but our rollout rates have been improving for some time and we are working closely with NBNCo to lift them even further."

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