So far April hasn’t been a great month for the National Broadband Network. The construction tender process dumped. A key executive — the head of construction, no less — resigned. Connected? Either way, these are surely problems to worry about. Yet communications minister Senator Stephen Conroy is keen to hose down what he calls “hysteria”.
The tendering process for constructing the network began a year ago with 45 prospective vendors, whittled down to 14 at the RFP stage and then to five as pricing negotiations took place. At the start of the month, however, NBN Co announced that the entire process was “indefinitely suspended” after vendors were “unable to provide acceptable terms and prices”.
“We have thoroughly benchmarked our project against similar engineering and civil works projects in Australia and overseas and we will not proceed on the basis of prices we are currently being offered,” NBN Co said in a statement. “NBN Co is confident it can secure better value for money by going a different route.”
That different route is to negotiate directly with just one vendor for the whole job, one that wasn’t amongst the final five. While Senator Conroy says he genuinely doesn’t know who that vendor is, The Australian has reported that it’s Silcar, a joint venture between Leighton and Siemens.
The theory is that pooling the risks into one big project will reduce costs. The concern either way, I reckon, is that Australia faces a labour shortage and this can only drive prices up. A few days later, NBN Co’s head of construction Patrick Flannigan resigned, and he’s not saying why.
Needless to say, opposition spokesperson Malcolm Turnbull pounced. In two quick statements he questioned whether NBN Co’s expectations were unrealistic and unachievable, and hit out at what he called NBN Co’s inadequacy of current supervision and accountability.
Conroy won’t be drawn on questions of labour shortages or cost overruns, or how the NBN plan might be modified if for whatever reason the budget can’t be met — perhaps by rolling back the fibre coverage area or extending the construction period.
“A tsunami could hit tomorrow as well, and there’s a nuclear explosion [that] could happen too. They’re hypotheticals,” he told this week’s Patch Monday podcast.
“I think people should just not get caught up in the hysteria, and just wait to see the outcome of the discussions that are taking place at the moment before they start making wild assertions,” referring to reports of potential construction cost blow-outs of 50% above forecasts.
“There’s a lot of numbers being kicked around, and a lot of them have been put [forward] by people who have got a vested interest in the outcome.”
Conroy acknowledges that negotiations between NBN Co, Telstra and the federal government have dragged on and are “probably a couple of months behind”: “I remain very optimistic that we’ll have a satisfactory conclusion sometime in the near future.”
Against this background of politics, economics and technology, however, it seems that ordinary householders really only want to know how the NBN will affect them personally. When will the NBN roll out in their area? Will they get fibre or wireless or satellite? How does the connection process work? Will they lose their landline phone?
Even as pilot sites are being wired up — or fibred up, I should say — these practical questions continue to dominate discussions such as those on ABC Radio National’s Australia Talks only last Monday.
Such questions are finally answered in the booklet National Broadband Network: A Guide for Consumers, produced by the Australian Communications Consumers Action Network and the Internet Society of Australia, and launched by Senator Conroy on Friday. It’s available in a variety of accessible formats.
Personally I’m wondering why, when so many column inches and broadcast minutes have been spent on the NBN, such basic information hadn’t reached the punters already. What does that say about our media?
It says the media is crap.
It says there have been no press releases from any bidder, or from NBN, and the project is otherwise locked up tight for now.
It’s incoceivable that every bidder has got it wrong, or that the big five are colluding.
Perhaps the RFT is impossible to bid against in risk-free ways. The NBN technical requirements may really, really abstract, or the terms and conditions may be totally unrealistic, or both. Think high-speed rail links, or F-111 replacements. In either scenario, the bravest bidder(s) will include huge contingency sums in their bid(s), and hope to survive intact from future disputes over the service levels. Think train sets.
It’s always possible the government will be so compelled to sign that they will suck on the contingency amounts. It’s also possible the government will in future do almost anything (like paying contingency sums) to avoid a scandal.
There’s no truth in the rumour that one of the major unknowns in relation to the RFT is the actual condition of Telstra’s ductwork, through which the luckiest (or bravest) tenderer will have to blow fibre or smoke.
I don’t know why they don’t consider the fibre-to-the-node option again, now that Sol and his Amigos have departed (the stated reason for not progressing this way previously)
Especially given the labour shortages and otherwise-increased risk of the unknowns regarding ductwork of a one-size-fits-all monolithic (Soviet) solution.
http://invig.livejournal.com/443045.html
Just have look at the length of time that has been spent in one of the NBN trial sites – Minnamaurra – Kiama Downs and the amount of disruption to the local community – time spent
and constuction costs. Multiply that experince by the rest of Australia
And with regard to take up – this is a commnity which is quite high in socio economic rankings with a high representation of teachers, professionals, miners and self funded retirees – and yet the take up rate is also well below the targets required.
Oh no!!! Not “disruption to the community!”
(whatever that means)