Today the Australia’s NBN took another turn for the worse. We knew that NBNCo had been revising targets down as contractors fail to fulfill initial estimates. Today the problems deepened with reports that employees of these troubled contractors are not paying their employees and a stop work had occurred in Ballarat, VIC as well as Tasmania.
The reaction online today was certainly very negative with most coalition fans using the opportunity to blame Labor for the problem. In reality today’s issues have very little to do with the government. NBNCo was created and is funded by the government, and was tasked with building the network.
To achieve the biggest infrastructure project in Australia’s history, they needed to engage the services of many electrical companies with fibre-optic expertise. With no single nation-wide company capable of servicing the build, they awarded contracts per state.
These contractors should be under very tight contracts to deliver the network build for the hundreds of millions of dollars awarded to them. It seems this is where some of the biggest problems lay. The Australian’s Lan Martin published an article today that says NBNCo has spent 12-14% of its cap ex budget, while only passing less than 2% of premises, of which 0.5% of the overall 93% are connected to fibre.
The NBNCo contracts with contractors are private negotiated deals, the terms of which have not been made public. What should be made clear is the penalties contractors will face should they miss agreed targets. At the peak of the project, installers are supposed to be passing 2,000+ premises per day. That’s a big number and will require an army to achieve. With this project being so large and such a political hot potato, these contracts need to be water tight.
Should a contractor fail to offer and connect the number set by NBNCo, there should be a public name and shame of the contractors breach of the contract. While this may seem bold and outside standard business practices, this project is unique. Right now NBNCo is taking the heat for not hitting their targets, when the real issue appears to be with these state contractors. Make no mistake, there should be severe financial penalties for also missing targets. As a backup plan, NBNCo should sign contacts with backup vendors should any break a contact so badly that they are terminated.
Shadow Minister for Communications and Broadband, Malcolm Turnbull has continued to make completely unfounded claims about the government’s NBN project. In a blog post calling for an Audit of the NBN Rollout, Turnbull says
“Labor’s NBN will increase wholesale user charges threefold by 2021 and take up to 20 years to complete.”
This isn’t true and completely made up figures are as wild as the $90+ Billion cost estimations. If Turnbull wants to provide detailed information that justifies these numbers, then fine, but realistically, they can’t be proved. Right now the actual figures on the table are $43 Billion for Labor’s FTTP and $28.9 Billion for the Coalition’s FFTN.
The NBN debate moved past the technology discussion some time ago, now it’s purely a business one. Whether the opposition want to acknowledge it or not, we all know the best technology solution to a National Broadband Network is FTTP. The question is simply about the cost. Are you prepared to pay a lot for the best solution which will take longer, or pay a little less a less desirable and faster solution. Both are valid positions to take and incorporate fundamental beliefs about the amount of national debt Australia should take on as is the case in every infrastructure project.
My problem is that Turnbull isn’t fighting with facts, but made up numbers that make great news bites for the 6pm news and that aren’t questioned at press conferences. This disregard and lack of demand for actual numbers detract from the overall aim of having a better connected country. The opposition could actually win the NBN debate very simply, change their policy to the best solution (FTTP), but find a more efficient way to deliver that more economically.
Turnbull was recently on the ABC’s Kitchen Cabinet program where he discussed the reason why people enter politics. With his net worth was estimated at $186 million, his motivation is clearly not a financial one. This means he’s playing for legacy, he there to make a difference. I can’t imagine it’s an inviting prospect to be remember as the person who delivered a NBN that didn’t service the long-term needs of Australians. What a stunning legacy and a contribution to Australia’s position in the world, would the ultimate NBN technology to be delivered to 93%+ of Australians on an amazingly efficient budget, surely that should be the goal. Prove the Labor implementation would cost $90 Billion, then prove how you’d do it for significantly less.
Image credit: United States Studies Centre on Flickr