House of Representatives Committees

| Joint Standing Committee on the National Broadband Network

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Dissenting Report by Coalition Members and Senators

1. Lack of Transparency on NBN Build Costs

Mr Quigley: What is very important for the committee is the number on the right. Obviously, what is important is that it has come down substantially. There were low numbers to start with. With the number on the right we are saying that with our corporate plan—as you can see in the yellow there—given our best estimate now and given all the data we have, that we are confident that we are going to come in for FY2013 between $1,200 and $1,500 for this component of the cost per premise passed, which is consistent with the data you would have seen in New Zealand.

Mr Payne: I think that Chorus from New Zealand have fairly recently published data showing that cost per premise is falling from around $3,300 last year to $2,700, $2,900 this year. They are targeting, I think, around $1,200 to $1,500 in the long run.[2]

Recommendations

2. Telcos Raise Concerns Over Proposed NBN Price Hikes

Recommendations

3. Analysts Question Whether Corporate Plan Revenues Achievable

Recommendations

4. Rollout Delays - Problems With Contractor Syntheo

Senator BIRMINGHAM: What contingencies does NBN Co. have in place where contractors fail to meet their targets?

Mr Quigley: We have a range of the usual commercial conditions you would expect in such contracts if a contractor is in default.

Senator HEFFERNAN: Such as?

Mr Quigley: We apply, obviously, penalties. We are not going into details of the contracts.

Senator Conroy: This is a hypothetical question. The company are not in default.

Mr Quigley: No, they are not in default.

Senator HEFFERNAN: Do they get paid in arrears or—

CHAIR: Order, Senator Heffernan! You do not have the call.

Senator HEFFERNAN: I think it is a fair question to ask.

Senator Conroy: You are asking commercial-in-confidence questions.

Senator BIRMINGHAM: What is the nature of payments made to Syntheo? Are there up-front payments made?

Mr Quigley:
Yes, there are up-front payments made for mobilisation for all of our construction contractors.

Senator BIRMINGHAM: Can you talk us through the different types of payments that are made?

Mr Quigley: The payments are phased relative to the different phases of the project. There is a design phase, then there is a build phase, and there are various phases in the build. The payments are obviously paid at the different phases, as they are completed.

Senator BIRMINGHAM: What payments have been made to Syntheo to date in relation to these 25 FSAMs?

Mr Quigley:
I do not have that number with me. There have obviously been some payments made for the designs of each of those FSAMs and some mobilisation payments. I could not give you the number off the top of my head. I would have to take that one on notice.”[16]

Recommendations

5. NBN Struggling to Connect to Multi Dwelling Units

“Mr Steffens:   We are in trials with a number of contractors. We are about to award the contracts for the MDUs.

Mr TURNBULL:  Yes. Can you tell us who those contractors are?

Mr Steffens:
  No, because we have not concluded it. The number of MDUs passed I would need to take on notice.”[18]

Recommendations

6. NBN and DBCDE Spending Excessively on Advertising Without Measuring Effectiveness

Coalition Criticism of NBN Advertising Campaigns

Recommendations

7. NBN Looking to Sign Longer Contract Periods

“Mr Quigley: We are in the process of having discussions with all of our contractors. I cannot give you a date when they will be concluded or contracts signed. Obviously with all of our contracts we look to renewing them as they fall due.

Senator BIRMINGHAM: The initial contracts were on the basis of two year plus one plus one year?

Mr Quigley: With the construction contractors, yes.

Senator BIRMINGHAM: Is NBN Co. looking at a variance to that for the renewables?

Mr Quigley: We may. Until we finish the discussions I cannot give you an answer on that.

Senator BIRMINGHAM: Are reports that you are offering fixed four-year terms for contractors correct?

Mr Quigley: I will not comment on what we may or may not be offering with particular contractors.

Senator BIRMINGHAM: Why is NBN Co. looking at changing its contract periods?

Mr Quigley: We only look at changing contract periods if we believe there is an advantage to NBN Co. to do so—in other words, we can get the build done with greater certainty and at a lower rate.

Senator BIRMINGHAM: When does NBN Co. need to resolve those contracts by?

Mr Quigley: I suspect we will want to have some of them that are falling due in the middle of this year done before then. We need to renew them before then.”[40]

Recommendations

8. Lack of Transparency and Accountability in Reporting to the Committee

Take-up Rates

Combining ISS and Wireless in Premises Passed/Covered Figures

Inaccurate and Delayed Answers to Questions

Recommendation

 

Hon Malcolm Turnbull MP

Member for Wentworth

on behalf of the Coalition Members of the Joint Committee
on the National Broadband Network

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