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?