The Joint Committee on the National Broadband Network has warned that NBN Co may be showing early signs of cost-blowouts and delays, with timeframe slippage and higher than expected operating expenditure recorded during the last six months.
Your five-minute wrap of the top Australian ICT stories this week.
Internet service provider (ISP) iiNet (ASX:IIN) has praised the National Broadband Network (NBN) but has cautioned that the value of the fibre network will be lessened unless the Federal Government issues a national online strategy to give purpose and direction to the project.
One half of a joint venture formed to bid for the $12 billion nationwide NBN construction tender has been chosen to build fibre out to seven Tasmanian towns as part of the second stage of rollout on the island.
The Queensland Government has flagged a potential relocation of key state government services to regional centres as a means of maximising the benefits afforded by the National Broadband Network (NBN) rollout.
The CSIRO will move to the next stage of testing its Ngara wireless technology in December this year with plans for field trials in the NSW town of Armidale.
The Federal Government has released the executive summary of an independent review into NBN Co’s 30-year business plan, but has held back its full release over concerns with confidentiality.
Competition for skills caused by the resources boom and efforts to rebuild post-flood Queensland will not delay the rollout of the National Broadband Network (NBN), at least in the short term, according to NBN Co.
NBN Co, the company responsible for delivering the National Broadband Network (NBN), may face a skills shortage and consequent project delays as a result of rebuilding efforts in post-flood Queensland and continued mining projects.
According to Access Economics's latest investment and structural change monitoring report, resources investment and associated infrastructure works continue to dominate the Australian investment landscape, with strong commodity prices delivering a profits surge. The subsequent boom has made new investment projects irresistible, according to the research firm.
“Government spending on economic infrastructure projects remains significant, and will also ramp up to deal with the aftermath of flood damage, primarily in Queensland,” the report reads.
“[The] scale of the infrastructure repair job in Queensland and elsewhere… will no doubt be a feature of 2011, though the floods may also end up delaying some mining production and investment,” the report reads.
The report also finds that the NBN is itself a major source of skills competition to the resources sector and post-flood rebuilding efforts.
“Like the 2006 to 2008 period, resources investment is once again booming and there are also likely to be demands from other engineering construction projects – particularly the NBN and other work on badly neglected urban infrastructure,” the report reads.
Prime Minister Julia Gillard last week pledged the NBN would continue to be rebuilt despite the floods, but signalled significant changes to plans for infrastructure investments in most Australian states, including scrapping six major road projects in Queensland.
According to Access Economics director, David Rumbens, competition from the mining boom and reconstruction efforts would likely place a strain on skills supply and could effectively slow the rollout speed of the NBN.
“Yes, we do believe delays are likely given the scale of resources projects and flood reconstruction work along with the NBN,” Rumbens, told Computerwold Australia.
“This is coming at the same time as a slowing down in workforce growth, as net overseas migration has fallen and the rate of retirements looks set to increase.”
The skills shortage to date has not stopped the fibre network wholesaler from continued hiring sprees, most recently appointing Hitachi Data Systems senior marketing manager Tim Smith to head up marketing at the company. The company is advertising for close to 100 jobs on its website, about the same as it was offering in November. However, expected salaries for new positions at the company have reportedly declined since the company was first established in 2009.
The floods have in recent times also caused a ramping up of political pressure on the NBN Co, with Opposition calls to scrap the project to help pay for the flood damage, and reposts from NBN Co chief Mike Quigley as to why the national infrastructure project should remain. A recent study by Essential Research indicated 28 per cent of those surveyed supported abandoning the NBN to help pay for rebuilding Queensland.
NBN Co has been contacted for comment on the state of its skills and potential delays to the NBN’s rollout but is yet to respond.
Public support for the National Broadband Network (NBN) could be on the wane with a new poll finding both Liberal/National and Labor voters favour the private sector, rather than the government, to deliver broadband services.
NBN Co, the company responsible for delivering the National Broadband Network (NBN), may face a skills shortage and consequent project delays as a result of rebuilding efforts in post-flood Queensland and continued mining projects.
Australian Prime Minister Julia Gillard has defended her Government’s decision to give the country's NBN Co an exemption from requests under Australia's Freedom of Information (FoI) Act, despite its status as a taxpayer-funded company.
NBN CO is the company responsible for rolling out the $A35.9 billion National Broadband Network.
Speaking at a Melbourne press conference earlier today, Gillard said there was “nothing extraordinary or unusual about” banning FoI requests into NBN Co.
“My understanding is this is the ordinary operation of the Freedom of Information Act, that a body like NBN Co would not be subject to it,” she said. “The system’s there and the system is one where something like NBN Co is not covered by it…it’s just ordinary business of government.”
But the comments seemingly clash those of NBN Co CEO Mike Quigley, who told a Sydney press conference earlier this month he thought taxpayer dollars required a high degree of transparency.
“We are a publicly funded company and we should be completely as open as we possibly can be without damaging the commercial sensibilities,” he said when asked about the release of NBN Co’s business case.
The news has caused an outcry from both the Australian Greens and the Coalition. The Greens’ communications spokesperson, Senator Scott Ludlam, said he was surprised by the decision and would introduce a private members bill to overturn it before February 10.
“The precedent for past Government business enterprises is that they are subject to FoIs,” he said. “NBN Co is handling upwards of $27.5b of our money and I can’t see any real reason why they should escape FoI requests.”
Despite Shadow Communications Minister Malcom Turnbull publicly opposing the move, Ludlam said he did not automatically expect the Coalition’s support for his Bill.
“We’ll write to (Turnbull) today to seek their support because it’s something I intend to move on quite quickly,” he said. “The fact is they’ve got an Opposition geared up to destroy the thing so I think they’re in their bunker a bit…because the project has become so politicised.”
NBN Co is set to announce a panel of software providers for its operational and billing support systems by the middle of next month, with vendor Alcatel-Lucent likely to play a key role in the tender.
NBN Co chief executive, Mike Quigley, has played down the current controversy surrounding his former employer, Alcatel-Lucent’s, recent $US137 million settlement for bribery cases brought by US authorities.
The Australian NBN Co, the company responsible for rolling out the National Broadband Network, has put the freeze on some of its spending and will not hire any new staff until the Federal Parliament has resolved its current deadlock.
In a statement issued this morning, the company said in general it would continue to operate, as well as planning and using existing resources, but would seek to “minimise any discretionary expenditure” in the current uncertain period. This story was first reported by the Sydney Morning Herald.
Labor and the Coalition are currently awaiting final election results and have begun negotiations with independent MPs and Greens MPs who were elected over the weekend, as they jostle to attempt to form a government.
The future of the NBN policy is currently up in the air, with the Coalition having pledged to walk away from the project if elected — although the independents have broadly emphasised their support for better bush telecommunciations in statements over the past few days.
NBN Co added today that it would not award any significant contracts or issue any new significant request for capability statements or proposals in the “post-election period”.
“Where appropriate NBN Co will postpone or suspend significant existing tender processes during the post-election phase, while in parallel extending current in-progress tender responses and decision deadlines for the same period,” the company’s statement said.
“Affected vendors will be notified. Conscious of NBN Co’s potential suppliers’ and vendors’ costs during any tender processes, suppliers or vendors will have the option to delay participation or tender submission during the post-election phase and not be disadvantaged.”
In addition, the company will suspend employee interviews and will not issue any new offers to potential employees, although it will honour any existing offers that it has formally made to candidates.
In addition, the company will extend the response period for industry comment on a number of product consultation papers — some of which were issued over the past few weeks during the campaign period.