NBN Co downgrades construction targets

Quigley revealed that Syntheo, a joint venture with Lend Lease and Service stream, has not yet connected any fibre serving area modules (FSAMs), despite starting construction on the NBN in some areas 19 months ago.

NBN Co has downgraded its June 2013 target for the number of premises passed due to construction delays from Syntheo, the company's CEO, Mike Quigley, told a Senate hearing last night.

Quigley told a Senate Estimates hearing that the organisation was downgrading its June 2013 target of premises passed from just under 300,000 to 286,000.

“The reason for the change is one of our construction partners has reduced significantly their forecast since we presented back in the October timeframe,” Quigley said.

Syntheo is responsible for passing 48,620 premises in SA, WA and the NT by June 2013 – 17 per cent of the 286,000 target for June.

Quigley said that Syntheo, a joint venture with Lend Lease and Service stream, has not yet connected any fibre serving area modules (FSAMs) in WA or the NT, despite starting construction on the NBN in some areas 19 months ago. He said some premises in SA had been connected.

Quigley said the delay was due to Syntheo facing challenges.

“We’re working with them to try and overcome those,” he said.

While Quigley stated there were “a range of issues” which have impacted on Syntheo’s work, he did not reveal what the problems were.

Syntheo has some $315 million worth of work with NBN Co, including a $174 million design and construction contract with NBN Co to roll out fibre in Western Australia and a $141 million contract for work in South Australia and the Northern Territory.

Quigley said Syntheo has already received upfront payments for some of the work, such as the design phase of FSAMs, as part of phased payments.

Other construction companies involved in rolling out the NBN include Silcar in Queensland, NSW and the ACT (responsible for around 60 per cent of the June target); Transfield in Victoria (targeting 13 per cent); and Visionstream in Tasmania (targeting around 10 per cent of the June target).

Despite the downward revision of the June target, Communications Minister Stephen Conroy said he still believes NBN Co will meet its target.

“We set a corporate target of 286,00 and not withstanding some challenges, NBN Co still believe they can meet that target,” he said.

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