Syntheo's NBN contracts won't be renewed

Joint venture to cost Service Stream $20 million

The embattled Syntheo joint venture between Lend Lease and Service Stream will not have its National Broadband Network (NBN) contracts extended following the completion of its work in progress, expected to be finished by early 2014.

Service Stream on Tuesday said it would record a $20 million EBITDA loss from the joint venture for FY2013. The company will also record a $30 million EBITDA loss from its fixed communications division during the period.

Syntheo will repay advances to NBN Co for overheads.

Lend Lease will control the completion of Syntheo’s obligations under contracts with NBN Co.

Syntheo has two contracts which are due to expire in September and November 2013 for work in South Australia and Western Australia.

In South Australia, SA Power Networks will carry out work for the NBN in conjunction with completion work by Syntheo.

NBN Co said it was “scoping the prospect” of signing on further construction capacity in both states, with Downer EDI beginning work in WA.

With NBN Co now in caretaker mode, new contracts will not be signed until after the federal election on 7 September.

A Service Stream trading halt, which was announced to the ASX on 11 June, has now been lifted.

Syntheo was 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.

However, Syntheo work in the NT was handed back in March and the joint venture has failed to answer questions on what went wrong.

Mike Quigley, NBN Co chief executive, said the changes to Syntheo is not expected to have an impact on the timeframe of the rollout of the NBN or the overall cost of the project.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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Tags Lend LeaseSyntheonbn coNational Broadband Network (NBN)Service Stream

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