New contracts for NBN construction

10/06/2015 - 16:07

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Five national businesses have been awarded contracts to continue the roll-out of the National Broadband Network, with project company nbn saying the new performance-based contracts are a marked departure from past practice.

Five national businesses have been awarded contracts to continue the roll-out of the National Broadband Network, with project company nbn saying the new performance-based contracts are a marked departure from past practice.

The first of the new contracts were signed today with construction partners Downer, Transfield Services, Visionstream, Fulton Hogan and WBHO.

nbn said the performance-based contracts aim to increase significantly the quality and speed of the rollout to homes and businesses in the fixed-line footprint, that will make up the vast majority of connections to the network.

It said the terms represent a marked departure from the old commercial model which guaranteed large volumes of work to suppliers in specified states and regions regardless of performance but also placed upon them a high administrative burden and no competition for that work.

The new contracts are designed to offer flexible volume commitments, competition between delivery partners, and pricing based on outcomes rather than inputs.

nbn chief executive Bill Morrow said “what this means is that the performance of our construction partners, the quality of their work and their adherence to safe work practices will determine how much additional work they will receive”.

“We have worked closely with the industry to reduce the complexity of our contracts to make them easier to administer and to reward good work as we gear up to accelerate the rollout.”

The new contracts will cover around 4 million homes and businesses that are scheduled to be connected with Fibre to the Node, Fibre to the Building or Fibre to the Premises.

Visionstream, which is 50 per cent owned by CIMIC Group (formerly Leighton Holdings), expects its contract to be worth upwards of $270 million in the first year.

The contract with Visionstream covers construction to be undertaken in Queensland, New South Wales, Victoria and Tasmania.

Transfield released a statement saying that it expected its contract to be worth up to $140 million in the first year.

Transfield has two existing contracts with NBN Co in Victoria.

A statement from Downer valued its contract at around $100 million in the first year, for work rolling out the NBN to 144,000 premises in Queensland, New South Wales and Western Australia.

Downer is already performing work under contract for Fibre to the Premises in New South Wales, Victoria, Queensland, Western Australia, South Australia and the ACT.

Contracts with additional suppliers are being negotiated and nearing conclusion.

nbn has a goal of ensuring that all homes, businesses and communities across Australia can access high speed broadband by 2020, including 8 million premises connected to the nbn™ network.

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