NBN Co locked in a number of contract changes and renewals just before moving into caretaker mode for the Federal Election.

Downer EDI was awarded further contracts, while Silcar’s construction contract was renewed, while the Syntheo JV contract will not be renewed.

Downer was awarded a two-year contract to roll out fibre optic broadband in an area covering approximately 300,000 premises in Brisbane and Melbourne.

The contracts will see Downer design and construct the local and distribution network that runs fibre from a local communications exchange (fibre access node or FAN) through each street in a coverage area.

Up to 500 people will be working on the contracts at peak.

Downer has already been contracted by NBN Co to roll out the network in Northern New South Wales. It has further contracts to connect multi dwelling units such as blocks of flats and office blocks to the NBN in Victoria and NSW (“MDUs”) and to connect the fibre from the street to individual premises in northern NSW (“build drops”).

Meanwhile NBN Co has renewed its construction contract with Silcar Pty Ltd for the rollout of fibre optic broadband in NSW, Queensland and the ACT.

The 12-month contract renewal sees Silcar continue the construction of the local and distribution network that runs fibre from a local communications exchange (fibre access node or FAN) through each street in a coverage area.

Up to 700 people will be working on the contract at peak.

There are now four major contractors rolling out fibre in NSW (Silcar, Visionstream, Transfield, Downer) and three in Queensland (Silcar, Visionstream, Downer).

Silcar was recently bought out by part owner Thiess, a subsidiary of Leightons which also owns Visionstream.

NBN Co and the Syntheo Joint Venture have mutually agreed that contracts due to expire in September 2013 and November 2013 in South Australia and Western Australia will not be extended.

Syntheo will complete construction work in progress, which is expected to conclude in early 2014.

SA Power Networks will become the prime NBN contractor in South Australia, in addition to Syntheo completing work in progress. Downer EDI has begun construction in Western Australia, and NBN Co is scoping the prospect of bringing on additional construction capacity in the coming months in both states.

As part of the agreement, Syntheo has committed to repaying NBN Co advances for overheads.

Furthermore, Lend Lease has advised the Australian Stock Exchange that it has reached a new commercial arrangement with Syntheo joint venture partner, Service Stream Limited. As a result, Lend Lease will control the delivery of Syntheo’s remaining obligations under the agreement with NBN Co, subject to the satisfaction of approval conditions.

NBN Co Chief Executive Mike Quigley said this change is not expected to affect the overall cost of the project or the long-term completion of the build by 2021.

NBN Co has ten contracted construction and operations delivery partners. Until March, Syntheo was also responsible for the rollout in the Northern Territory, at which time NBN Co assumed direct responsibility for delivery there.

Service Stream’s obligations for the additional contracts it has directly entered into with NBN Co to deliver the NBN – to new developments in NSW, WA, SA & NT, and for Field Services Delivery (FSD) and Network Augmentation and Restoration Activities (NARA) in Victoria, WA, SA and NT – are unaffected by the announcement.

 

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