NBN Co has been 'very transparent': Conroy

Senator Stephen Conroy has cited NBN Co’s public downgrade in February of its construction targets as an example of openness by the government-owned company.

NBN Co has been accused of not being transparent, with shadow communications minister Turnbull berating the company for having a closed financial “culture”.

Academic Mark Gregory has also said using subcontractors in the fibre rollout does not provide enough transparency.

But the Minister for Communications, Broadband and the Digital Economy told Computerworld Australia in a one-on-one-interview that he rejects the notion that NBN Co isn’t open.

NBN Co said in February that it was downgrading its June construction targets due to delays from its construction partner Syntheo, a 50/50 joint venture with Lend Lease and Service Stream, with Conroy stating the downgrade announcement was an example of NBN Co being “very transparent”.

“The construction partners were arguing they still could meet their targets. It’s NBN Co … [that] said, ‘Look, we just don’t believe you can meet these targets’,” Conroy said.

“[In] terms of the construction partners on the ground, they made contractual commitments they said they would meet and it became clear … that the construction partners could not meet the targets they had signed up to.

“Then [NBN Co] started digging further and found that there were more problems than were being admitted [to] by the construction partner at that stage.”

Conroy said he was disappointed when he was told the news.

“We believed that contracts had been signed and that people would meet their commitments, but that’s the challenge. We’re working to overcome it,” he said.

Conroy confirms 100 per cent support for NBN Co management

Conroy's opposition counterpart, Turnbull, has had a deeply antagonistic relationship with NBN Co's leadership, including with the NBN wholesaler's CEO, Mike Quigley.

Turnbull recently indicated the Coalition would implement changes to NBN's management and board if it wins the federal election.

“Mike Quigley, while no doubt is a very capable man [and] respected in the industry, was the wrong choice for this job. He’s spent his life working for a vendor,” Turnbull said.

However Conroy lauded the handling of the Syntheo problem by Quigley and NBN Co.

“I’ve got 100 per cent support for Mike Quigley, the board and the management,” Conroy said.

“I think Malcolm’s arguments have almost collapsed on him … Malcolm Turnbull should just stop pretending…

“He’s got to borrow $29 million and he can’t guarantee an upload speed. The cloud requires upload speeds. The future requires upload speeds and he just wants to talk about download speeds.”

For the Coalition to implement its plan for the NBN it would need to renegotiate the $11 billion contract with Telstra in order to use the telco's copper network to roll out fibre-to-the-node to 71 per cent of Australia.

Negotiating the current agreement between NBN Co and Telstra was a long-winded affair, and Conroy said he wished Turnbull luck in reworking it.

“From my own personal experience it takes a bit longer when you’re sitting over the table – and Malcolm Turnbull has said 'I’ve got to have your copper to build his network', so good luck Malcolm. [Turnbull’s] negotiating position is ‘I’ve made an electoral commitment to build the network with your copper. Can you give me your copper please?’

“Malcolm continues to say it’s got no economic value, [but] that’s not Telstra’s position and I’d challenge you to find Telstra on the record saying that.”

NBN delays 'not a big issue'

The NBN's rollout, forecast to take 10 years, has not been smooth. The network is now running three months behind schedule due to the problems with Syntheo, with NBN Co taking back work from the construction company in the Northern Territory.

It is still not clear what went wrong with Syntheo after the company failed to appear before a parliamentary committee for the NBN in April.

“We’re obviously disappointed that we haven’t met the corporate plan target that we set out in about August last year, that that ramp-up from our construction partners hasn’t been as rapid as we expected,” Conroy said.

“In a 10-year project, hitting your targets three-months late is not as big an issue as some in the media have tried to make it out to be.”

Other NBN Co construction partners have also experienced their own problems. The managing director at Construction partner Service Stream recently resigned, with Silcar’s CEO quickly following suit.

Service Stream is also in the spotlight for breaching a gearing ratio covenant under its banking facilities, with its shares plunging 25 per cent plunge the day the company made the announcement.

But Conroy said he is confident that the NBN rollout will recover from problems with NBN Co’s construction partners.

“In terms of the speed of the rollout, particularly in Western Australia – it’s challenging and it’s slower than we would want. But if you look at the east coast … we’re very comfortable with where the challenge is of ramp up being overcome by construction partners,” he said.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

Follow Computerworld Australia on Twitter: @ComputerworldAU

Copyright © 2013 IDG Communications, Inc.

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