Silcar to rollout NBN Co's FTTH network in Qld, NSW & ACT

Stuart Corner
Wednesday, 01 June 2011 16:17

IT Industry - Deals

NBN Co has reached agreement with Siemens Theiss joint venture Silcar to roll out its FTTH network over the next two years in Queensland, NSW and the ACT in a deal worth $380m.

The deal represents 40 percent of NBN Co's planned FTTH network rollout over the two years. It covers nine of the 19 NBN second release sites previously announced by NBN Co - extensions to existing works in first release sites Kiama, Townsville and Armidale and new sites in Springfield Lakes, Toowoomba and inner northern Brisbane, Riverstone in western Sydney, Coffs Harbour, and Gungahlin in the ACT. NBN Co also has the option to extend the contract for a further two years and $740m.

The contract will involve rolling out the network from 130 fibre serving access nodes each serving some 3000 premises. However NBN would not indicate what percentage of the overall FTTH rollout the Silcar contract would cover.

The move comes two months after NBN Co announced  that it had indefinitely suspended its network construction tender saying that construction companies had been "unable to provide acceptable terms and prices following four rounds of pricing negotiations."

NBN Co head of corporate services, Kevin Brown said at the time: "We have thoroughly benchmarked our project against similar engineering and civil works projects in Australia and overseas and we will not proceed on the basis of prices we are currently being offered. NBN Co is confident it can secure better value for money by going a different route." Three days later the head of construction, Patrick Flannagan, left suddenly.

NBN Co said today that the deal with Silcar was "in line with NBN Co's Corporate Plan," followed "eight weeks of intensive negotiations'¦and represents a competitive and acceptable benchmark for design and construction across the project." It is not yet a done deal, however. NBN Co said: "The final detailed contract will be concluded by 17 June 2011."

Brown explained that one reason the previous tender process had failed as that NBN Co did not offer bidders any certainty of volumes or locations in which they would be operating.

"The previous process envisaged us establishing a panel of contractors and we would then let one bit of work at a time to members of the panel. What that did not provide was certainty about volume. What we put on the table with Silcar was certainly of location and certainty of volume and that was what brought the price down."

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