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NBN Co suspends tender over value

By mike, Apr 01 in blog with 0 comments

The builder of the national broadband network has suspended its construction tender following concerns about value for money.

NBN Co head of corporate services Kevin Brown said the company would not build the network ‘at any price’.

‘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,’ Mr Brown said in a statement on Friday.

‘NBN Co is confident it can secure better value for money by going a different route.’

Mr Brown said NBN Co had open the option of continuing negotiations at a later stage.

The government proposes to build a $36 billion optic fibre broadband network to 93 per cent of Australian homes, businesses and schools.

Mr Brown said NBN Co would change tack in arranging a builder for the broadband network.

‘Today we are commencing discussions with an alternative different party about how to get the job done,’ he told ABC.

Mr Brown said the prices on offer from a final list of five bidders was dearer than the NBN Co was prepared to pay.

‘It was double digit above what we were expecting,’ he said.

‘It is our view that having done extensive benchmarking about what a fair price is, we believe there is another way to get there.’

Opposition broadband spokesman Malcolm Turnbull said NBN Co had no option but to suspend the tender process because putting optic fibre into every house in Australia was enormously expensive.

‘I imagine they had no choice because the cost of this exercise appears to be well above even their high-end cost estimates,’ Mr Turnbull told ABC Radio.

That explanation was more likely than bidders trying to rip off the NBN Co, he said.

‘It’s easy to say price gouging, but what does that mean?

‘It’s a competitive market (and) there’s a number of contractors that have been contacted.

‘Normally competition gets you the best price.’

Mr Turnbull said it wasn’t necessary to run fibre into every home to ensure fast broadband access.

Story source: www.ninemsn.com.au

About the author

Mike Andrew has been working with the Internet and small business for over 12 years. Mike has been a keynote speaker at conventions and seminars and conducted social media training sessions all over the world. Mike has an extensive media background having worked in electronic media for over 30 years. Mike specialises in social media and Internet marketing strategy, SEO techniques and search engine marketing campaigns. His articles appear on numerous blogs around the web as well as national magazines.