The National Broadband Network (NBN) has been riddled with issues since its conception. Only two months ago the $36 billion Australian project was put on hold as contractor proposal budget estimates were cited by the company heads as being overblown.
The $380 million major contract for the construction of the network has been awarded to Silicar, which is a culmination of companies Thiess and Siemans after months of deliberation. The contract will encompass the construction projects in Queensland, New South Wales and the ACT making up 40% of the projects entirety.
There is also an added option of a two-year extension to their contract, which will be worth an added $740 million.
The Swedish company Erikson has been awarded the fixed wireless network contract, which is worth an estimated $1.1 billion. There will also be additional spectrum for rural areas that was picked up by pay TV carrier Austar for $120 million.
It has been proposed that the lucrative plans will see 93% of the country connected to the Internet network system within ten years. The Silicar contract has the initial completion time of two years, after which approximately 400,000 homes will have access to the network.
Further construction companies now scramble to pick up further contracts of up to $400 million that will make up the completion of the project. The Australian reported that five contractors, considered to include Transfield Services, Service Stream, Vision Stream, Monadelphous and Telstra, will meet with company heads today to discuss the final contracts.
The supplier tender has as yet to be decided, with Telstra still in talks as a frontrunner for the contract.
Speculation has been rife over the appointment to Silicar, with further reportage in the Australian stating that they were offered the golden contract, with the terms they received not extended.
It is however more prominently reported that the contract was awarded to Silicar on the basis that they will be able to keep the projects budget within $10-$12 million, the government funded projects original budget.
With so many shifts in leadership over the expanding budget it is only logical that such a deal would be struck in order to maintain a sense of balance throughout the construction process.
With the contracts being awarded in their final stages, this will mean a hefty injection of government money into the construction industry. Companies lucky enough to score contracts will be a part country’s largest government funded project. Final contracts will be concluded by June 17.