NBN, Silcar Reach Agreement to Deliver Value-for-money Fibre Rollout

16 October 2012

NBN and Silcar have struck an agreement which enables NBN to prepare for the first large-scale deployment of optic fibre for the National Broadband Network. NBN and Silcar have reached agreement on terms and prices for construction worth A$380 million over the next two years, with the option of a further two years at an additional value of A$740 million. This covers Queensland, New South Wales and the Australian Capital Territory, and represents almost 40% of national construction activity planned over the next two years.

Importantly, the design and construction pricing in the Silcar agreement is in line with NBN’s Corporate Plan.

The agreement follows eight weeks of intensive negotiations between NBN and Silcar, and represents a competitive and acceptable benchmark for design and construction across the project, according to an NBN statement. The final detailed contract will be concluded by June 17, 2011.

“We have always said we would strive to deliver the best possible deal and achieve the lowest cost for taxpayers,” said Kevin Brown, NBN’s head of corporate services. “Having reached this position, we have every reason to believe we will bring in the remaining locations across Australia at acceptable prices and on very competitive terms.”

Brown says NBN selected Silcar based on objective criteria, and on their performance in the field as the construction company responsible for the rollout in the Armidale First Release Site.

“In our one-on-one negotiations we agreed NBN would assume the risk of other infrastructure providers and Silcar would assume the risk of construction,” he said. “Through the negotiations, NBN and Silcar have established the optimal balance between price reductions, certainty of volume, location of premises, appropriate payment terms and the benefits of initial exclusivity to defray overheads. Achieving this result would not have been possible negotiating with multiple parties concurrently.”