Telstra faces $335m bill for NBN duct remediation

Posted on: Thursday, 17th January 2013

Telstra will spend an estimated $335 million over three years to remediate its pit and pipe infrastructure in readiness for NBN Co’s fibre. The figure is based on three contracts it has now given for the work.

The latest contract was awarded to Leighton group subsidiary Visionstream, which will provide the work in Victoria and Tasmania for an estimated value of $90 million over three years. Combined with earlier contract wins for Service Stream ($180 million) and late last year Silcar ($65 million), it brings the estimated value of the remediation work in total to around $335 million over three years.

The latest deal also means that Telstra now has contractors for the remediation work in each state. The contracts are divided geographically: with Victoria and Tasmania given over to Visionstream, Silcar will handle the work in Queensland, while Service Stream has been allocated New South Wales, the ACT, South Australia, Western Australia and the Northern Territory.

A Telstra spokesperson said the three contracts would enable it to remediate pit and pipe in its customer access network to enable fibre distribution by NBN Co. “All three companies have strong track records of performance with Telstra proven through their design and construction work in the Telstra network over many years. Volumes of work will depend on the government’s NBN  roll-out program,” the spokesperson said.

Visionstream said its teams in Victoria and Tasmania were ready to commence work within the next few days. As well as the three-year contract, Visionstream said it had two options for yearly renewals taking the potential value of the contract to $210 million.

“Having been a long term partner with Telstra, Visionstream is ideally placed to assist Telstra deliver its commitment to NBN Co. We understand the importance of getting these works done and the impact it has on the overall success of the new network,” said Visionstream GM Allan Bradford.

Visionstream also has current NBN contracts to build NBN’s transit network and Tasmanian passive fibre, and is doing work in new developments in Queensland and on the construction of the fixed wireless network.

Silcar’s contract with Telstra for pit and pipe work in Queensland was announced late last year. Its contract is expected to be worth $65 million over 3 years and includes remediation of existing pit and pipe infrastructure, construction of any required additional infrastructure and other associated services which are required to satisfy the requirements of the NBN rollout.

The first company to announce its contract win was Service Stream, which said in early December that it had been chosen as the contractor for network remediation activities for Telstra in Western Australia, South Australia, Northern Territory, New South Wales and the Australian Capital Territory. The company is already involved in NBN work in those states and territories either independently or through its Syntheo joint venture with Lend Lease.

Its Telstra contract is for an initial three-year term worth $180 million, with two renewal periods of two years each, subject to demand and performance. The seven year potential value is estimated at up to $420 million. Service Stream said at the time that it had already commenced work on a number of remediation projects that will now be incorporated into its new contract.

Petroc Wilton 

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