NBN will take years longer to complete: Economic forecaster

Recent data from BIS Shrapnel revealed despite a 12-year boom in engineering construction activity being finished, construction in telco is expected to experience strong growth over the next four years

Economic forecaster BIS Shrapnel said it expects the National Broadband Network (NBN) will take “several years” longer to build than forecast by NBN Co.

Hart, senior manager at BIS Shrapnel, told Computerworld Australia that NBN Co is struggling to meet existing targets and the project will “take a long time” due to the nature of engineering construction.

“All projects that we see in the engineering construction space, whether [they are] telecoms or otherwise, have been subject to labour shortages [and] have been subject to cost blowouts,” he said.

“Usually [projects] haven’t been scoped very well and things have turned out to be a lot more expensive than what was planned … It’s just the nature of the industry at the moment.

“Things are costing a lot more than what was initially planned and you have to be very, very good at estimating these costs up-front to meet those kinds of budgets. Time and time again we see that projects aren’t meeting budget.”

Labor’s $37.4 billion NBN, which uses optical fibre to connect premises to the network, is due to finish in June 2021, with the network currently running three months behind schedule.

The Coalition claimed in its broadband policy that the NBN could end up costing more than $90 billion and take an extra four years to complete.

“Time and time again people have been caught out promising a certain amount of construction work at certain budgets and having that cost blow out 20-30 per cent. So that’s not unusual in this industry whatsoever,” Hart said.

“I’m not sure [the delay is] going to extend to four years beyond the planned rollout, but I would certainly expect a couple of years beyond what NBN Co is currently projecting.”

NBN Co has denied there are labour shortage issues with building the network.

It recently said it would train and employ 80 extra fibre splicers and construction partners would increase investment in their equipment and manpower in order to recover from the three-month delay.

But Austin Blackburne, business director for Hays Construction in Victoria, warned it wouldn’t be as easy as it sounds, and Hart said the busy telco environment might make it difficult.

“It will be a tough environment for them, because [the telecommunications industry is] starting to invest again quite substantially and I think [there is] competition for whatever skilled resources you can get,” he said.

A recruitment firm for the NBN also recently told Computerworld Australia there is a shortage of cablers to connect apartments to the network.

Recent data from BIS Shrapnel revealed despite a 12-year boom in engineering construction activity being over, construction in telecommunications is expected to experience strong growth in the near future.

“Over the next five years we’re going to see a substantial increase in non-mining related engineering construction activity, which the NBN will just be a part of,” Hart said.

He said telco construction work fell to a 15-year low prior to the start of NBN work in 2010, but investments in 4G and the NBN is helping to drive telco construction.

“With the NBN ramping up, the outlook for telecoms construction is very strong, and in fact is the strongest of all civil construction segments in the report,” Hart said.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

Follow Computerworld Australia on Twitter: @ComputerworldAU

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