I'm able to access the second article above this morning, without subscription. It's quiet a long read.
“No other carrier was going to pay for it and neither was any other contractor [because] the up-front payments paid to contractors were never large enough to pay for things like training schools.
“There was only one organisation that was able to and whose interests were best served by investing in industry development.”
Each player in the chain, from the contractors hired by NBN Co to design and build the network, to the high-vis-wearing man in a hard hat, had his margin. And by wittling down contractors to the lowest possible cost, NBN Co had reduced any chance of a profitable venture for the little guy.
As the project wore on, news of small construction and even air-conditioning companies going broke and threats of lawsuits against contractors began to emerge.
Union officials railed against the schemes, decrying the inexperienced ‘mum-and-dad contractors’ that were building the NBN when the veterans turned it down.
Warning - very long post.
I've been there, done that when it comes to putting cable (power and communications) into the ground both through existing infrastructure (conduits, pits etc) and new builds. I'll say this....
If your own business is primarily not related to cabling, and the job is straightforward and "generic" in nature (eg running a power cable from the electricity network in the street to a house / shop / warehouse etc) then you can go ahead and contract someone to do the lot. Provided that you use someone suitably qualified (electrical contractor or the holder of a communications cabling license as appropriate) and let them do the lot, then things will generally go according to plan. They'll typically sub-contract the excavation work and any asbestos removal, and will install the new infrastructure themselves in most cases (since they are legally responsible for it).
But if your business is effectively the entire industry, or most of it, then things are very different. You won't easily find someone competent to take on the whole task themselves, since by definition they aren't really in that line of work to start with (since you are the whole industry). Secondly, you'll get the "out of sight, out of mind" problem in a big way when it comes to underground works - and in this case practically everything is underground and thus impractical to inspect after the work is done.
Planning is another thing. Running a cable from the street to a single building is pretty straightforward. Give the contractor a plan of the property showing the preferred route and location of other services. Then you're up and running - the contractor will already know where the switchboard or communications termination is going to be since they're doing that too (or at least connecting to an existing one).
But where are the plans for the NBN? I just can't believe that anyone has handed a comprehensive set of plans to the contractors detailing everything that's required. That means that, in practice, the end result is largely being determined by the workers in hard hats building whatever they see fit in order to get from point A to point B. That's where the real trouble starts.
If they are your own employees, and thus accountable directly to the company for time, materials, public complaints, safety and the end result then it's reasonably easy to keep things in line as long as you've got decent workers.
But if they are a sub-contractor of a sub-contractor of a contractor with nobody having an actual plan, nobody really being accoutable and all the major decisions being made on the job by those hauling the cables, driving excavators and so on well that's a recipe for disaster. You end up with a situation where nobody gives a damn what happens, so long as they don't get pulled up by Workplace Standards (or the equivalent in each state) and they get paid. Dig that trench, throw some conduit in, fill it up and move on. Asbestos? No worries - just throw it on the back of the truck. Properly laying the conduit? Why waste time with proper bedding or even glue when nobody's around to see what's going on. Nuclear test of compaction? What's that! The Council won't likely come along until long after the job is finished, and they'll never track down who was responsible anyway so no need to worry about that one. Reinstatement? If it looks good then she'll be right. The cable kinked, was barked or suffered some other problem during installation? No worries - out of sight, out of mind and you can always blame any of the other sub-contractors or, if it's going to be a while until it's used, just blame rats or some other utility (gas, power, water etc) and say it was fine when it was installed.
It's akin to getting on a plane in Melbourne. The Captain thinks the destination is Perth but isn't concerned since he's paid as long as the plane takes off and subsequently lands
somewhere. The First Officer thinks the destination is Darwin but isn't fussed since he's just a labour hire pilot and will be paid for overnight accommodation if required. The man loading the bags thought it was the flight to Los Angeles and loaded the bags for that flight onto this plane, which isn't capable of flying that far anyway (a point he noted, thought was odd but dismissed since it's not his problem). Meanwhile another baggage handler has loaded your bags onto the real flight to LA, which will be taking off just before yours. The flight attendants think they're heading to Brisbane. The passengers think they're flying to Auckland, as do the airline's check-in staff. And the man putting the fuel in the plane, only put in enough to get to Adelaide because he gets in trouble if there's too much fuel on board (excess weight). That being so, as a passenger you'd be better off if that plane stayed on the ground and didn't go anywhere.
That analogy is awfully similar to what NBNCo are trying to achieve - building something which unavoidably lacks anything other than a broad concept plan at a higher level, reliant on workers "on the ground" who also don't know what's going on (the inevitable consequence of so many sub-sub-sub-contractors being involved) and who don't really care anyway since they'll be paid for whatever they do regardless of whether it's right or wrong. It's a recipe for problems, problems and more problems - all of which will end up being fixed by time and cost blow outs.
So the bottom line is that to properly build something like the NBN, NBNCo itself needs to be actively involved in physical construction. They don't need to necessarily do everything themselves, but there needs to be an NBN employee on site during all critical works. Realistically, they'd be wise to take direct control of cable hauling and conduit installation with an NBN foreman in charge of contractors engaged to provide physical labour only (paid by time on the job). They could outsource excavations etc where required, so long as actually installing the new conduit involves at least one NBN employee "on the tools" down in the trenches. Asbestos removal? No real hassle outsourcing that, provided that they do a lot of random inspections, sampling etc and that each contractor agrees to be filmed at any time without further notice. Do all that and it will cost less, and you'll actually get the thing built to meet real world requirements.
So long as NBNCo are focused solely on paperwork and not involved in construction they will continue to receive poor value and encounter problems. You can outsource some things, but not to the point that NBNCo (which largely
is the industry in this case) loses, or more likely doesn't gain in the first place, sound knowledge in house. As it stands now, they are at the mercy of whatever the contractors give them - price, time and quality.
Could Telstra do it better? That depends how they go about it, but they do have a reasonable base if knowledge in house to start with. They'll likely regret some of the job cutting they've done, but they still have reasonable knowledge from which to build up. NBNCo would still be at the contractor's (Telstra) mercy to some extent, but at least Telstra is capable of doing it, leaving only the question of whether they will actually do it properly - and that comes down to a question of final ownership. As with any contractor, they have an incentive to cut corners with quality if
So, there's 3 real options if they want a quality outcome.
1. Build it with NBNCo staff working alongside contractors on-site. It's not as contractually difficult as it may seem, so long as the contractors are engaged under appropriate terms (effectively labour and equipment hire).
2. Let Telstra build it with Telstra owning the completed network as a regulated asset. That is, NBNCo effectively rents the working network from what I'll refer to as "Telstra Network", with any "Telstra Retail" use of the system going via NBNCo the same as any other retailer would do. In practice, this would likely end with Telstra itself being split at the corporate level - a utility company that owns the NBN and makes capacity available to others, and a service company that sells communication services. Any problems with the network are a matter for the owner, such that construction quality liabilities don't sit with NBNCo.
3. NBNCo aquires Telstra's existing network business in its entirety. Cables, vehicles, staff - the whole lot. Then get this aquired Telstra division to build the NBN. The only real difference to option 2 being in ownership of the completed network - Telstra versus NBNCo ownership.