Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


UFB cost blowout hits Enable Networks

[caption id="attachment_2777" align="aligncenter" width="700"]Christchurch-City-Holdings-Limited Enable Networks relationship with Christchurch City Holdings - click for larger version.[/caption]

Enable Networks faces a $64 million cost blowout as it struggles to meet Ultrafast Broadband deadlines.

The blowout shows up in a footnote to the Christchurch City Holdings Limited 2013 annual report. Under the heading Capital Commitments on page 36, the report notes:

As at 30 June 2013 the estimated cost of the UFB network including connections, central office construction and other components of the network, to December 2021 was $401m (2012: $337m).

The costs are against Enable Services Limited, which is contracted to build the network on behalf of Enable Networks.

Enable Networks is the Local Fibre Company selected to build the Ultrafast Broadband network in Christchurch, Rolleston and Rangiora.

Christchurch City Networks Limited and Crown Fibre Holdings are partners in the LFC. CCNL is is a subsidiary of Christchurch City Holdings Limited which is wholly-owned by the Christchurch City Council.

Further problems facing Enable show up in the glossy CCHL annual review. Most of the document is written jaunty, spin-doctored prose. However on page 11, it says:

The company’s biggest challenge in the past year has been deploying the network at the required rate against its agreed plan with Enable Networks Ltd and Crown Fibre Holdings Ltd. The civil construction labour market in Christchurch remains very tight – meaning Enable’s contractor, Transfield Services Ltd, has faced enormous challenges up-weighting civil construction resources in a timely manner.

Things don’t look quite so jolly when the subject is dealt with in the annual report.

Page 37 of the CCHL  annual report says Enable Services is currently in dispute over terms and conditions with Transfield Holdings. The two have had a rocky relationship, in November 1012 The Dominion Post reported problems between the two companies which says the pair may have overestimated the amount of existing infrastructure that could be re-used for the UFB project.

At the time of its appointment, Transfield valued the Enable Networks contract at $260 million.

The annual report says:

The Network Infrastructure Project Agreement signed between Enable Services Ltd, Enable Networks Ltd, Crown Fibre Holdings Ltd and CCHL provides that, if Enable Services Ltd fails to achieve any milestone to which liquidated damages (LDs) apply on or before the applicable milestone Date, Enable Networks Ltd will be entitled to claim the LDs applicable to that milestone for each day (or part thereof) that any such milestone is not met.

It is clear that LDs are potentially payable to Enable Networks Ltd, but to date this demand for LDs payment has not been made. Legal advice has confirmed that Transfield Services (NZ) Ltd would likely be subject to a general damages claim regardless of whether or not the LDs provisions in the TSL contract are enforceable. However, the timing and quantum of this would be subject to a legal process.


Crown Fibre Holdings announced Enable Networks as a partner in May 2011 at the same time as Telecom NZ, now Chorus, was selected as partner for 24 areas including Auckland and Wellington. At the announcement, Enable was described as a special case because of the recent earthquakes in Christchurch. Northpower and Ultrafast Fibre were appointed as LFCs for seven of the 33 candidate areas in December 2010.

In 2011 Crown Fibre Holdings said the Christchurch LFC partnership “is undertaking an initial 10 year spend of around $440M for UFB deployment in Canterbury”.

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Werewolf: Living With Rio’s Olympic Ruins

Mariana Cavalcanti Critics of the Olympic project can point a discernible pattern in the delivery of Olympics-related urban interventions: the belated but rushed inaugurations of faulty and/or unfinished infrastructures... More>>

Live Blog On Now: Open Source//Open Society Conference

The second annual Open Source Open Society Conference is a 2 day event taking place on 22-23 August 2016 at Michael Fowler Centre in Wellington… Scoop is hosting a live blog summarising the key points of this exciting conference. More>>

ALSO:

Buildup:

Gordon Campbell: On The Politicising Of The War On Drugs In Sport

It hasn’t been much fun at all to see how “war on drugs in sport” has become a proxy version of the Cold War, fixated on Russia. This weekend’s banning of the Russian long jumper Darya Klishina took that fixation to fresh extremes. More>>

ALSO:

Binoy Kampmark: Kevin Rudd’s Failed UN Secretary General Bid

Few sights are sadder in international diplomacy than seeing an aging figure desperate for honours. In a desperate effort to net them, he scurries around, cultivating, prodding, wishing to be noted. Finally, such an honour is netted, in all likelihood just to shut that overly keen individual up. More>>

Open Source / Open Society: The Scoop Foundation - An Open Model For NZ Media

Access to accurate, relevant and timely information is a crucial aspect of an open and transparent society. However, in our digital society information is in a state of flux with every aspect of its creation, delivery and consumption undergoing profound redefinition... More>>

Keeping Out The Vote: Gordon Campbell On The US Elections

I’ll focus here on just two ways that dis-enfranchisement is currently occurring in the US: (a) by the rigging of the boundary lines for voter districts and (b) by demanding elaborate photo IDs before people are allowed to cast their vote. More>>

Ramzy Baroud: Being Black Palestinian - Solidarity As A Welcome Pathology

It should come as no surprise that the loudest international solidarity that accompanied the continued spate of the killing of Black Americans comes from Palestine; that books have already been written and published by Palestinians about the plight of their Black brethren. In fact, that solidarity is mutual. More>>

ALSO:


Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news