Tension rises in network rollout

TOM PULLAR-STRECKER
Last updated 08:45 13/11/2012

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Christchurch ultrafast broadband network-builder Enable has come close to falling out with Transfield Services, the Australian company it subcontracted to build the UFB network in the city, sources say.

Enable awarded Transfield a $260 million contract in June last year to lay fibre as far as the street and to operate the network.

One senior industry source said he understood Enable tried to replace Transfield after a dispute arose over costs, but had not found another firm willing to pick up the contract.

There is speculation the companies may have overestimated the amount of Enable's existing infrastructure that they could re-use for the UFB network, leading to a disagreement over who would shoulder unexpected costs.

Another source said both firms had sought legal advice in anticipation of the matter going to court.

Enable spokesman Daniel Herd declined to comment, saying it would be inappropriate for it to discuss the specifics of its contract with Transfield.

However, he denied a rumour that Transfield had at one point "downed tools", saying there was no truth to that claim.

"Transfield are a vitally important partner for us and we constantly work with them to build a closer and more effective partnership," he said.

Herd said Enable had contracted with Downer Infrastructure - a rival of Transfield - to lay UFB connections between the street and customers' premises. Rohan MacMahon, strategy manager at Crown-owned UFB investment vehicle Crown Fibre Holdings, would not comment on whether it was aware of a dispute, as that was "really a question for Enable".

MacMahon also declined to say whether Enable had met the UFB construction milestones it had agreed with Crown Fibre.

"The build down there [in Christchurch] has not been as rapid or as large, as yet, as in some other locations. It was one of the later large cities to get started. But there has been good progress since then," he said.

Enable had succeeded in rolling out a shared-fibre network in Halswell, where it had seen strong uptake for fibre-based services, he said.

Enable Networks is a joint venture between Christchurch City Holdings and Crown Fibre Holdings. It has the contract to make UFB available to 182,000 homes and businesses in Christchurch and Rangiora.

It announced that it had connected 1000 customers to fibre. The majority of those were connected with fibre it had laid prior to getting involved in the UFB scheme.

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- BusinessDay.co.nz

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