Senator Harris asked the Minister for Communications, Information Technology and the Arts, upon notice, on 7 May 2003:

(1) What documents are transacted between the parties prior to, and during, the signing of a contract between a successful contractor and Telstra.

(2) What penalty provisions are included in a Telstra contract.

(3) What notice is given to a contractor that materials provided by Telstra are on site prior to the commencement of a contract.

(4) What process does Telstra follow in relation to non-performance of a contractor.

(5) (a) How does Telstra specify the depth that a cable is to be laid; and

(b) how does it assess compliance with this depth.

(6) How does Telstra monitor the stress on a cable during the laying process when a contractor is involved.

(7) If the stress factor is exceeded what procedure does Telstra follow.

(8) In relation to the fibre optic cable laid in Queensland: how many contracts were let for each of the following years; 1998, 1999, 2000, 2001, 2002.

(9) For each of those years, how many contracts were in default and for what reason.

(10) What action has Telstra taken, or does it intend to take, in relation to any of those contracts.

Senator Alston (Minister for Communications, Information Technology and the Arts) —The answer to the honourable senator's question is as follows:

(1) Telstra has advised that documents exchanged between the parties in the course of establishing a contract will vary depending on a number of factors, such as the nature of the works, goods or services supplied, the cost, business requirements, complexity and type of activity, common practice of the relevant Telstra business unit, and risk profile. With respect to high value contracts, documents exchanged would normally include :

· request for offer documentation, for example a request for tender document or a request for proposal or pricing

· confidentiality documentation

· administrative documents relevant to the contract process, for example an intent to respond form

· offer documentation, for the contractor's tender or proposal

· contract documentation

· associated correspondence, clarifications

(2) Telstra has advised that some of its contracts include provisions allowing it to claim amounts from contractors in the event of poor performance, non-performance or some other failure to comply with the contract, for example liquidated damages for late completion. Provisions of this type vary significantly depending on the requirements of the specific contract.

(3) Telstra advises that such arrangements would vary on a case by case basis. Without being aware of the circumstances of a particular case, Telstra has indicated that it is unable to provide further information.

(4) As for part (3).

(5) (a) Telstra advises that the depth at which a cable is to be laid is specified in various technical requirements documents, which are issued to the cable installer. For example, the document TM00044 “Technical Requirements Optic Fibre” is used to specify cable installation depths for various categories of Optical Fibre cables to installing contractors. As well as listing the standard depths, the document also specifies the options available, and the required authorisations and recording mechanism, in the event that standard depths cannot be attained

(b) Telstra advises that there are several methods used for assessing compliance to cable depth requirements:

· On-site surveillance by an authorised Telstra agent during the cable installation phase; or

· physical exposure of previously installed cable by an authorised Telstra agent; or

· electronic measurements made by an authorised Telstra agent, using appropriate instruments. This method measures the depth of metallic elements installed concurrently with the cable, in the event that the installed cable is of a non-metallic type.

(6) Telstra advises that contractor equipment used in laying Optical Fibre cable is inspected and certified by an authorised Telstra agent. Part of this certification involves measuring the tensions applied to cables and installing seals and various limiting devices that prevent the equipment installing cables beyond specified tensions. Seals and other limiting devices are inspected and re-certified annually to ensure continuing compliance. It is a condition of the contract that only certified equipment shall be used.

(7) Telstra advises that such cables are generally not accepted for integration within the Telstra network until the affected cable or cable section has been replaced by one installed to specification.

(8) Telstra advises that the following numbers of contracts for the laying of fibre optic cables in the Inter-Exchange Network in Queensland have been let by Telstra in the respective years:

· 1998: 0

· 1999: 3

· 2000: 1

· 2001: 1

· 2002: 8

Telstra advises that no specific optic fibre contracts have been let in the timeframe detailed for the Queensland Customer Access Network.

Telstra has noted that these figures do not include contracts which may have been let by Network Design and Construction (NDC) during the period it operated as a wholly owned subsidiary of Telstra from 1999 until re-integration to Telstra this year. In addition, the figures do not include stances where Telstra has laid fibre optic cable by commercial arrangement on request of individual customers for private use.

(9) Telstra advises that no contracts let in the Inter-Exchange Network were in default. As part of the on-going administration of its contracts, wherever possible Telstra seeks to prevent disputes and to work co-operatively with contractors to ensure best performance and minimise defaults.

(10) Telstra advises that, as stated in response to part (9), no contracts let in the Inter-Exchange Network were in default.