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Thursday, 22 September 2011
Page: 11281


Mr HARTSUYKER (Cowper) (10:33): I welcome the opportunity to debate and note this report. The purpose of the report is to provide advice to parliament on the largest infrastructure project in the nation's history. This committee has the responsibility of providing reporting in a timely manner. This committee has the responsibility to keep the parliament and the Australian people properly informed of the status of the project. The committee has the responsibility to highlight deficiencies identified in the rollout of the project. Regrettably, this report rambles on, page after page, and says absolutely nothing. It gives the reader no insight into the progress of the project. It is a document that does nothing other than repeat and bring together material already in the public domain. This is a project that is behind time and over budget and that is not achieving the take-up rates projected in its own business plan. It is a significant failing that in the first report the committee has not addressed the issues of time, cost and take-up rates—the very foundation stones of the success or failure of the National Broadband Network project. The report does not even inform the parliament of the expenditure to date on the project and where those funds have been spent. At the earliest meetings of the committee certain key performance indicators were requested. It is now 22 September and NBN Co. and the government have failed to deliver on their undertaking to provide KPIs to the committee's meeting of 20 September.

I quote the words from the report:

At the committee's 16 May 2011 public hearing, NBN Co stated that it was reviewing 'a number of KPIs with the NBN Co Board.'

I quote from the report again:

Later at the committee's 5 July 2011 public hearing, the NBN Co indicated that it had been working closely with the Government to develop KPIs. The NBN Co stated that once this process was complete, that the Government would consult with the committee …

It is now 22 September and we are still to receive the promised information. That is timely, responsive reporting of the ilk that Sir Humphrey Appleby would be proud of. It is the largest infrastructure project in history, and the government and NBN Co. can spend six months deciding what the KPIs might be. It is little wonder that this is a project running behind time. It is reasonable to assume that the reason the key performance indicators have not been provided is that this is a project that is failing.

On 1 April this year we had the construction tender process collapse and be abandoned. Tenders were massively over budget. We had 14 tenderers, all notable industry players, who came up with a set of numbers vastly different from the project budget. And what can we conclude here? Was there collusion between the 14 tenderers? There was no ACCC investigation and apparently no evidence of that. Was the budget inadequate? The government claims the budget is totally adequate, but I am yet to be convinced We have a tender process which was abandoned and a government claiming that the project is still within budget, yet we have not a word on this in this waffling report.

And then along comes Silcar and everything is fixed; magically, a deal is done within budget. I thought Christmas only came once a year, but there we had a tender process collapsing and, miraculously, out of the blue on the white horse came Silcar. We have a joint venture between Siemens and Thiess which can allegedly deliver the project within budget. I say 'allegedly' because we just do not know and there is nothing in this report that makes us any more confident. We do not know anything about this contract that has been let to Silcar. In the true spirit of the NBN, there is a veil of secrecy and concealment. We do not know the risks that NBN Co. have taken on to achieve this somewhat miraculous change in the value of the construction tender. We do not know who is taking the risk in changes in the cost of labour. We do not know who is taking the risks on the increases in the cost of materials and equipment. We do not know who is taking the risk with regard to extension of time, industrial disputes, bad weather or site conditions. We just do not know, and this report is silent on this very important issue.

Wouldn't you think that, if you have the largest infrastructure project in this nation's history and you have a major collapse in the construction tender process, it would warrant a few lines of consideration? Wouldn't you think that a committee that has the responsibility of reporting on the status to the parliament would at least raise it and deliberate on that? But no: the report is silent on that issue. The fact is the headline price arrived at with Silcar may be nothing more than a carefully contrived illusion designed to get an incompetent government out of a mess of its own making. The reality is the real cost of this contract may be far greater when all of the risks are finally monetised—a very important point. And did the report properly consider this important issue? Alas, as I said, it did not. Let me look at take-up rates—a vitally important issue and a key foundation stone for the revenue projections in the business plan. It is interesting to note that it would be reasonable to expect that a project with the qualities espoused by the government—the NBN that the country cannot be without—and with all the publicity there would be a stampede to get connected, that people would be knocking Senator Conroy over in the rush to get connected to the NBN. When the Apple iPhone was released, people queued in the snow to buy one. They were so keen to get this new technology, they queued in the snow to buy one. Yet Senator Conroy is struggling to find a queue of people who want get connected to the NBN. He cannot even find a queue.

Mr Bruce Scott: It's a white elephant.

Mr HARTSUYKER: Yes. When Armidale was connected, the first mainland site to be connected, it is interesting to note that there were fewer customers for the NBN than there were passengers on the Prime Minister's jet that flew to the launch. We all remember the magnificent seven—seven customers for the mainland launch of this new technology. Wouldn't you think that the current take-up levels—the slow rates in Tasmania and in the mainland sites—would be sounding alarm bells to the government and NBN Co. management?

In giving evidence to the committee on 5 July, our good friend Mr Quigley was able to inform us that 14,256 premises had been passed by NBN Co. to 30 June 2011—not 14,257, not 14,255 but exactly 14,256 premises passed; not connected but passed. This compares to the 13,000 projected to be passed under the corporate plan by that date. It is pleasing to note that there is something in this project that has been reported as being ahead of expectations. In response to those 14,256 properties passed, my colleague the member for Bradfield, asked Mr Quigley, 'How many retail customers does the NBN have?' The answer was that he did not know. He knew 14,256 houses had passed by 30 June, but he did not know how many customers he had.

Ms Rowland: Because they are wholesalers.

Mr HARTSUYKER: You have had your turn. It is a major factor that you need retail customers to buy from wholesalers.

The DEPUTY SPEAKER ( Mr S Sidebottom ): Order! Member for Cowper, I have not had my turn. You must speak through the chair not to each other across the chamber. I represent the parliament here.

Mr HARTSUYKER: The member for Greenway had her turn and I invite you to stop her interjecting, Mr Deputy Speaker.

The DEPUTY SPEAKER: Just speak through the chair, thank you.

Mr HARTSUYKER: We have a CEO of the largest infrastructure project in the country who does not how many customers he has. I must say that is the level of competence you come to expect from this government and the NBN Co. I guess he had what you could term a 'Costa Rica moment'. You know Costa Rica—that small Central American country with 4.6 million people and the $40 billion of GDP that he forgot he was responsible for in his time at Alcatel. He had a Costa Rica moment. I anticipated that he could have such a Costa Rica moment, so prior to the committee I got my adviser to ring NBN and ask a very probing question. So he rang and asked, 'Could you tell me how many customers you have?' The answer came back, 'I don't know.' So not to be put off by this minor setback, he then said, 'Could you put me on to someone who can tell me how many customers you have?' The person at the other end of the phone not only did not know how many customers they had but also had no idea who in NBN Co. head office was responsible for knowing how many customers they had. So the CEO and NBN Co. head office do not know how many customers they have. That is the management control. We have no advice in this report.

Member for Chifley, do you not think that the report should have made some comment on how many customers the NBN has, given the significance—

The DEPUTY SPEAKER: No, don't ask the member for Chifley. He will respond to you. Don't ask him. Speak through the chair.

Mr HARTSUYKER: I said 'Member for Chifley'.

The DEPUTY SPEAKER: You have invited him and he will report, and I don't want him to, thank you.

Mr Husic: Sorry, Mr Deputy Speaker.

The DEPUTY SPEAKER: No, you're not.

Mr HARTSUYKER: I am sure he is not, Mr Deputy Speaker.

The DEPUTY SPEAKER: Just continue.

Mr HARTSUYKER: The report did not even countenance the fact that the take-up rate was abysmal; that the CEO did not know how many customers he had and that it displayed a lack of competence which is almost incomprehensible. It is of great concern. We have a report that remains mute on the very issues of concern about which this parliament should be informed. We have a report that is about as relevant to this parliament as a travelogue of Sardinia. Really, Mr Deputy Speaker: if it is an item of importance, it is not referred to in the report; if it is an item of gratuitous waffle, it is there on page after page.

It serves little purpose to repeat the information and documentation that is available in the public domain. That is not the role of the committee. The role of this committee is to report in a timely way on those matters that are of importance to the parliament—and the matters that are of importance are the timing of the project, the cost of the project, the impact of the take-up rates on the revenue projections of the project—so that the parliament and the people of Australia can know how this project is progressing. We do not want hundreds of pages of gratuitous waffle.

This is a report that fails every test in relation to providing meaningful information on the largest infrastructure project in this country's history. We have the government and the CEO of NBN Co. attempting to deceive the Australian people with regard to the status of this project. We have a report that assists them in that deception and concealment. This report fails the test sadly. The parliament deserves timely and relevant information. Despite the best efforts of the coalition members in producing the minority report, this report in fact falls far short of what is required for a project of this size.