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Is the govt shutting down more bad broadband news?

09 Sep 2013

In stepping in to make sure Transfield Services paid its subcontractors, the Labour Party claims the government desperately tried to stamp out more bad news about its ultrafast broadband programme.

While acknowledging the government was right to demand subcontractors, who are believed to be owed between $5 and $10 million for laying out broadband fibre, will get paid, the opposition believe cracks are appearing in the fibre roll-out.

“Hundreds of frontline broadband workers have been affected along with subcontractors; one is owed $2 million, another $1 million and a further subcontractor had to mortgage his house," said Clare Curran, Labour’s Communications and IT spokesperson.

“This is simply unacceptable on a major government contract.

“Crown Fibre Holdings, the Crown Entity managing the distribution of taxpayer funds to infrastructure companies such as Chorus and Hamilton’s Ultrafast Fibre, must be more accountable for ensuring more than $1 billion of taxpayer funding ends up where it is supposed to."

Speaking last week, Communications and Information Technology Minister Amy Adams made it clear to Transfield that she expected the company to pay its contractors as quickly as possible.

On Friday the firm announced a third of the outstanding amount has been paid, with the rest expected within two business days.

“It is my expectation that Transfield Services should be looking to make these payments without further delay," she said.

“Transfield Services needs to explain exactly why this situation has developed, what it is doing to resolve it and give an assurance that it will not happen again."

Adams has asked Crown Fibre Holdings to work closely with Transfield until the situation is resolved.

“It is not good enough when a contractor does a fair day’s work, but then does not get paid," Adams added. "I want to see people get paid for the work they have done."

Curran on the other hand believes the problem is one in a long line of errors to plague the government's UFB roll-out plans.

“The broadband scheme is already under high scrutiny as the Government attempts to intervene in the existing copper network to drive prices higher than they should be, in order to push people into fibre connections," she said.

“The government must ensure New Zealand workers laying out the network continue to get paid.

"Transfield’s ability to suddenly find the money it owes and guarantee to pay the subcontractors within 48 hours raises the questions about how this situation arose in the first place."

Hitting back however, Adams claimed it is important to note that the issue was unlikely to have an impact on the overall UFB build programme.

“The overall programme is well on track and business is continuing as usual across much of the country," she said.

"From time to time these situations occur, but I have made it very clear to all involved that I am far from happy.”

Will the issue have an impact on the overall UFB build programme? Tell us your thoughts below