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THE NBN circus show has changed tack yet again, by engaging in talks with a Leighton-Siemens joint venture,
Office Pro 2010 Key, Silcar, over taking a big slice of the $10-12 billion network construction.
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This comes nine months after a tender aimed at finding half a dozen firms to build the project ended this week with the rejection of all the bids and a claim of industry price-gouging.
Not surprisingly, the industry is in uproar, and the Australian Contractors Association has expressed its "disappointment" at the results.
In private, ACA members used different language and expressed bewilderment that NBN could stage a leaked story on the contract dismissal to accuse 14 different companies of overcharging and even collusion.
A different PR strategy would have been a general release stating the nine-month tender had been scrapped to allow NBN to move to plan B, which was negotiations with a single company, another Leighton joint venture named Silcar.
The ACCC takes a close look at government tenders but whether it takes action here is yet to be worked out.
The fact that NBN now seems to be heading in the right direction by giving Silcar more certainty and volume to minimise costs does not undo the harm caused by yet another bungled tender.
The whole NBN project came together in a hurry after the original proposals were rejected by an expert committee.
Construction tenders normally conclude with requests for best and final offers (BAFOs); this contract came with five of six BAFOs, which gives you some idea of the lack of co-ordination on the NBN side of the table. Nine-month tenders like this cost bidders millions of dollars each, and tens of millions collectively.
This money is now largely wasted because NBN couldn't work out what it wanted.
Talk of skyrocketing labour costs was also dismissed; although the resources boom is driving up wages in the communications construction game, the players are not exactly rushed off their feet.
On one level, the public should welcome the fact NBN has baulked at the price of contracts and taken a different route.
But the way this tender cancellation was handled appears to be pitched to deflect any blame from NBN management and for a government entity to play such PR games is shameless and frankly stinks.
Communications Minister Stephen Conroy has a genuine nation-building plan that is being white-anted by incompetent execution.
NBN started with the idea that it could get a cheaper network built by getting a handful of companies to bid for parts of the network.
In the end, the shortlist included Silcar, Downer EDI, Telstra, Service Stream, AbiGroup and Vision Systems.
Another part of the Leighton empire, John Holland, built the Tasmanian network.
The bidders were asked to provide costings for a specific neighbourhood with little certainty on volumes; risk mitigation as such was almost non-existent.
By the end of the project, the bidders agreed to take on more risk.
However, this put the bids above the benchmark in NBN boss Mike Quigley's head and letters were sent on Thursday calling off the tender.
Yesterday morning,
Buy Office 2007, under the headline "gouging" bidders,
Cheap Office 2007, the cancellation was disclosed.
At a rough guess, the story was placed by NBN to try to set the agenda.
The very fact that NBN feels the need to play such games makes you wonder just what is going on and tends to raise doubts about the whole project.
The bidders spent tens of millions of dollars in a competitive tender that was basically flawed.
NBN has changed tack completely and opted to choose one company to do a big swag of the work with others picking up the pieces.
Silcar is in pole position to be the lead constructor.
The company now run by Peter Lamell is well placed to do the work,
Windows 7 Starter, given that it has worked extensively with Telstra in Australia and that Siemens is a global leader in network construction.
Negotiations with Silcar are well advanced.
Just when any conclusion will be unveiled is not known.
The next key date for the NBN will come before month's end with a final agreement with Telstra.
At that point, the access undertakings and agreements can go to the ACCC for vetting but this process will take at least three months.
The most likely date to put the NBN deal to shareholders will be the annual meeting in October.
But given the long delay, Telstra will be under pressure to release more details to the market as soon as terms are finalised with NBN boss Quigley.
Formal agreement with Telstra will then allow NBN to proceed with its so-called second release site roll-out.
Construction should be well under way by the time Telstra shareholders actually support the plan.
Then again, it is highly likely Telstra shareholders will jump at the prospect of receiving about $20bn from taxpayers in compensation for closing down its ageing copper network and transferring customers on to a fast fibre network.
The precise wording used by Telstra on the government handout is "post tax net present value of $11bn", which over time translates into more like $20bn.
Then again, given past performance this circus is sure to convene to a town near you very soon.
Woolies jockeying
AS the folk at Woolies continue to speculate on the timing of the announcement of chief executive Mike Luscombe's departure, another insider, Grant O'Brien, has emerged as a possible candidate.
O'Brien is chief operating officer of supermarkets and petrol but has led much of the negotiations over the hardware expansions and is said to be highly regarded at headquarters. The company has declined to comment on any of the speculation.
However, some say April is a likely release date with a long handover until the annual meeting in November.
This would enable Luscombe to round out a stellar career with the hardware launch in September before his final annual meeting as chief executive.
Greg Foran is still the internal front-runner, but the company is known to have interview candidates in Europe.
Five years on
THE corporate plod gets there in the end, but the case launched yesterday against some Citigroup brokers, among others, alleging insider trading in VSL shares dates back to July 2006.
The brokers allegedly passed on a merger tip.
ASIC boss Tony D'Aloisio has boasted that ASIC, now that it has supervisory powers, will be lightning fast to nab perpetrators -- but the track record isn't great.
This case occurred before ASIC got full control of supervision and came on referral from the ASX.
Whether this is evidence in D'Aloisio's favour or not, five years is a long time between alleged offence and formal action from the plod.
Flood of words
ASSISTANT Treasurer Bill Shorten will return to flood ravaged Ipswich on Tuesday to launch a series of insurance reforms, including a common definition of a flood.
It is likely to run along the lines of "water overflowing of a bank whether natural or man made or from a water storage area".
This is as distinct from water inundation, which is simply a big rush of water caused by torrential rain.
The reforms will also include better disclosure by making insurance contracts easier to read,
Office Professional Plus 2007 Key, with the key points highlighted in a few words at the front of the book.
The same changes will be made to prospectuses shortly as pendulums swing back from the financial services reform legislation-induced hundreds of pages of legalese to cover company backsides.
Melbourne mutual Australian Unity, by way of example, had to include a 117-page prospectus for a $100 million capital raising that closes next week.
The Shorten reforms will at least give people a better idea what they are doing.
However, this does not necessarily translate into better insurance coverage.
Cheap Office 2007 NBN circus up to its tricks agai
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