Transfield deal means 400 jobs

TRANSFIELD Services expects to hire 400 staff with telecommunications skills in Victoria after winning a $133 million two-year construction contract with NBN Co.

By InvestSMART · 7 Sep 2011

By InvestSMART ·
7 Sep 2011

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TRANSFIELD Services expects to hire 400 staff with telecommunications skills in Victoria after winning a $133 million two-year construction contract with NBN Co.

The contract is to install fibre-optic cables in Bacchus Marsh and South Morang, where work is scheduled to start in November, and to extend the Brunswick test site to the rest of the suburb.

A second contract worth $174 million was awarded to Syntheo, a Lend Lease and Service Stream joint venture, for three construction sites in Western Australia.

Both contracts could be extended for a further two years if the companies meet performance targets. The extensions would be worth an additional $262 million and $310 million respectively.

NBN Co has issued 11 contracts worth nearly $700 million over two years for construction in 16 regions, with possible extensions worth $1.3 billion in some regions.

No contracts have been issued yet for work in South Australia or the Northern Territory. In Tasmania, a construction contract was awarded to Conneq in April.

The head of construction for NBN Co, Dan Flemming, said the contracts covered 60 per cent of work to be done in the next two years.

"Ultimately, in some of the larger regions like northern NSW or country Victoria or Melbourne, we will have more than one contractor," he said. "As we progress through, we want to get a single contractor in every region."

Transfield was previously contracted by NBN Co to install cables in the New South Wales test site of Kiama and Minnamurra.

NBN Co said the terms of the agreements for Transfield and Syntheo were broadly consistent with those negotiated with Silcar and with the corporate plan.

Silcar, a joint venture between Thiess and Siemens, was granted a contract on June 1 for construction in NSW, parts of Queensland, and the ACT.

"Our aim is to provide value for money for the Australian taxpayer, which is why we have very carefully worked our way through this process with our construction partners," NBN Co chief executive Mike Quigley said yesterday.

A spokesman for Transfield said the company would employ 400 staff when the construction project was in full swing. This would include 150 subcontractors from Melbourne and Ballarat.

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Frequently Asked Questions about this Article…

What is the Transfield contract with NBN Co and where will the fibre-optic work take place?

Transfield Services won a $133 million, two-year construction contract with NBN Co to install fibre-optic cables in Bacchus Marsh and South Morang, and to extend the Brunswick test site to the rest of that suburb. Work is scheduled to start in November.

How many jobs will Transfield create in Victoria from the NBN Co contract?

Transfield expects to hire 400 staff with telecommunications skills in Victoria when the construction project is in full swing. That total includes about 150 subcontractors from Melbourne and Ballarat.

What is the Syntheo contract with NBN Co and which areas does it cover?

Syntheo, a joint venture between Lend Lease and Service Stream, was awarded a $174 million contract for three construction sites in Western Australia. Like the Transfield deal, it is a multi-year construction contract with scope to build fibre networks.

Can the Transfield and Syntheo contracts be extended, and how much could extensions be worth?

Yes. Both contracts could be extended for a further two years if the companies meet performance targets. The potential extensions are worth an additional $262 million for Transfield and $310 million for Syntheo, according to the article.

How many NBN Co construction contracts have been issued so far and what portion of work do they cover?

NBN Co has issued 11 construction contracts worth nearly $700 million over two years for work across 16 regions. The head of construction said those contracts cover about 60% of the work to be done in the next two years, with possible extensions in some regions worth up to $1.3 billion.

Which regions have not yet had NBN Co construction contracts awarded, and what about Tasmania?

As of the article, no contracts had been issued yet for South Australia or the Northern Territory. In Tasmania, a construction contract was previously awarded to Conneq in April.

Which other contractors have been named by NBN Co in these construction rollouts?

Other contractors mentioned include Silcar (a joint venture between Thiess and Siemens), which was granted a contract on June 1 for construction in New South Wales, parts of Queensland and the ACT. Transfield had also previously been contracted to install cables in the New South Wales test sites of Kiama and Minnamurra.

What should everyday investors watch regarding NBN Co construction contracts and contractor announcements?

Everyday investors might watch contract size and duration, the possibility and value of extensions tied to performance targets, regional coverage of work, and which companies win the awards. These factors can affect contractor revenue visibility and local employment impacts, which are often highlighted in company updates and NBN Co announcements.