NBN Co awards equipment contracts to Australian-located employers

NBN Co recently awarded three equipment contracts worth over $1.6 billion to Australian-located companies to supply passive network infrastructure to build the National Broadband Network during the next five years.

Victorian fibre-optic equipment manufacturer Warren & Brown Technologies was awarded an equipment contract worth up to $110 million over five years to provide optical distribution frames and subracks that will connect NBN Co’s equipment to external cabling. The initial purchase order was for $50 million.

Melbourne-based Corning was awarded a contract worth up to $1.2 billion over five years for multiple types of fibre-optic cabling and equipment, with an initial purchase order of $400 million. More than half of this contract value will be made in Australia. NBN Co will work with Corning to enhance its Australia-based manufacture and assembly capacity to meet the needs of the NBN rollout.

The third equipment contract, worth $300 million over five years, was awarded to Sydney-based Prysmian, for the supply of underground cabling, with an initial purchase order of $150 million.

Commenting on the contracts, NBN Co CEO Mike Quigley said: “NBN Co is pleased to be working with a 100% Australian-owned company in Warren & Brown and two global manufacturers in Prysmian and Corning, both of whom have significant investments in Australian operations and who are able to leverage their global research and development spend and provide reliable, high-quality and durable products.

“Part of our purchasing strategy is to make a substantial up-front purchase commitment to encourage suppliers to invest in their Australian supply chain ramp-up as we head to volume rollout. They can invest with confidence in plant, equipment, recruitment and training to meet the needs of our national project.

“One of the benefits of local manufacture is the ability of Warren & Brown to fill orders within short time frames to meet the rollout requirements of NBN Co, which is currently in the process of building the network in its five first-release sites.”

Corning will be the initial supplier of aerial cable, selected types of splice closures and feeder- and drop-cables that will connect individual user premises to the fibre network. As a result of the NBN contract, Corning will invest $25 million in its Melbourne facility and personnel, expecting to create an additional 300 to 400 jobs.

NBN Co will work with Prysmian to enhance its Australian-based manufacture and assembly capacity to meet the needs of the national broadband rollout. Prysmian will invest in additional plant to manufacture specialised ‘ribbon-cable’ locally and expand its cable-sheathing operations as part of a commitment to source 80% of the value of its contract in Australia. Prysmian expects the contract will create up to 50 new jobs over the initial five-year period, with a flow-on employment effect as high as 2:1, with extra jobs being created in transport and logistics, training and administration, as well as in businesses with end-user applications.

NBN Co is in the process of awarding a range of contracts for other components of its passive network infrastructure, such as pits and pipes with further announcements expected during early 2011.