Floods, mining boom could delay NBN rollout

NBN Co, the company responsible for delivering the National Broadband Network (NBN), may face a skills shortage and consequent project delays as a result of rebuilding efforts in post-flood Queensland and continued mining projects.

According to Access Economics's latest investment and structural change monitoring report, resources investment and associated infrastructure works continue to dominate the Australian investment landscape, with strong commodity prices delivering a profits surge. The subsequent boom has made new investment projects irresistible, according to the research firm.

“Government spending on economic infrastructure projects remains significant, and will also ramp up to deal with the aftermath of flood damage, primarily in Queensland,” the report reads.

“[The] scale of the infrastructure repair job in Queensland and elsewhere… will no doubt be a feature of 2011, though the floods may also end up delaying some mining production and investment,” the report reads.

The report also finds that the NBN is itself a major source of skills competition to the resources sector and post-flood rebuilding efforts.

“Like the 2006 to 2008 period, resources investment is once again booming and there are also likely to be demands from other engineering construction projects – particularly the NBN and other work on badly neglected urban infrastructure,” the report reads.

Prime Minister Julia Gillard last week pledged the NBN would continue to be rebuilt despite the floods, but signalled significant changes to plans for infrastructure investments in most Australian states, including scrapping six major road projects in Queensland.

According to Access Economics director, David Rumbens, competition from the mining boom and reconstruction efforts would likely place a strain on skills supply and could effectively slow the rollout speed of the NBN.

“Yes, we do believe delays are likely given the scale of resources projects and flood reconstruction work along with the NBN,” Rumbens, told Computerwold Australia.

“This is coming at the same time as a slowing down in workforce growth, as net overseas migration has fallen and the rate of retirements looks set to increase.”

The skills shortage to date has not stopped the fibre network wholesaler from continued hiring sprees, most recently appointing Hitachi Data Systems senior marketing manager Tim Smith to head up marketing at the company. The company is advertising for close to 100 jobs on its website, about the same as it was offering in November. However, expected salaries for new positions at the company have reportedly declined since the company was first established in 2009.

The floods have in recent times also caused a ramping up of political pressure on the NBN Co, with Opposition calls to scrap the project to help pay for the flood damage, and reposts from NBN Co chief Mike Quigley as to why the national infrastructure project should remain. A recent study by Essential Research indicated 28 per cent of those surveyed supported abandoning the NBN to help pay for rebuilding Queensland.

NBN Co has been contacted for comment on the state of its skills and potential delays to the NBN’s rollout but is yet to respond.

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