Large labour cost in quote for fibre installation (NGA on request)

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#2463274 16-Apr-2020 09:44

GGJohnstone:

Do not do it.

It seems to me that you are being asked to stump up with the cost of works that may ultimately be shared by many users both along the added path to your place and future loads beyond which could be significant network extensions.

They are having you on.

You think it should be free?

Zeon

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#2463280 16-Apr-2020 09:54

I wonder whether there could be an added incentive for people to do this if others who could take advantage of it along the path could somehow re-imburse the original payer. E.g. the original poster pays $200,000, someone else connects and while it costs Chorus $1,000 to connect them they pay $100,000 back to the first guy?

I realise it would have to be more complex but conceptually? This may provide a greater incentive for people to pay that much for a connection knowing they may get some money back in the future (and could actively encourage neighbours to take up the service) and increae CHorus' coverage and potential client base?

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Grunta47

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#2463282 16-Apr-2020 09:57

Wheelbarrow01:

To give you an example, I recently assisted an end user in the Coatesville area who wanted fibre to his new house. The estimate was circa $100k + gst which he was relatively happy with, so he proceeded to place an order to trigger the full design & quote process. As part of that, the network designers are actually sent out into the field to do proper measurements and work out precisely what materials and extent of labour are required to complete the job. In this example, the firm quote came in at circa $75k + gst... that's quite a difference.

A 25% difference from a desktop audit to an actual site audit is quite good and I would say that the designer (if the same person completed both estimates) has done a good job.

In my previous life, this would have just fallen within our KPI for any job over $50k.

BlinkyBill

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#2463288 16-Apr-2020 10:08

If I paid the full cost for something, wouldn’t I own it, or at least exclusive rights to it?

Why couldn’t the OP sell rights to use the fibre, potentially for up to 140 houses, not to mention downstream houses. Why couldn’t the OP put that condition into the contract?

chevrolux

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#2463293 16-Apr-2020 10:16

BlinkyBill:

If I paid the full cost for something, wouldn’t I own it, or at least exclusive rights to it?

Why couldn’t the OP sell rights to use the fibre, potentially for up to 140 houses, not to mention downstream houses. Why couldn’t the OP put that condition into the contract?

Because Chorus, or any other national infrastructure provider would never agree to those terms.

Grunta47

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#2463294 16-Apr-2020 10:18

lkj509:

No WISP, no LOS. I am 1.2km down a hilly road. Don’t know if you strictly mean line of sight, but I’m 140 houses down from the next address with fibre

Ignoring materials, then $145k for a 1200m install in a urban area does seem a bit high @ $120.00 per/m, but not overly. They have priced to trench the entire route but initially I would have thought they would directional drill which would halve that price easily.

I noticed somewhere there was mention of 3 x chambers being installed, but these would only be around $1000/per install so doesn't really change the cost/m that much.

You mention you're 140 houses down from the next address with fibre. So yes, more than likely trench all the way through a large number of driveways (if they're new, then it should be full width reinstatement, not just trench width).

Materials do seem a bit high, but if as mentioned the main cable is full then this would be the cost of replacing the cable back to the nearest point of spare capacity, or more than likely back to the nearest node to account for future growth (potentially 140 houses)

Taking all of that into account, the price looks about right.

I would have thought Chorus would have built this out, what with 140 houses there......or am I missing something?

hio77

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#2463296 16-Apr-2020 10:21

Zeon:
I wonder whether there could be an added incentive for people to do this if others who could take advantage of it along the path could somehow re-imburse the original payer. E.g. the original poster pays $200,000, someone else connects and while it costs Chorus $1,000 to connect them they pay $100,000 back to the first guy?

I realise it would have to be more complex but conceptually? This may provide a greater incentive for people to pay that much for a connection knowing they may get some money back in the future (and could actively encourage neighbours to take up the service) and increae CHorus' coverage and potential client base?

There used to be a rural density option that chorus subdisised a ton to off something like this.
In general though. If there is a whole block wanting to get connected up and willing to pay , that would be done as a community build rather than POA.

#include <std_disclaimer>

Any comments made are personal opinion and do not reflect directly on the position my current or past employers may have.

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Wheelbarrow01

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#2463305 16-Apr-2020 10:44

hio77:
Zeon:

I wonder whether there could be an added incentive for people to do this if others who could take advantage of it along the path could somehow re-imburse the original payer. E.g. the original poster pays $200,000, someone else connects and while it costs Chorus $1,000 to connect them they pay $100,000 back to the first guy?

I realise it would have to be more complex but conceptually? This may provide a greater incentive for people to pay that much for a connection knowing they may get some money back in the future (and could actively encourage neighbours to take up the service) and increae CHorus' coverage and potential client base?

There used to be a rural density option that chorus subdisised a ton to off something like this.
In general though. If there is a whole block wanting to get connected up and willing to pay , that would be done as a community build rather than POA.

This segues nicely to my next point. I have been in touch with the OP who gave me his address, and I note it is on a shared right of way with 7-8 other houses, and there are another 7-8 houses on the main road very close by. I have therefore lightly touched on the concept of community fibre build and suggested he approach his neighbours to guage their interest.

A fibre cabinet and splitter has capacty for 16 customers, which beautifully matches the number of dwellings I counted in this enclave, so it's a definitely possibility at this point. Even if community build was slightly more expensive at say $240k, it would still provide connections for just $15k per household if there was 100% buy-in among the 16 home owners.

Food for thought for the OP anyway.

[EDIT: Corrected spelling]

The views expressed by me are not necessarily those of my employer Chorus NZ Ltd

ObidiahSlope

260 posts

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#2463306 16-Apr-2020 10:46

Are you on good terms with a directly adjacent neighbour who is already connected to this fully committed cable?

Coming to an arrangement to share with them is a possibility worth investigating.

Mole ploughing in a fibre optic cable over open country is relatively cheap and there are a good number of contractors who offer this service.

It would involve you paying for some on site equipment at your neighbours plus professional setting up of net masks and firewalls to protect both parties privacy.

As the poet says there are many a slip between cup and lip but it would most likely be a cheaper outcome if you can get your ducks in a row.

Postscript: I had assumed the situation involved a rural location not urban.

Obsequious hypocrite

SomeoneSomewhere

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#2463311 16-Apr-2020 11:03

140 houses in 1.2km means a house every 20m on each side of the road. That seems like fairly dense urban to me.

I'm surprised this isn't picked up under UFB anyway.

Sidestep

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#2463312 16-Apr-2020 11:04

BlinkyBill:

If I paid the full cost for something, wouldn’t I own it, or at least exclusive rights to it?

Why couldn’t the OP sell rights to use the fibre, potentially for up to 140 houses, not to mention downstream houses. Why couldn’t the OP put that condition into the contract?

It sounds like a good idea, but making an enforceable contract might be an issue?

In 1989 my parents - and a small group of neighbours - formed a power 'co-op' and had mains power run out to their rural location.
It was very expensive, (even went with expensive concrete power poles) but as other property owners joined the initial investment would be repaid.

Then, in 1992 the government suddenly deregulated the electricity sector, the Bay Of islands Electric Power Board turned into a Trust - Top Energy.

It turned out although they'd paid full cost for the infrastructure they didn't 'own' it. The new operator just ignored the co-op agreement.
Many other property owners gleefully joined - just by getting (subsidised) transformers installed on poles near their properties.

To rub salt into the wound, a couple of years ago the transformer on our property, on the last pole at the very end of the line, blew up.
Top energy insisted on us paying for it - ignoring that we'd paid for it in the first place - refusing to replace it until we did.

I think any service that runs along public (council) roads and is 'infrastructure' would run the same risk?

GGJohnstone

86 posts

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#2463398 16-Apr-2020 12:59

What a nonsense.

The infrastructure install is not in a contest as regards price. Clever and relevant people have priced it.

However the proxi ownership is with Chorus. They derive income from it in the form of rental and repair and no doubt from the install itself.

The quote to permit the queue jumping by OP should be in the form of a loan to Chorus. Favorable term and rate to be agreed or no go and barbecue them. They do not need the work.

quickymart

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#2463410 16-Apr-2020 13:53

Huh?

Sorry, you've lost me...

Amosnz

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#2463424 16-Apr-2020 14:22

chevrolux:

Nope. Anyone can build a fibre network in NZ... they just dont because the economics of doing it are pretty sucky. A few companies got in early and have done well (Inspire Net for example). But note A FEW being the key words there.

From memory Inspire worked out a partnership with the PNCC who were replacing a lot of (sewer?) lines around the city, so PNCC laid a fibre duct for Inspire with the new sewer line. Just combining those 2 would have saved significant digging/ permit/ traffic management costs.

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Jase2985

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#2463474 16-Apr-2020 14:35

SomeoneSomewhere:

140 houses in 1.2km means a house every 20m on each side of the road. That seems like fairly dense urban to me.

I'm surprised this isn't picked up under UFB anyway.

yea it does

except then they are lifestyle blocks with 7-8 house per driveway spaced at 150m intervals, not urban at all

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