chevrolux:

 

But that is the whole issue. It is SO IMPORTANT what the LFC gets paid per installation. What the LFC gets paid per install is why we are seeing the caliber of installs that we see. This is my biggest issue with the whole UFB project.

 

We (New Zealand), have, once again, completely under estimated what a public infrastructure project like this will truly cost and will end up with broken infrastructure in 10 years time that will be kept up to the very minimum standard by a private company.

 

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My thought process with this is the classic, big corporate low-balls an offer on a huge contract and then realises they low-balled too much so have to save their own ass to keep the shareholders happy.

 

And what do we end up with? As above, broken infrastructure that in 10 years time will be kept up to the very minimum standard by a private company. To the point where their (Chorus') codes are so little, contractors are paying their workers illegally, working ridiculous hours, and just plain employing any willing regardless of skill.

 

Don't get me wrong, I am extremely pleased NZ has made this move to roll out fibre as much as we have. It has literally allowed my livelihood to grow at an exponential rate because businesses now have access to this amazing network and I am able to leverage that for the product I sell. But I can't help but feel it's just another Auckland Harbor bridge or kapiti expressway (even Transmission Gully!) - not in terms of traffic ability, but in terms of upkeep and quality.

 

I think putting this as a "we" problem is a little complicated as your response actually illustrates. One of the reasons for private companies instead of the government doing this work is supposed to be because the competition should keep prices low and services high. For any project but especially a massive one, some analysis of whether the company is actually capable of completing the work to the standard and price agreed is necessary. But ultimately the company also has to take some risk and responsibility for delivering what they promise.

In other words, the contracts and standards etc should be in place, but it's then the company who win's the contract's responsibility to meet them. If the problem is that the right standards etc weren't in the contract, then that's 'our' fault. If they were but we aren't enforcing them, then it's still our fault but in a different manner and in particular, it's something we can start to fix.

The problem then becomes what happens if we start to enforce the terms but the company says they can't meet them? It's too late for some else to take over. But they won the contract and if they underbid that's not really our fault. Unfortunately it's sort of a classic problem of how you actually ensure the benefits of competition, private enterprise and a tender process are realised when a 'too big to fail' infrastructure project is involved.

Of course I'm not sure that the other LFCs that won have been much better but then again maybe they beat Chorus for a reason unlike the others that lost.

However I'm also not sure how much of this is simply because of the original bids anyway. My impression from what I've read is that the install cost is something that wasn't well considered at the beginning. You could put that down to 'us' although the responsibility of Chorus (or whatever LFC) is a little more complicated. It's probably something they should have talked about when bidding (since after all if they want a profit somehow they have to get customers), but it's not so much of an underbid but 'not properly considered' since it wasn't an explicit part of the process.