One of the companies building the national broadband network has collapsed, citing a lack of work from Australia's largest infrastructure project, with an estimated 250 jobs at risk.
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Melbourne-based civil and mining services company Techdrill entered voluntary administration on Tuesday. More than 50 full-time staff are expected to lose their jobs. Fairfax Media has been told that several hundred sub-contractors could also be impacted, mostly in NSW and Queensland.
A source close to the company - which has been digging trenches to install fibre optic cable for the $41 billion project in NSW and Queensland - said it had been "squeezed" after hiring staff and subcontractors for NBN work that never materialised.
NBN Co's move from away from Labor's plan to connect fibre optic cabling to 93 per cent of Australian homes and businesses has resulted in much less digging and drilling for pits and pipelines. It is understood the amount of work Techdrill originally signed up for with Downer has evaporated, as NBN Co's new management seeks to hasten the NBN roll-out by using Telstra existing copper network.
Techdrill was originally contracted to work on the NBN by listed engineering services company Downer EDI, which won a $94 million NBN contract in February 2013.
Techdrill's board appointed Craig Crosbie and David McEvoy of PPB as voluntary administrators on Tuesday. "At the moment we are working through the challenges and will report back to staff and creditors when we can," Mr Crosbie said.
Cost blowouts and delays have since plagued the NBN project, prompting Communications Minister Malcolm Turnbull sack most of NBN Co's board in late 2013.
Mr Turnbull reiterated his criticism of the company's old management last week, telling Fairfax Media "there are … tens of billions of dollars of value in our view which can never be recovered".
"It is the biggest and most wasteful corporate mess in … the country's history," Mr Turnbull said.
"The NBN under the previous management did not have… a reliable view. They could not, did not have reliable or accurate information on what it was actually costing them to do their rollout.
"Their accounting was utterly inadequate."
Mr Turnbull praised the new management and chief executive Bill Morrow but said they faced a difficult task in turning the project around.
"We're endeavouring to ensure that this is run in a very business-like way, which is hard.
"[Mr Morrow is] getting on top of this, but it takes… it's a lot harder, much, much harder to turn a project around than it is to get it right from the start."
Fairfax Media's attempts to contact Techdrill were unsuccessful, with their offices in Melbourne, Queensland and NSW all unattended on Wednesday.
The company was formed in 2011 after the merger of Techdrill Services and Rock Drilling Australia.
On its website it said "the highly experienced management team enjoys the capital backing of the Harbert Australia Private Equity firm who acquired 45 per cent of the new entity in February 2012".
An NBN Co spokesman said it was a matter between Downer and Techdrill.
"It's up to our master contractors to decide which firms - with which skills - they employ to build the NBN. Relationships between contractors and subcontractors have always been a matter for those companies," the spokesman said.
"There's a significant volume of construction work that's ongoing right across Australia. And the broadband rollout will increase significantly as we transition to the new rollout model this year. Remember that our goal is to have 8 million connected homes in 2020."
