National Broadband tender suspension sparks controversy

The National Broadband Network Co (NBN) has suspended its tendering process to build the network, as the federal government seeks to distance itself from the latest controversy.

NBN Co has told 14 companies vying for a contract that their proposals are too expensive.

The government business enterprise has blamed inflated charges for its decision to postpone a key stage of the NBN's second-stage rollout.

With the controversy threatening to become another political liability, Communications Minister Stephen Conroy has tried to distance himself from the matter.

"Procurement processes are commercial matters for NBN Co which occur at arm's length from government," Senator Conroy said.

"The government supports NBN Co striving to get the best deal from contractors," he said.

Opposition communications spokesman Malcolm Turnbull has called on Senator Conroy to guarantee the $36 billion project would be completed on schedule and within budget.

"Does the admission that none of the major Australian construction groups in the tender were willing to do the work at NBN Co's target price indicate that the network's economics and business case are unrealistic and unachievable?" Mr Turnbull asked.

The Australian Constructors Association has criticised NBN Co for changing its procurement strategy so late in the process.

"The NBN Co has suggested that the bids it received did not represent value for money," the group's executive director Jim Barrett said.

"This criticism is surprising given that the bids received were the result of a vigorously competitive tender process involving 14 bidders."

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