Transfield Services, the Australian company hired to roll the ultra-fast broadband network across much of New Zealand, says it is taking action to pay its New Zealand subcontractors, some of whom have not received any money for months.
The company said it was taking steps to make any remaining outstanding payments within the next two business days.
"Our subcontractors are important to us," chief executive of Transfield's infrastructure division Nicholas Yates said in a statement.
"We apologise for the disruption caused by payment problems, and we're concerned and disappointed that it has escalated to this level."
Mr Yates said the company had paid about a third of the total amount owed to its New Zealand subcontractors, some of whom this week revealed they were owed in excess of $1 million after not being paid for three months.
"We will be in direct contact with subcontractors concerned today to advise when they will receive payments and will be addressing the issue with priority to those most impacted," Mr Yates said.
Transfield has responsibility for about 40 per cent of the $1.5 billion ultra-fast broadband network rollout, one of the Government's flagship economic policies.
The plight of the subcontractors was raised in Parliament this week by NZ First Leader Winston Peters who said some were on the verge of going "belly up".
Mr Peters this afternoon said Transfield had previously told subcontractors not to expect payment for work already completed until next month, blaming a "computer glitch".
"They have not been exonerated in any way by now announcing that they will make the outstanding payments by early next week. Transfield Services have been exposed for the incredible financial stress that they have placed these New Zealand companies under."
Mr Peters questioned why Communications Minister Amy Adams was unaware of the problem when he raised it in Parliament on Wednesday.
"This is taxpayer money, on a Government directed project, and yet the Minister and her Government have had the effrontery on Thursday morning to claim that this was a market issue and contractors should beware of who they deal with."
"The Government should send a clear signal that we won't put up with this dingoistic behaviour."