Jobs at risk as Telstra freezes $200m cable project

By PETER GRIFFIN

TelstraSaturn's plans to build a $200 million cable network in Christchurch have been frozen, throwing into doubt the jobs of hundreds of contractors working on one of the biggest capital projects in the city's history.

Progress on the network slowed to a crawl when Telstra revealed its intention to buy Clear Communications for $435 million last month.

Now it seems plans to extend the fibre-optic network to residential areas of Christchurch will hinge largely on the Clear acquisition gaining Commerce Commission approval.

If the acquisition is cleared as expected, TelstraSaturn is unlikely to revive its push to extend cable to the suburbs, as the merged Clear-TelstraSaturn operation will focus on business rather than residential customers.

TelstraSaturn's new chief executive, Rosemary Howard, said the company had to "pause" the Christchurch rollout "while we review how to improve financial returns in servicing business and residential customers outside of our existing network build areas".

TelstraSaturn began laying fibre-optic cable around Christchurch last March, forming the basis of a network that was to be capable of delivering telephone, cable TV and high-speed internet services.

Cabling of most of Christchurch's central business district has been completed, but residential cabling has reached only halfway.

Contractors working on the project include cable layers, engineers, drillers and trenchers. Spokespeople from key contractor Downer Connect and trench digger Pot Hole People refused to comment.

Pot Hole People is believed to be in arbitration with Downer Connect over disputes relating to work on the network.

A TelstraSaturn spokeswoman, Adrienne Wilson, refused to comment on the impact moves to delay the network rollout would have on contractors.

She would not confirm which residential areas of Christchurch have access to TelstraSaturn's services.

The freeze effectively leaves TelstraSaturn's $1.1 billion network expansion on hold and under review as plans to extend cable to residential areas in Auckland are hampered by difficulties in gaining resource consent.

TelstraSaturn is believed to have begun a programme of belt-tightening in anticipation of merging with Clear.

Up to 200 across-the-board redundancies were announced to staff this week. A similar number of redundancies is expected to come in the New Year and layoffs will also be made at Clear.