Malcolm Turnbull's cut-price National Broadband Network is facing mounting delays and rising costs, according to a damning internal progress report obtained by Fairfax Media.
The report, marked "commercial in confidence" and "for official use only", sets out a litany of problems in delivering the Coalition's supposedly more budget-friendly fibre-to-the-node (FTTN) model.
By the company's own assessment, the giant infrastructure project has fallen two-thirds short of its benchmark construction timetable. Connection costs to each house or business are also blowing out. The model had been marketed to voters as superior to Labor's NBN because it was "Fast. Affordable. Sooner".
The "final design" process for connections - needed before construction can start - is running far behind schedule, according to the February 19 report.
While 1,402,909 premises should have been approved at the date of the report, the figure was sitting at 662,665 - 740,000 fewer than planned.
The snapshot says NBN Co has achieved 29,005 fibre-to-the-node "construction completions", while noting its internally budgeted target for this period was more than three times this at 94,273.
The report, which was never intended for public disclosure, reveals the extent to which the more than $46 billion project has drifted off course, mainly during the time when Mr Turnbull was in direct control as communications minister - the portfolio he held before replacing Tony Abbott as Prime Minister in September.
In a statement, NBN rejected claims the company is "at risk" of not meeting its targets but refused to be drawn on "alleged internal documents".
"The company's management has proven repeatedly that it can effectively monitor and manage those risks," it said. "This is an incredibly complex project unlike any infrastructure build anywhere in the world."
Communications Minister Mitch Fifield also rejected any suggestion of tardiness.
"The Coalition government has taken a business-like approach to managing the NBN project. After two terms of government, Labor had upgraded broadband to just 1 in 50 premises in Australia," he said.
"By the end of this year, the NBN will have upgraded 1 in 4 premises and by the end of 2018 it will have extended to 3 in 4 premises.
"Our changes to the roll-out will see the project finished six to eight years sooner than reverting to Labor's approach, and at around $30 billion less cost."
Under the heading "Commercial in Confidence: Scale the Deployment Program", the report outlines a plethora of faults, including that delays in power approvals and construction are being caused by electricity companies which account for 38,537 premises or 59 per cent of overall slippages against the target.
Another 30 per cent of delays are down to material shortages and a further 11 per cent are attributed to completion reviews.
"Construction completions currently sits at 29K against the corporate budget of 94K," the report states.
"Gap-to-target has increased from 49,183 to 65,268 at week ending February 12.
"Construction completions gap can be attributed to 3 main issues: power, supply, and completions under review."
Also noted in the report is a rise in the cost per connection of design and construction, which has now reached $1366, compared with the target price of $1114 - a 23 per cent increase.
The NBN Co was the subject of a major political contest at the last election, with Mr Turnbull insisting Labor's FTTP (fibre-to-the-premises) model was needlessly extravagant and unaffordable at a projected off-budget price of $44.9 billion.
Instead, he proposed the more modest mixed technology FTTN roll-out which, rather than connecting up each house or business, would connect in many cases to the old Telstra network in each street, and rely on the existing copper wire connections for the final hook up to each premises.
It was originally intended to cost $29.5 billion according to the Abbott government, but costs have increased considerably since 2013 and it is getting close to twice that price tag.
Yet the NBN Co's own documents show that for all that money, it remains bedevilled with problems from the slow design approvals by power utility companies (FTTP did not require electrical supply but FTTN does) and as a result of material and supply problems. Even expertise in dealing with the copper network is scarce.
While the Coalition's pared-back version of the NBN was intended to deliver the system quicker and more cheaply, the company's snapshot suggests some of the design factors of FTTN are causing the bottleneck.
"Despite Design Commencements remaining above budget, all other significant milestones of FTTN continue to remain behind target," the report states.
Labor's model had proposed connection directly to 93 per cent the premises using fibre-optic cables all the way, compared with the Coalition's version in which just 20 per cent would get the all-fibre version, with the remainder serviced with the fixed-line copper network from the street node, as well as hybrid fibre-coaxial technology.
The NBN has been the battleground of some of the most furious politicking since Labor embarked on the project on its election in 2007.
Mr Abbott appointed Mr Turnbull as communications spokesman with the express instruction to "demolish" the NBN.
Since assuming responsibility for it, however, he has reframed its objectives to contain costs, arguing that providing optical fibre to everywhere but the most remote locations was foolish and that the network would best be constructed by a variety of means relevant to each location, including fibre, copper, satellite, and fibre-coaxial hybrid.
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