Leaked document shows broadband fitting company have incurred losses

CH2M Hill, which has been contracted by JT to provide completed connections, has written off its losses, according to a document from JT, but is ‘no longer willing to sustain any significant increases’ to those losses.

Graeme Millar

April 2010 – Graeme Millar, chief executive of JT, announces plans to launch ‘Gigabit Jersey’ – a project to connect the Island to a superfast broadband network

June 2011 – JT board pass decision to launch project

November 2011 – Then Treasury Minister Philip Ozouf finalises the details of a publicly backed £19 million package to support the project

February 2012 – The first homes in Jersey are connected

February 2013 – JT wins an international award for its Gigabit project

September 2014 – The project is hit by allegations that engineers installing the broadband connections are owed money in unpaid work

November 2014 – A number of employees protest outside JT’s Minden Place offices claiming that they are owed hundreds of pounds

December 2014 – JT claims that workers have submitted misleading timesheets and have been deliberately sabotaging jobs leading to several employees being suspended pending further investigation

January 2015 – JT say that the project may face delays due to the States asking for a £6 million dividend payment

JT are formulating contingency plans should CH2M Hill back out of the deal, but the company has claimed that it remains committed to the Gigabit project.

JT’s Gigabit project has suffered a number of setbacks, including repeated disputes with workers. The company has also warned that a States request for a £6 million dividend payment would also cause delays.

The number of successful connections per week has dropped from about 160 in June last year to about 70 in early January. Last month senior JT officials delivered a presentation to States Members to update them on the current status of the project and said that they were working with CH2M Hill to deliver the project.

In the presentation document seen by the JEP, JT say: ‘CH2M has incurred substantial write-offs as a result of the contracts it has entered into with JT … that it is no longer willing to sustain. This has meant a focus on efficiency and productivity, with a reduced tolerance

for wastage or slack.’

However, CH2M Hill has stressed its commitment to the project and said that it was working alongside JT to deliver the superfast internet connections.

Jonathan Refoy, European corporate affairs director at CH2M Hill, said: ‘We have a strong relationship with JT and have worked closely with them on the Gigabit broadband project. CH2M Hill has a proven record of delivering major infrastructure projects across the world and we look forward to continuing to work alongside Jersey Telecom to successfully roll out this project over the coming months.’

JT has not ruled out completing the project itself, or working with another company should CH2M Hill decide to pull out of the project. In the document, JT said that they would continue to work with CH2M to find a long-term solution, but that if one could not be found, other options would be explored, including JT completing the programme itself or working with another partner.

Daragh McDermott, director of corporate affairs at JT, confirmed to the JEP that while they were continuing to engage with CH2M Hill, the company were also exploring other options to ensure the completion of the project.

He said: ‘We have a contract with CH2M Hill and as far as we are concerned, it is business as usual. CH2M has an obligation to provide connections and we will work with our supplier to get the number back up again. CH2M Hill obviously wants to minimise its losses and if it comes to a particular conclusion, we have to look at other options. We run a business that has various risks associated with contracts.’

Mr McDermott also said that JT had not appointed any engineers from the UK and that a number of engineers were still going through a disciplinary process relating to allegations that they had filled out misleading time-sheets and deliberately sabotaged jobs.

JT is due to provide further updates to States Members in the coming months.

The American-owned engineering company is involved in several large projects, including these UK-based jobs:

Crossrail – London, UK

As Europe’s largest engineering project, Crossrail will connect 37 stations, including Heathrow Airport, Canary Wharf, Abbey Wood and Shenfield, and will involve the construction of a 21-kilometre-long tunnel beneath central London and eight stations.

Dounreay nuclear plant decommissioning

Dounreay is Scotland’s largest nuclear decommissioning project and the second largest decommissioning programme in the UK. Restoring the 140-acre Dounreay site on Scotland’s northern coast is a complex nuclear decommissioning task.

High Speed 2 (HS2) – London, UK

HS2 will be the UK’s new high-speed rail network and is being designed and built to resolve impending capacity issues for both passengers and freight. CH2M HILL is leading the development of the next phase of engineering, design and environmental work on the London to the West Midlands line.

Thames tideway tunnel and Lee tunnel – South England, UK

Construction of the Lee Tunnel and the Thames Tideway Tunnel aims to improve the river quality and reduce the environmental impact of sewerage overflows. Both tunnels will be more than seven metres wide, running beneath a vast network of existing tunnels.

JT was criticised by the regulator – this time for its broadband service – in a third damming report in three weeks last month.

The Channel Islands Competition and Regulatory Authorities’ said in January that both JT and Newtel had ‘considerable room for improvement’ in the broadband service they offer.

The criticism came after a CICRA report published earlier that month found that JT’s customer satisfaction scores for its mobile service were, in most cases, at least half those of its competitors Sure and Airtel, while another report found that Islanders were now less satisfied with JT’s fixed-line services than they were in the first half of last year.

However, JT’s chief executive Graeme Millar criticised CICRA for not providing them with the full data methodology behind the survey, and said that the findings did not match their own evidence.

CICRA, which conducts the survey every six months, asked 500 Islanders for their views on the quality of service, billing and customer care they received from Jersey’s three broadband operators – Sure, Newtel and JT.

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