As the crossbench celebrated passing a vote to medivac refugees from offshore detention camps at doctors discretion:
Scott Morrison did not seem to be unduly perturbed:
I am sure he likes having refugees mired at Manus and Nauru, so he can scare Australian voters about the danger of letting Bill Shorten anywhere near The Lodge and the treasury benches. There are some other people who also cash in big time – for example Paladin Group, one of the biggest government contractors in Australia, having won tenders worth $423 million for its 22 months work on Manus.
The AFR have run a feature article on what is happening.
Paladin is being paid on average $20.8 million a month by our government to provide security at three sites – East Lorengau, West Lorengau and Hillside Haus, plus manage the East Lorengau Transit Centre. For 422 asylum seekers:
That means on a daily basis it now costs the Australian government over $1600 to house each refugee on Manus, not including food and welfare services, more than double the price of a suite at the Shangri-La hotel in Sydney.
The AFR has found that costs to Paladin are about $3 million per month, leaving profit of $17 million profit.
- On the ground at Manus, where Paladin is responsible for security, IT, local transport and some site management at the East Lorengau Transit Centre, Hillside Haus and West Lorengau Haus, refugees and asylum seekers complain of broken amenities and non-existent services.
Costs are minimal because the company uses mostly local staff paid $2 per hour. It is thought to have about a dozen expatriates on board who may be earning $150,000, but it is not clear what they do.
- As a group of companies, Paladin is little more than a series of post boxes at registered offices in Singapore and Hong Kong and that beach shack down a dirt road on Kangaroo Island in South Australia.
Its Singapore entity Paladin Holdings Pte Ltd, which is the ultimate beneficiary of all the government contracts, has registered capital of just $US50,000.
How did all this happen?
You might recall that infrastructure service company Transfield attracted a lot of criticism when it undertook the Manus Island contract some years ago. At the time I thought, someone has to do it, and it is probably better that an established company with a brand and reputation to protect, and some competence, provided the services. However, things rapidly went pear-shaped, activists called for boycotts and Transfield’s position became basically untenable.
As it happened, Transfield was then taken over by the Spanish company Ferrovial, who made it clear it would not manage these type of facilities in the future. Because of brand damage, the Transfield name was dumped in favour of Broadspectrum.
A further AFR article reveals that the Home Affairs Department chose not to run an open tender for the security work at Manus Island post Transfield, using instead a “limited tender”.
A limited tender is often used for advanced technology where there is only one supplier, for amounts under $80,000 or when the time frame is very short.
In this case the only
excuse reason could have been “urgency”, yet it was known in April 2016 that Transfield would be terminating over a year before the contract was due to end.
It has been revealed now that Paladin was approached by the Department only two months before the Broadspectrum contract was due to finish in October 2017. Paladin founder Craig Thrupp hired David Mayo, a Canberra consultant and expert in government contract preparation, to help Paladin prepare its proposal in July, just two months before it submitted its bid. Mayo left his job at multinational arms contractor Northrop Grumman and founded the company Dreamtime Indigenous Services. Then in November 2017 a 40 per cent stake in Dreamtime was transferred to Paladin Singapore.
To get the show off the ground the government made a $10 million up front payment to Paladin.
No-one has yet explained why Craig Coleman, a former Australian army soldier from Ipswich in Queensland, who has left a string of bad debts and failed contracts across Asia, was considered at all eligible to provide contract services to the Australian government.
The PNG government had been critical that the work related to Manus Island had been undertaken by international companies. Seems Paladin was put forward at their initiative. Links with prime minister Peter O’Neill have been alleged, but denied.
We only know anything about the whole smelly affair at all because Craig Coleman, former Australian Army major and former CEO of Paladin’s PNG business, is suing for breach of contract, and is being counter-sued in turn. We know what we know because of what has been revealed in court. Otherwise Peter Dutton would make sure we know nothing.
Dutton argues that releasing details would harm our relationship with PNG.
Private security services is big business in PNG:
- The growth of the private security industry has made it arguably the third-largest employer in the relatively impoverished country, and the number of private security guards is estimated to be more than the combined number of police, defence and correctional services personnel.
“There has been a proliferation of these private security companies and massive investment from the political elite and this is all happening in a weak regulatory environment,” says Sinclair Dinnen, senior research fellow with the ANU’s Department of Pacific Affairs.
This sounds like a job for the new national integrity commission. Meanwhile:
- How Paladin came to be awarded the contracts with the Home Affairs Department is set to be the subject of intense Labor and crossbench scrutiny at Senate Estimates hearings next week.
However, obfuscation rather than transparency is likely to be the modus operandi, Peter Dutton’s normal style.