Serco wins 5-year Australian immigration contract

Serco wins 5-year Australian immigration contract

22 January 2015


The company that runs Australia’s immigration detention centres has been awarded a further five-year contract, despite concerns about its conduct at centres it currently manages.

Serco, which has been operating the 12 migrant detention centres in Australia since 2009, has been criticised over the running of the Christmas Island centre. Serco was heavily criticised by a welfare inspector official who was concerned about the unhygienic conditions at the centre, and the high level of self-harm among detainees. It was reported that self-harm at the detention centres increased six-fold in six months.

Serco is a UK outsourcing company, which provides services both to the private and public sector and has a number of high-profile contracts with the UK government. There have been a series of scandals involving Serco in recent years including allegations of overcharging for a UK electronic tagging contract, and sexual abuse at a Serco detention centre in the UK. This has led to the UK share price plummeting in recent months, and the resignation of the company Chairman.

Grave Concerns

The company, which employs over 2000 people to run the centres in Australia, estimates the Australian immigration contract to be worth approximately AUD$950m-$1.4bn. AUD$1.9bn had been mentioned as a potential maximum value for the contract.. However, a clampdown by the Australian government on illegal immigrants entering Australia by boat has resulted in fewer migrants in the detention centres. The number of illegal immigrants arriving in Australia was around 10,000 in 2013; It is now approximately 3000.

Gillian Triggs, president of the Australian Human Rights Commission found that babies had been confined to metal containers so small that they were unable to walk or crawl; there had also been a sharp increase in the number of mothers on suicide watch. She voiced ‘grave concerns’ over the conditions which she witnessed during a visit to the Christmas Island centre in July last year.

Contract

Serco stands to make a profit of £100m-£150m from this latest contract, which can be extended for periods of up to two years at a time. The contract is to manage detention facilities at seven Australian states and territories. The contract also includes additional services such as the provision of accommodation, transport, security escorts and catering. It has been said that Serco are in great need of this contract as they are making losses elsewhere.

Serco have numerous outsourcing contracts around the world, including Merseyrail in Liverpool, and Maintenance and repair for CERN in Switzerland. In July last year it lost the high-profile contract to run the Docklands Light Railway in London, which it had been operating for 17 years.

A group of UK MPs recently expressed their concerns that five government departments continued to award contracts to Serco, despite the company being under investigation by the Serious Fraud Office for alleged overcharging of tens of millions of pounds for an electronic tagging contract. However, the Government may have little choice.

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