Some questions for Minister Tony Burke and his Department of Immigration about the $150 million Manus Island contract with Decmil
Dear Minister Burke,
On 19 July, 2013 the Federal Government's contracts website published this account of the award by the Department of Immigration and Citizenship of CN1601761, a contract valued at $150,832,171.60 to DECMIL AUSTRALIA PTY LTD for its provision of services as Managing Contractor for Manus Island.
It's a project management contract that the government records as commencing on 18-Jun-2013 and expiring on 30-Jun-2014.
On 2 July, 2013 Decmil Group Ltd (ASX:DCG) advised the market it had won a contract worth $137million to build a 600 bed centre on Manus Island with further accommodation for 200 staff.
The Department's records suggest a commencement date of 18 June, 2013. Decmil Group Ltd advised the exchange of the contract win 14 days later. Decmil has a duty of continuous disclosure that I presume it has met, in other words I write in the belief that Decmil advised the exchange as soon as practicable when it was officially advised that it had won the contract.
The volume of shares traded and the increase in price in the stock during the month of June is clearly evident in the ASX charting information for the security DCG
When was the decision made to award the contract to Decmil? When was Decmil advised it had won the contract?
What was the process that led to the decision?
Who made the final decision?
Who knew of the award of the contract to Decmil before the ASX was advised on 2 July, 2013 and when did those persons know?
Were you advised of the successful tenderer, or did you or the Cabinet have any role in the decision? Was the PM aware?
When was the tender advertised? What are the specifications? What will Decmil deliver?
When Decmil first notified the ASX on 2 July, 2013, it stated the contract value was $137M. When the contract details were published on the Federal Government's tender and contract website on 19 July, the contract value had increased to $150+M. Why the increase in value? Are further contract variations in the pipeline?
The contract as it stands should deliver a 600 bed facility. The Prime Minister seems to have suggested Australia will build a 3,000 bed facility(ies) on Manus Island. Will that increase be delivered under a variation to the existing Decmil contract? Will further tenders be let?
When will the 3,000 bed facility(ies) be completed and operational?
The Manus Island facility has an important role in your government's plans to stop the killings at sea. In my view the public interest in the conduct of your contractual arrangements warrants a speedy and complete response to this enquiry.
By copy to the ASX and the ASIC I report the volume of trade and increase in share price in the security DCG in the month of June, prior to the disclosure to the market of the company's $137M contract, its first contract ever with the Federal Government in this growing market for remote area asylum centre facilities. The month's activity arrested a decline in the security's price that apparently reflected a slowdown in the build phase for mining and exploration related construction. Given that the increase in price apparently preceded the only price-sensitive announcement by such a period and in circumstances where many people may have been privvy to confidential price sensitive information during that period, the exchange and perhaps the Commission may wish to review the trades that drove up the share price.