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$423M contract to little-known provider

This Week – Manus contract criticism and Melbourne’s cladding crisis


Limited tender process awards $423 million for Manus services

Department of Home Affairs officials have been grilled over the decision to award a $423 million to a relatively unknown provider. The contract for security and other services on Manus Island was won by the Singapore-based Paladin Group despite strong concerns around the organisation’s capacity, expertise and track record.

  • Home Affairs officials blamed the fast-tracked non-competitive tender process on the PNG Government for pulling out of the planed to take over services at Manus at short notice. Paladin was invited to participate in a "limited tender" for the contract, believed to only involve the one firm. They claimed the non-competitive nature of the process was used because there was not enough time for an open tender.

  • Home Affairs Minister, Peter Dutton, attempted to distance himself from the decision, hinting it was not easy to find a company willing to take on the contract.

  • In another twist, the family of one of PNG's most powerful politicians is accused of directly benefiting from the Paladin contract. Documents released under Freedom of Information show Paladin entered into an agreement in 2018 with a company controlled by the brothers of PNG's parliamentary speaker and local member for Manus, a key ally of Prime Minister O'Neill.

  • While there will inevitably be more examination and criticism of Paladin Group and the circumstances around the tender process, there are some key crisis management considerations for both government and Paladin.

1. How does the Government make short term decisions of such magnitude while remaining transparent and appropriate?

2. How does the Government effectively conduct due diligence on organisations when under critical time constraints?

3. How does Paladin control the narrative to minimise reputational damage which will inevitably have a follow-on effect to their operations and future opportunities to win ongoing or similar tenders?

4. How does Paladin manage potential conflicts of interest?


No fix in sight for Melbourne's flammable cladding crisis

Following two high-profile Melbourne fires and London's 2017 Grenfell tower blaze in which 72 people died, it has been claimed that scores of buildings around Melbourne remain covered in flammable panels. The ‘aluminium composite panels’ are claimed to have the potential to catch fire and burn quickly.

  • Despite the concern there appears little sign cladding is being removed with any urgency.

  • The safety issue is believed to have arisen due to lax building checks in the property industry and the popularity of the light-weight cladding. Of the 2,000 buildings audited so far, 360 have been found to be high risk, 280 of moderate risk, and 140 of low risk.

  • Owners of buildings covered in highly flammable materials are being ordered to move smoke alarms closer to danger zones as a stop-gap measure to prevent deadly fires from spreading. Melbourne City Council has issued 49 'Show Cause' notices as to why the dangerous cladding could not be removed within 60 days, warning their premises were ‘a danger to the life, safety or health of any member of the public or of any person using the building’.

  • Of the 2,000 buildings audited so far, 360 have been found to be high risk.

  • One of Southbank's residential and serviced apartment tower features a "fin" architectural feature that runs the building's length – which is made of the highly flammable aluminium composite panels. Melbourne City Council last October ordered building owners to urgently install smoke alarms in all bedrooms that faced onto the fin. Works to remove the flammable fin have been quoted at more than $1 million.

  • Perhaps shifting the location of smoke detectors will change colours on someone's risk register from red to orange, but it is questionable whether it will actually mitigate any risk. This appears to be an issue where numerous stakeholders and the significant costs involved to remedy the issue have stunted decision-making and any commitment to fix the flammable cladding safety issue with any urgency.


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