The government has quietly put the management of onshore immigration detention centres out to tender, raising the possibility that Serco will lose the job — or that centres will be shut as part of an overhaul of asylum seeker policy.

All Australia’s immigration detention centres, onshore and offshore, are privatised, and there’s billions at stake for the multinational giants that bid. British services behemoth Serco runs all eight onshore centres (including Christmas Island, Villawood and Curtin). Serco started that contract back in 2009, and it’s worth an eye-watering $3 billion.

The contract expires in December this year, and the Immigration Department has just issued a “request for tender“, inviting bidders to flag their interest.

It’s not been revealed how long the contract will go for or what it might be worth (immigration insiders told Crikey it would be hundreds of millions). A contract is due to be signed in September; there’s no reason Serco can’t bid again.

This re-tendering comes as the Coalition government changes the system for handling asylum seekers who arrive by boat. The previous Labor government processed asylum seekers in Serco’s onshore centres, then switched to offshore processing near the end of its tenure. Liberal leader Tony Abbott built an election campaign around “stopping the boats” via a tougher policy that sends all arrivals offshore, to Nauru and Papua New Guinea, without much hope of being resettled in Australia. That’s why Immigration Minister Scott Morrison has been sweet-talking Cambodia; he wants to settle refugees there.

The Coalition’s policy has been blasted for being cruel and leaving vulnerable people in limbo. But Morrison says it’s working; last night he told 7.30 there had been no boat arrivals for 16 weeks.

As boat arrivals are deterred, repelled or sent to camps overseas, Serco’s onshore immigration camps are emptying. As of February 28 there were 4269 people in onshore camps. That’s 1120 fewer people than one month prior — a big drop. So where are the people going? Some are being sent to Nauru and PNG, where there were 2432 people in February. And some are being released into the community on bridging visas, which the government keeps pretty quiet about. There are now almost 24,000 people on immigration bridging visas, and that number is rising.

People in onshore detention centres as of February 28 (source: Immigration Department)

Putting the onshore camps up for tender raises the possibility Serco may lose the contract. The Coalition government has form here; it prised the management of PNG’s Manus Island centre from London-based security contractor G4S amid concerns about the centre’s management (asylum seeker Reza Berati was killed on Manus on G4S’ watch). Sydney-based construction firm Transfield won the job. Transfield now has a $1.22 billion contract to run both Manus and Nauru.

However, immigration sources (who did not wish to be named, but have never worked for Serco) told Crikey the company might well retain the contract if it wanted it. One insider says Serco has done a “good job, but not excellent”. The company has had problems; last year it sacked an employee for a sexual relationship with a detainee and sent three employees back to the mainland for drinking alcohol. Some staff threatened industrial action earlier this year. Detainees have escaped. But insiders reckon the rate of stuff-ups has arguably been acceptable for such a large contract.

It’s a different story back in the UK, where Serco has faced a criminal probe and plenty of scandal over allegations it overcharged the government for e-monitoring of prisoners, leading to a ban on the company bidding for public sector work. For the record, Serco also works on Britain’s nuclear weapons and Skynet 5 military satellite communications network.

But all that might not scotch its chances of retaining the Australian contract — and there are not many providers who have the scale and skilled workers to do it. Transfield, which mainly works in mining and property, would be one alternative. Morrison talked up Transfield last night: “I think they have shown real promise in the way they’ve transitioned the services there [on Manus].”

There’s speculation on what the new immigration contract might be worth. Arrivals have slowed, but there are still a lot of people in the system; Morrison told 7.30 that “50,000 and more [people] turned up under the previous government”.

It’s also likely the new contract will involve closing some of the camps. So far this year Morrison has closed four camps (some were residential housing, not detention centres, but you get the idea). Last month he flagged that he wants to close more detention centres. The table above gives some hints as to which ones might be shut. Labor has previously indicated it doesn’t oppose the closure of detention centres.

Crikey put questions to Serco, but the company directed our enquiries to the Immigration Department. Serco holds a second Immigration Department contract running community-based accommodation, which lasts until 2015.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey