A Brisbane construction company had $ 8 in assets and had not started trading , when she was awarded a contract with the government - with a final value of $ 1.6 billion - to manage Australia 's offshore processing on Nauru.
The contract has beenawarded after the government ordered a "financial strength assessment" that was actually done on another company.
Canstruct International Pty Ltd owned eight shares at $ 1 in 2017, company records show , when the home affairs department asked KPMG accountants to Assess her for her ability to "provide garrison and welfare services" to over 1,000 refugees and asylum seekers in Nauru.
Since then, the contract - initially worth $ 385 million - has been amended seven times without a call for tenders. The contract now totals $ 1.6 billion. With just over 100 asylum seekers and refugees still detained on the island after eight years, it now costs over $ 4.3 million per an - over $ 350,000 per month - for each person detained.
KPMG has reported its pre-contract A financial soundness assessment was conducted on Canstruct International Pty Ltd: but the government, having twice had to correct its evidence in the Senate, has since confirmed that the assessment was indeed undertaken on a other company, Canstruct Pty Ltd.
Both companies are associated with the Murphy family of Queensland, but the Home Secretary confirmed his contract on condition that 'No recourse against Canstruct Pty Ltd Canstruct International fails to meet its obligations under the contract.
In 2016,the former manager of the Nauru offshore processing facility, Broadspectrum (formerly Transfield), was taken over by the Spanish company Ferrovial, which announced it did not want to continue working on the island beyond its contract expiring in October 2017.
Canstruct Pty Ltd had previously participated in the construction of the detention center on Nauru and was invited to provide the Interior Ministry with a quote to take over the management of the offshore operation.
In August 2017, at the request of the Federal Ministry, the accounting firm KPMG undertook a financial strength assessment of Canstruct International Pty Ltd.
While the document produced by KPMG indicates that this is an assessment of Canstruct International Pty Ltd - calling it" moderate to high financial risk "to assume the contract - the Department of 'Interior confirmed that the financial documents assessed by KPMG were those of Canstruct Pty Ltd. Canstruct International Pty Ltd. had not started trading at that time.
" The financial strength assessment of Canstruct was undertaken for Canstruct Pty Ltd for the years ending December 31, 2014, 2015 and 2016 and not for the company as a whole Canstruct holdings, or Canstruct International, said Home Secretary Karen Andrews. last month in answers to questions from the Senate on notice .
"The department would have no recourse against entitiesties other than Canstruct International, "said Andrews when asked what the government could do if Canstruct International did not live up to its contract.
" An emergency plan has not been drawn up. However, if the department had found Canstruct inappropriate at any point during the procurement process, it would have reconsidered its options. the government and the Home Office had questions to answer about the management of the Canstruct contract.
"No matter how you look at it, the government handed over $ 1.6 billion no-tender contract with an indeterminate company - after the Home Office paid KPMG to perform due diligence on the wrong company.
" It looks like this company got the deal of the century from the Liberal government: its owners risked $ 8 of their own money and, in return, theyhave now received over $ 1 billion in taxpayer dollars.
A spokesperson for home affairs told Guardian Australia: "the department has no concerns about the financial standing of Canstruct International P ty Ltd . The department continues to be satisfied with Canstruct's performance and its ability to deliver key services in a dynamic and complex operating environment ".
The spokesperson said the department had fully cooperated with an assessment by the Australian National Audit Office which concluded that the procurement and management of garrison and social services in Nauru was "largely appropriate" .
KPMG and the Canstruct group bothrefused to answer detailed questions about the terms of the contract, why a company not related was valued, or why the KPMG report said it was a valuation of Canstruct International Pty Ltd. Both cited contractual restrictions.
"We are unable to comment on contractual matters with the Australian government," a spokesperson for Canstruct said. . "The Canstruct Group has been operating successfully in Nauru since 2012 and continues to provide high quality service under the contract.
The Canstruct contract on Nauru has drawn public attention, and forensic questioning in the Senate.
Canstruct was first hired to help build the detention center of Nauru under the Gillard Labor government. Sous the government of the Turnbull coalition, it won its initial contract to conduct offshore operations on the island.
The Canstruct group, or entities which it are associated, have done 11 donations to the National Liberal Party in Queensland.
No refugee or asylum seeker has been sent to Nauru since 2014 . It remains Australia's only offshore processing island, after Papua New Guinea's central Manus Island was declared illegal by that country's Supreme Court.
In September, the Australian government signed an agreement with the Nauru government for a " sustainable "offshore treatment regime on the island.