The Australian government will pay $2.3bn to a subsidiary of a controversial American private prison operator to run the nation’s onshore immigration detention network, ending a longstanding deal with Serco.
Secure Journeys, a local subsidiary of Management & Training Corporation (MTC), will begin operating the centres from early 2025.
A tender document shows the Secure Journeys contract is worth $2.3bn over five years.
MTC also operates Parklea correctional centre in NSW and some offshore processing facilities on Nauru.
It has faced serious allegations of misconduct in a series of civil and regulatory cases in the United States, which were revealed by the Guardian last year after MTC won the $420m Nauru contract.
In one of those cases, MTC was recently cleared of defrauding the state of Texas by taking money for in-prison therapy services it was not providing. When asked about that case by the Guardian last year, MTC said it “provides the best possible programming to clients in our care”.
Tender records show the MTC contract for the “provision of facilities and detainee services” began on Wednesday and lasts five years, ending on 10 December 2029.
MTC referred questions about the contract to the home affairs department.
The British multinational Serco had become synonymous with Australia’s immigration detention system, and accusations of understaffing, violence and self-harm had dogged its long relationship with the immigration department and then home affairs. Its contract expired on 10 December.
The decision ends Serco’s 15-year operation of the centres.
Serco had already told the London Stock Exchange that it had lost the contract and would lose £18m ($35m) due to the decision. Serco said it had put forward a “compelling bid” to continue running the centres and had “high” performance levels under the previous contract.
“If the contract had been retained, we would have expected it to contribute around £165m of revenue in 2025 and £18m of underlying operating profit, which is approximately 6% of analysts’ consensus,” the company said.
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“We will now work to ensure a smooth transition of these critical services to the new provider.”
This year, the Guardian reported on a Serco-developed risk rating tool for detainees that critics said was riddled with flaws and led some detainees to be inappropriately placed within detention centres, among other issues. “The [Security Risk Assessment Tool] considers each detainee’s individual circumstances, including consideration of an individual’s capability…and is reviewed at regular intervals,” Home Affairs said at the time.
As of October 2024, there were 989 people in immigration detention.
“MTC Australia delivers safe, decent and secure services, with a focus on welfare and rehabilitation,” MTC Australia’s managing director, Troy Ittensohn, said in a statement on their website.
“Our parent company Management & Training Corporation (MTC) has been providing high-quality education, corrections and detention services in the United States, the United Kingdom and Egypt for more than 40 years, and we are proud to continue that tradition in Australia.”
