Corporate Australia Gets Fat on Taxpayer Funded Foreign Aid Contracts

9th January  2011

By  Steve Lewis –  dailytelegraph.com.au

JUST seven corporations have raked in a staggering $1.81 billion in taxpayer-funded contracts under the booming foreign aid program.

But the lack of scrutiny of their achievements and the huge sums being provided to agencies like the  World Bank, which receives $450 million last year, is under challenge.

Aid experts and the opposition are demanding greater accountability of the money spent to tackle global poverty.

GRM International, which recently hooked up with the global Futures Group, had $500 million in  AusAID contracts listed during the past 18 months, including $92 million to encourage Africans to study in Australia.

Cardno, which lists former defence chief  Peter Cosgrove on its board of directors and which reported a record $59 million profit last year, holds $442 million in contracts, including two Indonesian deals worth nearly $100 million.

And Coffey International, which boasts to shareholders how the Gillard government is “spending more” on foreign aid, booked $353.4 million in contracts, including $31 million to try to weed out corruption in Papua New Guinea.

The dividends for shareholders and executives will grow even fatter with Australia’s aid budget forecast to soar to about $8.5 billion by 2015/16.

Foreign Minister Kevin Rudd has pledged to spend record sums trying to tackle poverty in some of the world’s poorest countries. But the hefty rise in spending is causing resentment among some of his ministerial colleagues, who question how wisely the money is being spent.

According to analysis of contract information listed on the government’s AusTender site, SMEC International, which grew out of the Snowy Mountains scheme, had $202.9 million in contracts listed since July 2010, including a $55 million contract for public transport evaluation in Papua New Guinea.

Huge amounts of foreign aid money are encouraging global firms to establish Australian arms – including the US-based URS which had $170 million listed in contracts. This includes the $110 million Strongim Pipol Strongim Nesen scheme – a five-year partnership with PNG to deliver programs in health, education and gender equality.

Overall, the money being paid to private sector corporations, known as “managing contractors”, has dropped to about 20 per cent of AusAID’s overall budget. But aid experts are questioning the checks and balances in a program growing faster than any other area of the commonwealth budget.

Stephen Howes, part of the high-level review of Australia’s foreign aid program, wants a “greater level of scrutiny” of the aid program, particularly given the large increases in funding.

“As the money goes up, the scrutiny should go up as well,” said Professor Howes, who is director of the Australian National University’s Development Policy Centre.

The foreign aid review recommended an “independent evaluation committee” to oversee AusAID’s effectiveness in delivering results.