Government under pressure over contentious $423m contract awarded to Manus Island security contractor

Labor will use Senate estimates to grill Peter Dutton's Home Affairs department on the awarding of a Manus Island security contract to a company registered to a beach shack at the time.

Source: Abdul Mohammad

A contentious $423 million contract awarded to a security contractor on Manus Island will be scrutinised during Senate estimates starting Monday. 

A little-known company called Paladin, which won the lucrative contract through a closed tender process, was reportedly registered up until last week to a beach shack at the end of a dirt road on Kangaroo Island.

Paladin was reportedly given just one week to submit a tender for the original $90 million security contract in 2017. 

The Age and Sydney Morning Herald reported there were "limited" if any other bidders for the contract after a previous tender process run by the Papua New Guinea government had collapsed.

The contract was awarded as the government prepared to close the detention centre on Manus Island and shift detainees to other complexes on the island. 

Labor intends to grill the Home Affairs department about the decision to award the contract to the firm despite not having enough money to start the contract and its founder having a history of bad debts.

"It's deeply concerning that we've had $423 million of your (taxpayer) money going to a company which has got such a poor track record," Labor Senator Penny Wong said.

Labor Senator Murray Watt is concerned about Paladin's links with senior members of the PNG government. 

"It seems that there may well be a connection between the awarding of this large, taxpayer funded contract and very senior people in the Papua New Guinea government. 

"Another dodgy Dutton deal is just getting dodgier."

Attorney-General Christian Porter defended the process, telling ABC's Insiders program on Sunday, it was subjet to a "full independent Commonwealth procurement process".