Sea safety at stake in contract row

AMSA put the contract to tender earlier this year, but after AMS – which is owned by Sydney PE fund Colinton Capital Partners – was the only bidder, it announced via LinkedIn it was taking a different tack.

Yet four months after the announcement and just eight months ahead of the contract expiring, the new strategy remains a mystery to AMS, its workers and the shipping industry, which pays to maintain the network.

AMS chief executive Glen Marshall said global shipping companies were notorious for cutting costs on navigation equipment and the aids to navigation were used to ensure safe passage through busy and complex shipping lanes.

“In 2001, when the government outsourced this work, it did a complete knowledge transfer to AMS Group, and we’ve maintained and enhanced that knowledge and that skill base over the past 22 years,” Mr Marshall said.

“The worst-case scenario is a ship laden with coal or oil opens up on the Great Barrier Reef,” he said, referring to what could happen if key aids were to become inoperable due to lack of maintenance.

While contained to AMSA and AMS to date, the dispute threatens to escalate into a political brawl for Transport Minister Catherine King.

Mr Entsch wrote to both AMSA and Ms King last month expressing concern about the AMSA procurement process, particularly the lack of transparency, timeliness, compliance with Commonwealth procurement rules, the future of the 50-plus specialist staff and the safety risk.

“I would request you urgently engage with AMSA with a view to ensuring that first and foremost safety related to the continued operation of navigation aids is maintained,” Mr Entsch wrote to Ms King,

The shipping industry’s peak body expressed concerns about the process and said it “expects that an appropriate plan as to how the ongoing repair and maintenance of the system will be carried out will be freely published”.

Mr Marshall said while he could understand AMS Group losing out to other bidders, that was not the case and no detailed account of why the contract was not awarded had been forthcoming: “I’ve got 53 staff who are absolutely at risk and who are intimately involved, and that’s all they do.”

An AMSA spokeswoman said it had no plans to take over network maintenance itself and was confident the market would respond to an alternative strategy. Further, arrangements would be in place prior to June 2024.

“AMSA understands that this situation has created uncertainty for the workforce of the incumbent provider,” the spokeswoman said. “AMSA remains committed to maintaining its [visual and electronic aids to navigation] network and a skilled workforce will still be needed by contractors to conduct that maintenance.”

AMS was first awarded the contract in 2001, again in 2006 and in 2014. The final contract was worth $130 million with no scope of inflation adjustment.