Corruption, incompetence and death: the 'benefits' of privatisation

May 28, 1997
Issue 

By Bronwen Beechey

MELBOURNE — On May 7, two fire emergency vehicles raced through rain and peak hour traffic to the inner suburb of Carnegie, where a semi-trailer had reportedly overturned, trapping its driver. Finding nothing, the crews requested further information and were eventually told that the accident was in Sydney.

The incident prompted the United Firefighters Union (UFU) to announce it would stop work, under provisions of the Occupational Health and Safety Act, if concerns over the Intergraph emergency dispatch system are not resolved.

According to Peter Marshall, secretary of the UFU, firefighters have lodged nearly 1500 reports of problems involving Intergraph since July 1996. "Most of these involved delays caused by wrong addresses or Melway references, or inappropriate vehicles being sent. In an emergency service, any delay is potentially life-threatening."

On May 19, the Coroner's Court heard that a 26-year-old man had died in February of a drug overdose after an ambulance took over an hour to arrive. The court was told that Stewart Marshall might have been saved if he had received paramedic help before he stopped breathing, 25 minutes after his father found him unconscious and dialled 000.

There have been six other coronial inquests into deaths involving delays in ambulance or fire services since 1994.

A report tabled in the Victorian parliament on April 24 alleges that the Metropolitan Ambulance Service showed total disregard for government guidelines in awarding contracts worth $32 million between 1993 and 1995.

The report, by auditor-general Ches Baragwanath — whose position is under threat from the government — revealed that police had launched an inquiry into allegations against MAS, but that their investigations were hampered by the disappearance of key documents.

Baragwanath suggested that "a legal inquiry, in which witnesses were required to give evidence under oath, may be necessary to determine whether the various contractual arrangements of the service ... at best involved serious mismanagement, or at worst, constituted corrupt activity".

Premier Jeff Kennett, health minister Rob Knowles and former health minister Marie Tehan all deny any knowledge of breaches, saying that the government become aware of the situation only in May 1996, when Knowles ordered the auditor-general's investigation into the tendering process.

However, on May 20, a memo written in February 1996 from the chief executive officer of MAS, Peter Olszak, to Tehan was leaked to the press. The memo referred to freedom of information requests by Labor health spokesperson John Thwaites, and warned of political risks from the fact that MAS did not comply with normal procedures in obtaining at least three independent bids.

Tehan maintains that she did not see the memo.

The Intergraph saga began in 1993, when the recently elected Kennett government replaced the existing MAS committee of management with Jack Firman, a long-serving bureaucrat with no experience in emergency services.

Although a 1992 coronial inquiry had recommended increased staffing and the merger of the six separate Victorian ambulance services, the government's agenda was different. It soon became clear that Firman had been hired to cut costs and break the union.

The auditor-general's report states that the abuses of the tendering process occurred during Firman's period as manager from 1993 to 1995. Shortly after Firman's appointment, Griffiths Consulting was hired to conduct a review of the service, allegedly with no regard to government tender guidelines, and at an eventual cost of $1.5 million. Another firm with previous commercial links to Firman was awarded a $440,000 contract without tender.

The salaries of Firman and another senior staff member were paid into Firman's private company.

In September 1993, the MAS information services manager sent Firman a memo outlining serious functional and technical shortcomings in the tender specifications and noted that they were obviously written around the Intergraph system. Despite these reservations, Intergraph was offered the contract less than a month later.

In March 1994 the contract was signed; two days later, senior MAS managers travelled to the US, supposedly to assess Intergraph's operations. In December 1994 the contract was varied to allow Intergraph not only supply to but also to operate the emergency system.

During 1993-4, Firman instituted a series of three-day live-in courses for MAS middle management. These courses were described by some participants as "mini-Camp Wacos" at which participants who expressed opinions critical of the new management line were subjected to emotional and personal abuse which left them exhausted and traumatised.

Over this period, the number of full-time operational officers dropped from 768 to 674, and the cost of departure packages jumped from $1m to $5m. The MAS Regional Training Unit was closed, and attempts were made to force ambulance officers to improve their knowledge and skills in their own time.

In March 1995, Intergraph appointed Griffiths Consulting's owner, Grant Griffiths, as director and CEO of its Australian subsidiary, Intergraph Public Safety.

Another former manager of MAS, who was responsible for outsourcing contracts for non-emergency patient transport, was also involved in a companyDthat was awarded one of the contracts. In September 1995, the mD that was awarded one of the contracts.

In September 1995, the ministers responsible for emergency services approved the extension of Intergraph to fire and police services, despite a November 1994 report from the Metropolitan Fire Brigade's director of technical services describing Intergraph as "a very high risk and significantly lacking in its ability to meet MFB requirements".

The Intergraph system is not operated by qualified fire, police or ambulance officers, but by employees who are expected to determine the urgency of response by asking a series of set questions.

The system was designed to transfer information quickly to mobile computer terminals in emergency vehicles, eliminating the need for radio directions, which can be misinterpreted. This equipment has never been delivered.

If several emergencies happen at once, bottlenecks occur. During the bushfires that occurred in the Dandenongs earlier this year, the system became so overloaded that emergency services resorted to whiteboards to keep track of events.

According to Rod Morris, Victorian secretary of the Ambulance Employees Association (AEA), the division of the service into emergency and non-emergency was one of the greatest blunders. In a recent union bulletin, he pointed out that "these two divisions no longer maintained essential and satisfactory lines of communication in real time and could no longer support each other. It appears that this simplistic categorisation was implemented to facilitate the privatisation of profitable non-emergency work."

The AEA had reached agreement with MAS and Intergraph in 1995 to assign MAS communication officers to the Intergraph communications centre, but the agreement broke down because Intergraph failed to meet minimum staffing levels or provide the MAS officers with the necessary training or equipment. Morris describes the situation as "an absolute disaster".

Both the UFU and AEA are supporting calls for an inquiry. "The system was flawed from the beginning", says Marshall. "The whole business is very smelly."

Rod Morris says that the implications of the Intergraph affair go beyond the actions of a few individuals. "The whole business is symptomatic of the Victorian government's drive to privatise at all costs. When you privatise essential services, the core focus changes from providing help to people in emergency situations to making a profit.

"The worst aspect of the Intergraph affair is not the cost, but the fact that the government lost control of essential services, and as a result people died unnecessarily."

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