With the capacity of the Christmas Island detention centre being ramped up to 1600 courtesy of bunk beds, demountables and cannibalising of part of the “activities area”, the Government is evidently hoping it can prevent more than another 600-odd asylum seekers arriving by boat.

Earlier in the week the Prime Minister appeared to categorically rule out reopening Baxter Detention Centre near Port Augusta in South Australia, although you might have to fact-check Mr Rudd’s statements on this issue – no one appears to have noticed that on Wednesday he boasted to the ABC that “we’ve abolished the Pacific solution. We’ve abolished Temporary Protection visas and we have taken children from behind the razor wire.”

In fact it was the Howard Government that sharply reduced the practice of detaining children.

A number of the facilities used to house detainees earlier in the decade other than Baxter have also been closed. The most remote centre, Curtin, closed in 2002. Woomera was closed in 2003. Port Hedland was closed in 2004. The facility in Port Hedland is different to most of the other facilities in being close to a major centre – and in fact one of the major beneficiaries of the resources boom in the Pilbara. Port Hedland struggled through the mining boom with the task of housing the influx of workers for mining companies and support services.

The detention centre, located on the beachfront in Port Hedland, is thus prime real estate.

In 2006-07, the Howard Government, in response to lobbying from the local council and business in Port Hedland, put the facility out to tender. In July 2007, it finalised a contract with services company Auzcorp. Details of the contract, including the value of the lease, have not been revealed, but Auzcorp, which formally took over the facility in December 2007 and began paying rent in March 2008, has turned it into a 400-bed accommodation facility for in-bound mining workers called, aptly, Beachfront.

Auzcorp is a private company part-owned by the Prime Minister’s brother, Greg Rudd. Having closed his Australian lobbying outfit in 2007 due to conflict of interest concerns, Greg Rudd’s primary business interest now is his Chinese consultancy GPR. Rudd, who is based in Perth, states on the GPR website that he is “heavily involved in the growth onshore and offshore of a Perth based remote accommodation and site services company called Auzcorp, well known in the Pilbara region of West Australia.”

The decision to lease the Port Hedland facility to a company part-owned by Kevin Rudd’s older brother was made by the previous Government. Auzcorp beat a number of competitors for the lease, which attracted strong interest from a several companies, including BHP and Fortescue.

The Howard Government included a clause in the contract that the Commonwealth could, at two months’ notice, take back the facility if it needed it for accommodation for asylum seekers. With the permanent closure of Woomera and Curtin, Port Hedland and Baxter remain the only options for significant expansion beyond Christmas Island.

The Department of Immigration told Crikey there were no plans whatsoever to retract and re-open Port Hedland.

The lease, however, is only for two years. It commenced in March 2008 and expires March next year. In recent months, despite the rising number of boat arrivals of asylum seekers from Sir Lanka and Afghanistan, the Department of Immigration rolled over the Port Hedland lease. It has been quietly extended with Auzcorp, for a further two years, to March 2012.

As the resources sector returns to growth, the accommodation pressures in Port Hedland will resume again. There were also complaints about the detention facility from the local community while it was in operation, including about tear gas wafting into the town during riots.

In inserting a clause enabling it to take back the facility at short notice, and only offering a two-year lease, the Commonwealth probably reduced the value of the lease substantially. In practice, though, it’s hard to see Port Hedland being used to house detainees again in the medium-term.

But Greg Rudd’s involvement in what two years ago was a straightforward transaction by the Howard Government now has a somewhat problematic appearance given the changed circumstances of boat arrivals and the rollover of the lease. His company appears very well-placed for “onshore growth”.