Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Govt has no idea of costs until prisons built

Simon Power MP National Party Law & Order Spokesman

9 August 2006

Report confirms Govt has no idea of costs until prisons actually built

National's Law & Order spokesman, Simon Power, says today's report from the State Services Commission on the blow-out in prison construction costs confirms that the Government has been wanton and reckless in its use of taxpayers' money.

"You don't start building a house without knowing how much it's going to cost.

"The report backs up the concerns I've already raised that the contracting methods used, known as Collaborative Working Arrangements (CWAs), leave the taxpayer open to enormous risk because, unlike a traditional contract, there is no quoted price at the start.

"As the report states: 'The actual costs are not known until the project is completed, and any pain-share or gain-share payments have been settled.'

"That risk was compounded by the department's inability to establish the indicative Target Outturn Costs - which were supposed to be settled prior to construction - until after construction had already started.

"The problems don't end there. Corrections adopted CWA without giving any reasons why they chose this methodology."

The report says: 'Analysis of the reasons for preferring CWA ahead of other procurement options was not sufficiently documented'.

"CWAs are also less about getting the most competitive price:

"As the report says: 'The way in which the Department has implemented CWA means that there has not been the usual market testing of prices through obtaining competitive quotes'.

"But what mystifies me the most is how the Minister lost control over the prison construction costs.

"The report says Ministers were not kept fully informed about the risks of cost escalation, but what competent Minister would not ask his officials, 'say, how's that multi-million dollar prison construction project going?'

"Then again, the Corrections Minister has referred to CWAs as 'community work agencies' in Parliament, and his Associate has called them 'closer working alliances'.

"While the Government and Corrections may think this is the end of the issue, there are dozens of questions still to be answered," says Mr Power.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Zimbabwe: New Democracy, Or A False Dawn?

Gordon Campbell: Robert Mugabe = Hosni Mubarak. The current jubilation on the streets of Harare at the fall of Zimbabwe’s dictator Robert Mugabe is genuine, and one hates to be negative about the country’s future. Yet the situation is eerily similar to the scenes in Cairo in early 2011, when a popular uprising swept Hosni Mubarak from power in Egypt. More>>


Gordon Campbell: On The New Pike River Agency (And The Air Strike Wing)

Much of the sympathy the public still feels for the families of the Pike River miners has been sustained by the sense that the previous government – let alone the mining company and the processes of receivership and litigation – has never dealt honestly, or fairly, with them. More>>


Not Going Swimmingly: Contractor Cut, New Dates For Christchurch Sports Centre

“As an incoming Minister, I have been conducting a thorough review of progress on the Anchor projects and to learn of a $75 million budget blowout on this project was very disappointing..." More>>


Tertiary: Allowances, Loan Living Costs To Get Boost

“From 1 January, student allowance base rates and the maximum amount students can borrow for living costs will rise by a net $50 a week,” says Education Minister Chris Hipkins... further adjusted from 1 April 2018 in line with any increase in the CPI. More>>


Foreign Affairs: Patrick Gower Interviews Jacinda Ardern

Prime Minister Jacinda Ardern says discussions have already begun on how to bring climate change refugees into New Zealand under a Pacific seasonal employment plan... More>>


Gordon Campbell: On The Centre Right’s Love Of ‘Nanny State’

You’d almost think it was 2005 again. That was a time when the rugged individualists of the centre-right were being beset by government regulations on the nature of light-bulbs, the size of shower heads, the junk food available at school tuck shops and other such essentials... More>>

Speaking Of Transport: Public Engagement On Wellington Scenarios

“Our work on possible solutions for Wellington’s transport future is ongoing, but has progressed to the stage where we’re ready to share our ideas with the public and seek their feedback to help guide our next steps...” More>>





Featured InfoPages

Opening the Election