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Private prison deal details revealed - finally

18 October 2012

Private prison deal details revealed - finally

The formal tabling in Parliament of a $900 million deal that National has struck with a private sector consortium to build and operate a new 960-bed private prison at Wiri has finally taken place – on the last possible day that it could legally be revealed, Labour’s Justice spokesperson Charles Chauvel says.

“Serco – the consortium member that will operate the prison once it is built - advised the London Stock Exchange on 11 September that it anticipates revenues of just under $30m per year once the prison is built, with revenues before then of around $4m, on the basis of a revenue stream stretching out till 2040.

“An initial perusal of the contract, and a consideration of the business model necessary to run a prison for gain, suggests that much of this income will end up as profit, headed directly offshore.

“Serco has an unsatisfactory record as a private operator of public entities, in New Zealand and elsewhere. As operator of the Mt Eden Remand Centre it has a track record of escapes, bungling and missed performance targets.

“In the UK, its delivery of health services was investigated recently by the health watchdog following allegations that it has been so understaffed as to put patient safety at risk and over admissions that data has been manipulated.

“In Australia, serious concerns have been expressed Serco’s operation of immigration detention centres. It is said that a deliberate policy of short-staffing centres such as Villawood, in Sydney, has exacerbated security and human rights issues encountered there.

“The risks faced by the taxpayer in having a prison built and operated by a private operator, a first for New Zealand, are obvious from these and other overseas examples. Yet National has committed nearly $1billion of taxpayer money over the next 25 years to just such an arrangement.

“All this at a time when there are 1000 surplus beds in the prison system, and where forward projections indicate that the prison population is trending downward.

"National has made a poor decision here, driven more by ideology than by need. The members of the Secure Future Wiri Ltd Consortium need to remain on notice that Labour reserves the right to review the arrangement, with the taxpayers' interests prioritised, when we become Government,” Charles Chauvel said.

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