Rt Hon Sir William Birch

Minister of Finance
26 October 1999

SETTLEMENT CUTS INCIS COST TO $82.5 MILLION

'70% Delivered for 70% of the Budget'

The INCIS settlement between the Crown and IBM now permitted publication, for the first time, of a transparent account of the costs of the project in relation to the benefits achieved by Police, Finance Minister Sir William Birch said today.

He said the figures showed that the cost of the project and the benefit received for the money had both been profoundly misunderstood by most critics, and the general public had, as a result, been misled on both the costs and the benefits.

"The original project budget for INCIS was $98m. That project budget was extended, in 1998, to $119m. The total cost of INCIS to 1 October 1999 has been $107.5m. Of that sum, $70.4m has been spent with IBM," he said.

"The great proportion of the total cost of INCIS relates to a $65m update to the Police technology platform. This update would have been necessary in any event whether or not the Police had ever commissioned INCIS," Sir William said.

"This new technology platform comprises 2000 PCs, 1084 laptops, 452 printers, 400 servers, a mainframe, local area networks and a nation-wide network. This system has already been rolled out and is in use by Police now.

"By contrast, the cost of application software and software development was, in total, only $18.7m. The costs of application development up to and including INCIS Increment 1 represent only $12.9m of that sum.

"INCIS software is, and always has been, a relatively minor component in the total cost of the project," Sir William said.

"Furthermore, the $25m settlement which IBM has agreed to pay the Crown now reduces the $107.5m total cost to $82.5m.

"That figure of $82.5m represents around 70% of the total $119m project budget, and about 70% of the INCIS project has been delivered in return for that payment," Sir William said.

"That is not the impression which had previously been conveyed to the general public by critics of the project. I hope the availability of these figures will clear away some of the irresponsible myths developed around the INCIS project.

"In any large investment, there are always lessons that can be learned and improvements that can be made," Sir William said.

"The Prime Minister, on 16 August this year, announced her intention to hold an inquiry into the lessons that could be learned from the INCIS project.

"This will allow a more objective analysis of the role of the State sector agencies than that which emerged from the Justice and Law Reform Select Committee's report.

"The resolution of the dispute with IBM is an important step forward. The way is now clear for the Crown to make decisions next year about the best route to take in the future development of Police computing," Sir William said.

ENDS

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