Simon Power
National Party Law & Order Spokesman

14 March 2006

Minister admits prisons budget cap not guaranteed

Corrections Minister Damien O’Connor has confirmed that he cannot guarantee that the prisons construction budget will not exceed $890 million, despite telling Parliament it would not, says National’s Law & Order spokesman, Simon Power.

“Total confusion reigns in the Minister’s office and in his department.

“Damien O’Connor confirmed today in the House that the Collaborative Working Arrangements (CWAs) with construction companies were not signed off. That means that in accordance with the department’s Final Business Case, the department does not have the ability to cap the forecast completion costs.

“He admitted his error after telling Parliament a few minutes earlier that the CWAs were in fact ‘now in place and I have been given an assurance that there will be no further requirement for money to complete these projects’.

Paragraph 23 of the Final Business Case, dated 15 December 2005, reads: ‘Until such time as the CWAs are established, the department will not have the ability to cap the completion costs.’

“But that document is itself in contrast to the Progress Report on Regional Prisons Development Project, that the Minister sent to the Chair of the Cabinet Business Committee, which says ‘... the Department is confident that no further requests for funding will be required’.

“What a mess. One report says there will be no further requests for money, another says that they cannot say there will be no further requests, and then the Minister gets totally confused over whether the CWAs have been signed off or not, finally confirming that the budget could go higher, despite his previous answers.

“On February 23 I asked him: ‘Can the Minister now guarantee that his department will not spend $1 extra over the $890 million total on the four new regional prisons; if not, why not? He replied: ‘The costs have been reviewed, both internally and by independent quantity surveyors. Based on that work, the department believes that it can complete construction on time and within budget.’

“Surely this type of confusion can lead to only one conclusion: we need a wide-ranging inquiry into the Corrections,” says Mr Power.

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