Simon Power National Party Law & Order Spokesman

20 April 2006

Corrections pays $2m for budget blowout

The Corrections Department has paid a former employee $2 million - and rising - to oversee a $490 million blowout in the prisons construction budget, says National's Law & Order spokesman, Simon Power.

He has released answers to parliamentary questions which show that Jagcon, a company owned by former Corrections employee John Hamilton, is being paid $1,764 plus gst a day to manage the Regional Prisons Development Project.

"There is something very wrong when someone who is overseeing a massive budget blowout is paid more rather than less to continue overseeing a project that is a botch-up.

"What was going so well in the prisons construction mess that John Hamilton's daily rate was able to increase from $1,000 plus gst a day in 2000, to $1,764 from July 2004 through till April next year?

"And that doesn't include travel and accommodation, which Corrections pays directly to suppliers, but for which it cannot give amounts.

"Not only has this project seen a $490 million budget blowout, but Corrections defends an exorbitant $11 million spend-up for screen planting, ground cover, and paving around the new prisons.

"This is the same contractor who reportedly resigned from Corrections on 13 July 2000 and two days later took up a consulting contract with them worth $200,000 for work that was not put out to tender.

"That contract was varied in 2001 and 2003, both with increases in the daily rate, and the only time Corrections put the contract out to tender was in 2004.

"In 2001, acting chief financial officer Mike Martelli said the position was not advertised because it was a three-year contract and they were not looking for a permanent employee. He said Mr Hamilton had skills that delivered projects on time and to budget.

"Well, three years has turned into five, and $400 million has turned into $890 million and counting.

"Corrections Minister Damien O'Connor has some serious questions to answer," says Mr Power:

* Has the $2 million paid to Jagcon serviced the taxpayer well? * On what grounds has Jagcon's daily rate increased when there has been such a massive budget blowout?

ENDS

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