5 September 2007

MEDIA STATEMENT

Immediate Release

Report Assists with Future Construction Projects

A report commissioned by the Treasury and the Department of Corrections has identified a number of options to be considered in any attempt to reduce costs in future prison construction.

Part A of the report, by consultants Evans and Peck, looked at two prisons then under construction, Spring Hill and Otago, to see whether savings could be made. It found that significant cost savings were unlikely, given that construction on both prisons was well advanced. However minor savings were able to be made during the finishing stages.

Part B of the report compared Spring Hill and Otago with similar facilities in Australia.

It noted that the two New Zealand prisons generally conformed to Australasian Guidelines, and were similar to Australian comparators in many areas. However, some areas were identified where Spring Hill and Otago exceeded the design standards of the Australian prisons. For example, they were built with ablutions facilities in every cell, rather than communal facilities.

This approach was more expensive, but would allow the medium-low security facilities to be converted easily to medium-high security if needed in future.

The report also noted that some cultural and religious facilities at the New Zealand prisons were of a higher standard than in the Australian comparator prisons, as were dining and recreational areas.

It suggested that costs had been increased by the tight deadlines for building the prisons. Value management activities were found to have been appropriate given the significant time constraints; however, costs could be reduced in future by allowing longer lead-times, giving more time for negotiating contracts and options for compliance with the Resource Management Act, fire regulations, and other procedural requirements.

Reviewing cost drivers such as design standards, operational practices, contractual arrangements, and regulatory requirements also offered possible ways of saving money.

“Building these two prisons was an enormous undertaking, the equivalent of building two small towns,” said Treasury Deputy Secretary Peter Mersi as he released the report.

“As with any large project, it is important that lessons are learnt for reducing costs and improving delivery in future. It is worth bearing in mind that prison conditions and requirements – and therefore costs – do differ in some ways between Australia and New Zealand.”

Both agencies noted that the actual value of potential savings could not be independently verified.

“But the report highlights some design alternatives and contains some useful insights, which will be taken into account when building any future prisons,” Corrections Chief Executive Barry Matthews said.

ENDS

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