Hon Bill English
Minister for Infrastructure
Hon Judith Collins
Minister of Corrections
3 November 2010 Media Statement
Prison PPP gets green light

The Government is taking the next step towards implementing a public private partnership (PPP) for delivering a new prison at Wiri, South Auckland, Infrastructure Minister Bill English and Corrections Minister Judith Collins announced today.

Cabinet this week gave the green light to a PPP arrangement which would cover the design, construction, financing, maintenance and operation of a new prison.

Over the past few months, officials have met with potential market participants and received a very positive response to the project. An invitation for Expressions of Interest (EOI) will now be issued to the market via the Government Electronic Tender Service (GETS).

“This Government has made it clear that we are open to greater use of private sector expertise where it makes sense,” Mr English said.

“The Department of Corrections has demonstrated that in this case it does make sense and that there is an opportunity to introduce innovation that will be beneficial across the wider prison network.

“The Government is committed to ensuring value for money for taxpayers. The PPP will allow us to pay for actual delivered service performance.

“International experience suggests that using an appropriately structured PPP for the new prison will offer savings over conventional procurement methods. In addition it is expected that this PPP will enhance public safety and improve rehabilitation outcomes.”

Ms Collins said the new prison would ensure there were enough beds to cope with the future prison population. An additional 1243 prison beds are forecast to be needed by 2016 to cope with forecast growth in prisoner numbers and the need to replace ageing existing prisons.

A custodial PPP was an opportunity to inject new ideas into the corrections sector to enhance public safety, improve rehabilitation and lower costs.

"In order to have a world-class corrections system, we need exposure to world-class innovation and expertise," Ms Collins said.

“The successful operator will be required to deliver innovative rehabilitation and reintegration services. It will also be critical that they can meet the needs of Māori and provide effective Māori-specific services.

“Only consortia with experienced and reputable builders and prison operators will be considered. It is very likely that international companies will partner with local businesses and organisations to provide local knowledge, advice and services.”

The proposed prison will operate within the current Corrections framework. All prisoners will remain the responsibility of the Chief Executive of the Department of Corrections.

The prison will have to comply with all relevant New Zealand legislation and international obligations.

The Department is currently engaging with local providers to ensure that they are aware of the project and the opportunities that may be available to them.

Notes to reporters:

The closing date for responses to the EOI invitation is 22 December. A Request for Proposal is expected to be issued to short-listed parties in March 2011, with preferred bidder selection expected by October 2011. There will be a single contract for the design, build, finance, maintenance and operation of the prison. The term of the contract will be for 25 years. The prison will accommodate approximately 1,000 sentenced male prisoners.

The Department has recently lodged a designation application with the Environmental Protection Authority seeking approval to establish the new prison in land owned by Corrections that is adjacent to Auckland Region Women’s Corrections Facility. Construction is expected to start towards the end of 2012. The prison is expected to be ready to receive prisoners by the end of 2015.

ENDS

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