$7.5m gets jail work moving

The Corrections Department has made a foray into the construction business, spending more than $7 million buying and shipping earthmoving equipment from as far away as Scotland to complete its Springhill Prison project.

It says it was caught short by the national building boom and, unable to find the equipment in New Zealand, forked out for machinery from abroad.

In total the department has spent $7.5 million buying 11 40-tonne all-terrain dump trucks from Scotland, five compactors from America and France and two excavators from South Korea.

The department has struck a deal with the suppliers that once the Springhill earthworks are finished they will buy the equipment back, less a percentage, but it cannot say how much that is.

The department's project director of regional prisons development, John Hamilton, said the situation was "a bit unusual".

He said lead-in times for the equipment to be delivered to New Zealand meant it had to be ordered and paid for before the prison deal was signed off with contractors Henry Walker Eltin and Multiplex.

"The stuff was not available so we made a decision to purchase it. The private-sector contractors were not in a position to purchase it."

He said shipping costs were included in the $7.5 million bill.

New Zealand contracting companies helped with finding the equipment overseas, Mr Hamilton said.

His own experience working as a senior manager for McConnell Dowell Constructors, before he joined the Corrections Department, also came in handy.

"We looked at availability, suitability and value for money."

He said major civil construction underway around the country - including the Orewa motorway extension and several Auckland apartment complexes - had heightened the local demand for such equipment.

He said earthworks at the site had to be finished by next May to make sure that the building of the prison, which is due for completion in mid 2007, was kept to timetable.

"We need to move approximately 1.3 million cubic metres of material in a short timeframe - about 110 days."

Mr Hamilton said the net cost of the deal with equipment suppliers Gough Gough and Hamer, Eagle Equipment and Transdiesel/Terex would be about the same if the department had been able to find the equipment in New Zealand and hire it.

While the equipment was on site the department was responsible for its maintenance and running costs, he said.

"It is a bit unusual, but everybody has accepted it's in the best interests of the project."