Holidays Act, Building Code stoke jail-building blowout

A Cabinet paper released on the prison-building budget blow-out reveals an "astounding" trail of incompetence, the National Party says.

The Government announced in January that the cost of building new prisons had increased by $141 million in just six months.

The paper released yesterday shows Corrections considered terminating existing contracts and retendering them.

It also considered deferring or delaying the building of Waikato's Spring Hill Prison to try to contain costs, but decided the burgeoning prison population made that impossible.

The paper says market influences, regulatory and consent changes and omissions from earlier estimates are the main reasons for the cost increases.

More steel was used than expected and it jumped in price during construction.

Nor did the costings account for regional cost variations, including the need to import labour and resources from other areas and general labour shortages.

Many of those working on the Waikato site were being paid to travel from Auckland every day, while in Otago accommodation costs for labourers was driving up costs.

The implications of the Building Code and the Holidays Act had not been considered, with the latter relevant because overtime was being done on several sites.

The extent of increased labour costs, particularly in Auckland, hadn't been appreciated.

The report lists other omissions and errors, already made public.

National law and order spokesman Simon Power said it "confirmed what National has been saying for ages - that the prisons' construction budget has been caused by incompetence and mismanagement".

It was incompetence of the "highest order, to be building and running prisons and not be aware they have to be built stronger than other buildings", he said, referring to the steel blunder.

Corrections Minister Damien O'Connor said: "The additional costs for any Government department are hard to absorb.

"We are working through that, but we will look at whether there have been any extraordinary circumstances that have contributed to these cost blow-outs."

Green MP Nandor Tanczos meanwhile hopes to set up a behind-closed-doors meeting for justice spokespeople from all political parties to try to reach an accord on prison policies.


Rising costs

* Initial cost of four new prisons $400m
* The latest estimate $890m