Ministers not warned of prison cost blow-out, inquiry says

An inquiry into the $140 million blow out in regional prison construction project has found officials did not warn ministers of the risk of costs escalating.

National has attacked the large budget increases since the new prisons were planned, but a State Service Commission inquiry found most of those hikes were due to an increase in the number of prisoners to be housed.

The review said the $140 million increase in cost for prisons at Spring Hill, Waikato, and Milburn, Otago, since the 2005 budget was due to officials not clearly indicating the budget figures were indicative estimates.

Increases in materials and labour costs, consent processes and design changes were behind the budget blow out, the report said.

"In our view, the information provided to ministers as part of budget 2005 did not sufficiently or clearly signal the uncertainty around the estimates," the report said.

State Service Commissioner Mark Prebble said there was no evidence of individuals manipulating the process for personal gain.

- NZPA