Power Simon: Questions for Oral Answer — Questions to Ministers 
Power Simon: Questions for Oral Answer — Questions to Ministers 
[Volume:632;Page:4497] 
12.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister of Corrections 
: Does he have confidence in his department; if so why? 
Hon DAMIEN O'CONNOR (Minister of Corrections) 
: 
 Yes but there is always room for improvement. 
Simon Power 
: Does he stand by his statement made in the Law and Order Committee that the $490 million blowout in the cost of the four new prisons is due to the addition of 530 more beds and in light of the fact that this would equate to nearly $1 million per bed does he now concede that his department has been reckless and wasteful in the spending of taxpayers’ money? 
Hon DAMIEN O'CONNOR 
: There is no $490 million blowout. The projected costs of the total regional prisons development project have risen. The number of beds that we planned originally—1000—has gone up to 1600 beds. There have been issues of the additional costs of steel in a very buoyant economy which is something this Government takes a lot of pride in having contributed to. I am confident that we will build four very good new prisons to deal with the issues ahead of us. 
Simon Power 
: Can he confirm to the House that the reason he could not give the original target budgets for the construction of the four new prisons in his answers to written questions was that under the highly unusual contracting arrangements used known as collaborative working arrangements or “CWAs” there was no guaranteed maximum price? 
Hon DAMIEN O'CONNOR 
: Collaborative working arrangements or other complex management agreements are part and parcel of large projects around the world today. That member cannot understand that an agreement like that which shares the burden of any additional costs is the best way forward. I am confident that the State Services Commission’s report will answer all those queries. 
Simon Power 
: Can the Minister confirm that collaborative working arrangements are the brainchild of Mr Stewart Rix who was contracted for almost a million dollars to establish contracting frameworks for the construction project without a competitive tender process because he was “the only New Zealand - based provider of collaborative working systems” and can he give one example of a project where collaborative working arrangements have been used successfully anywhere else? 
Hon DAMIEN O'CONNOR 
: I cannot give details on the collaborative working arrangement other than to say it is a programme of management designed to share the risk between the designer the constructor and the owner. I do know that up and down this country there are challenges in courts of law as to the final costings for many projects because that has been part and parcel of a growing vibrant economy with huge market demands. 
Simon Power 
: Can the Minister confirm that under the collaborative working arrangement approach contractors lose a proportion of their margin if forecast costs are exceeded but if costs blow out any further “it is the department only taking responsibility” as stated in a Department of Corrections report; why are taxpayers carrying the $490 million can for this suspect contracting arrangement? 
Hon DAMIEN O'CONNOR 
: The reality is that under a Government that takes full responsibility for taxpayer-funded services across this country we ultimately carry the responsibility and the costs over a whole range of Government services. We will continue to do that rather than privatise everything as the National Party would—including prisons. 
Simon Power 
: Can he confirm that the construction of the four prisons is being so poorly managed that contractors at the so-called “Milton Hilton” were asked to build a wall then to take it down and build it somewhere else then to take that one down and build it somewhere else and finally to take that one down and rebuild it in the original spot; does the legend of the Velcro wall not simply epitomise the massive wastage that his department has incurred at the expense of the New Zealand taxpayer? 
Hon DAMIEN O'CONNOR 
: I am not aware of any claims of a wall or a building being shifted four times. I can say that the Ngawha prison and the Auckland women’s regional prison were both finished within budget and on time. 
Simon Power 
: Can he now advise the House of any construction programme anywhere in the world where collaborative working arrangements have been used successfully better and more effectively than a traditional master-servant contracting arrangement? 
Hon DAMIEN O'CONNOR 
: I am aware of a number of different arrangements around the world where the costs of any blowouts are shared between designers constructors and final owners. “Collaborative working arrangement” is just a title used in New Zealand; this is a common international practice.