Serco payments defended by Corrections

  • 19/12/2015
Green Party corrections spokesman David Clendon (3 News)
Green Party corrections spokesman David Clendon (3 News)

The Corrections Department is defending payments to private prison operator Serco the Greens allege were bonuses for running trouble-plagued Mt Eden Correctional Facility.

The Greens have calculated Serco received $8 million in performance bonuses since 2011 when it got a 10-year contract to run Mt Eden Prison.

Julie Robertson, the director of commercial operations for Corrections, says the criteria for the payment of the performance-related fee was set out in the contract with Serco.

The fee was worth 10 percent of the maximum services fee.

It was not a bonus, but an at-risk component of the total fee, she said, adding she had concerns about the figures presented by the Greens.

The 2014/15 performance-related fee might reduce because the year had not yet closed for the purposes of calculating the fee, she said.

The Greens say there were deductions from a maximum of possible bonus each year for poor performance and not meeting targets, but bonuses were still paid.

"It is astounding that Serco, which failed to perform its basic job of managing a safe and secure prison, has received so much public money for so-called good performance," Green Party corrections spokesman David Clendon said.

"The Corrections Minister must now review whether the payments were deserved, given what is known about Serco's mismanagement of Mt Eden prison."

Corrections boss Ray Smith announced on Wednesday Serco had lost the contract to run Mt Eden Prison.

Serco's Asia-Pacific chief executive Mark Irwin said the prison had "fundamentally changed" since the 10-year contract was signed in 2011.

"Its population, movements and security profile are all markedly different from those set out in the documents provided to tenderers six years ago, and in the contract itself," he said.

Ms Robertson said after the department "stepped in" it took over custodial management, overseeing operations. Serco was still being paid for operating the prison and Corrections would be seeking reimbursement for all of the costs related to the step-in arrangement.

The department intervened after allegations were made about the prison, including that a fight club operated there.

NZN