Mt Eden-ACRP set for private management

The joint Mt Eden-Auckland Central Remand Prison (ACRP) has been selected to be operated by a private contract manager, Corrections Minister Judith Collins said today.

Cabinet today decided to approve contract management at the site. ACRP was under private management between 1999 and 2005 when the Labour Government ended the contract on ideological grounds.

"In order to have a world-class corrections system, we need exposure to world-class innovation and expertise," Ms Collins said.

"Contract management at two of our prisons is an opportunity to inject new ideas and new innovations into the corrections sector to enhance public safety, improve rehabilitation and lower costs.

"The size and location of Mt Eden-ACRP, as well as the new facilities being built, combine to make this prison an excellent choice for contract management."

The Department of Corrections will soon release a Request for Proposals to short-listed parties.  Following rigorous evaluation of the responses, the successful tenderer will be announced by the end of 2010.

Ms Collins said contract management at the site would provide opportunities for Maori or New Zealand businesses to participate in managing prisons as either advisers, business partners, or as sub contractors.

Last month the Government announced its intention to commission a new prison at Wiri to be designed, built and operated under a public-private partnership. 

In 2004, filled to maximum capacity with 360 inmates, ACRP had one suicide and only three serious assaults - a low level of serious incidents for an institution of this type. Only 5.5 per cent of inmates returned positive drug tests, compared with over 20 per cent in public sector prisons.

Many of the innovations introduced at ACRP by the contract manager were adopted by Corrections and are still used in the public prisons today.

The prison will operate within the current Corrections framework. All prisoners will remain the responsibility of the Chief Executive of the Department of Corrections.

The contract manager will have to comply with all relevant New Zealand legislation and international obligations.

Prisoners will still have the right to complain to the Office of the Ombudsmen and Corrections' Chief Executive.  The Ombudsmen and Prison Monitors can initiate investigations at any time into any issues.  The Office of the Auditor-General can also at any time, investigate the way Corrections is managing its prison management contract.

Q&A

What does this decision mean?

The operation of Mt Eden-ACRP prison will be competitively tendered and a private sector contractor will be selected to manage the prison under contract for a specified number of years.

What happens next?

The Department will now send a Request for Proposals to parties who were short-listed following the Request for Information process undertaken earlier this year.  Responses will be rigorously evaluated before the Department begins negotiations with a preferred contractor. An announcement on the successful contractor is expected to be made early next year.

There will be a formal transition process before the Department hands over the operation of the prison around August next year.

Who will be the successful contractor?

This decision won't be made until early next year.  The RFP is expected to be released within the next month and, following a rigorous evaluation process, the successful contractor will be announced early next year.

Public safety is the key consideration, so the successful contractor will be a reputable company with extensive prison management experience.

How will savings be achieved - will this be through reducing the number of staff, or what they are paid?

Currently it costs an average of $91,000 to keep a prisoner for a year.   We owe it to taxpayers to actively find ways of reducing those costs while improving standards and security across the board.

There are potential savings on all aspects of managing a prison.  It will be up to the successful contractor to determine how and where they may be made.

Under the legislation the contractor is obliged to employ sufficient staff to ensure they can meet their obligations.  The private provider will suffer financial penalties if the conditions of the contract are not met.  These are strong incentives to ensure adequate staffing levels are kept.

Is this an open tender process?

Yes.  The Request For Information was released through the GETS (Government Electronic Tendering System) website.

Why are they two separate prisons?

Mt Eden Prison was built over 120 years ago and replacement facilities are currently being constructed.  ACRP (Auckland Central Remand Prison), built on the adjoining site, opened about 10 years ago, initially under a contract manager.  Although the two have remained as two separate prisons since then, they will be integrated once the replacement facilities are completed.

How will the Government ensure there is a focus on rehabilitation?

The exact rehabilitative and reintegrative outcomes expected will be built into the contract.  The contractor will need to perform as well if not better than existing prisons.  Active monitoring and reporting will ensure standards are being maintained.

How will the Government ensure prisoners are well treated?

The Chief Executive of the Department of Corrections remains accountable for everything that happens in privately operated prisons - placing privately managed prisons clearly within the ambit and under the oversight of the State.  These prisons will operate within the corrections system, not in parallel to it, and the accountability mechanisms set up within the Corrections (Contract Management of Prisons) Act 2009 clearly recognise and facilitate this.

Under the Act, prisoners remain in the legal custody of the Chief Executive of Corrections at all times.  This will not change when the prisoner is held in a prison operated under contract.                                     

The Chief Executive remains ultimately accountable for the acts or omissions of the contractor.  This will drive a rigorous performance management regime.

Measures will be put in place to make sure standards are being maintained and are actively monitored.

Projected timeline