Prison-unit contractor fails to measure up

Corrections has terminated a contract with a company supplying Chinese-made prison cells.

In 2017, Australian company Decmil won the tender to supply ‘‘rapid build’’ prison units but the project has been mired in delay and construction deficiencies.

The department now looks set to fork out more than $30 million as it looks for a contractor to complete the work and deals with commercial and legal disputes.

A Corrections briefing prepared for the justice select committee states there was also the possibility of further costs under worst-case scenarios.

Corrections finance, property and technology deputy chief executive Andrew Robertson confirmed to Stuff that the contract was terminated yesterday.

Unfortunately, Decmil failed to meet schedule and quality requirements, mainly due to how it organised and managed its work in New Zealand, he said.

The briefing states funding of $406.1 million, plus a tagged capital contingency of $30m and an operating contingency of $12.5m, had been approved to deliver the units for Rolleston, Tongariro, Christchurch Men’s, Christchurch Women’s and Rimutaka prisons. The project was in response to a rapid and unexpected increase in the prison population.

Decmil subcontracted the manufacture and fit-out to the Chinese-based company CIMC.

During quality assurance trips to manufacturing facilities in China, Corrections staff identified a number of issues including design and quality. Decmil was focused on ‘‘cost recovery’’, to the detriment of work on site, the report says.