New Zealand prison PPP awarded

A contract for a public-private partnership (PPP) to design, build, finance, operate and maintain a prison in New Zealand has been awarded to a consortium led by Fletcher Construction.

Fletcher said the consortium, named SecureFuture, also comprised Serco, operator of the Mt Eden Corrections Facility in New Zealand, and Spotless Facility Services, which will maintain the prison. John Laing Investments, a subsidiary of London-headquartered John Laing, is also a member of SecureFuture.

Fletcher said work on the prison will commence in the second half of 2012, when the contract is finalised, adding that the prison should open in 2015.

The contract has a 25-year concession, according to Auckland, New Zealand-headquartered Fletcher, which stated the exact price of the PPP will not be determined until SecureFuture and the government of New Zealand reach a detailed agreement. 

However, Fletcher indicated the contract is “capped” at $900 million, or 10 percent below the cost of conventional procurement, according to the firm.

“The cost of the design and the construction component is subject to negotiation, but is expected to be in the order of $300 million,” said Fletcher, a privately held company operated under Fletcher Building, which is the largest publicly traded company in New Zealand. 

The prison will be located in Wiri, an industrial city. In 2010, New Zealand Infrastructure Minister Bill English and Prison Minister Judith Collins announced the project, a 1,000-bed male prison, would be procured under the PPP structure. The prison was positioned as a flagship social infrastructure PPP, with work in the education sector forthcoming.