The sad end to my near five-year OIA battle with Corrections

I am not a New Zealand record holder in many areas of life, but I now believe I hold one title, at least as far as the public record goes: the instigator of the longest, most drawn-out complaint to the Ombudsman about government’s abuse of the Official Information Act.

A few weeks ago, I received a final opinion on a complaint that I lodged in September 2011. Nearly five years elapsed between instigation and completion. Whatever else has happened in this ludicrous affair, one thing is obvious: no result that takes five years can ever be satisfactory. The Ombudsman’s office is colossally under-funded and cannot deal with complaints at anything approaching an appropriate speed.

As to the substance of the complaint, it concerned the Department of Corrections’ decision to use a public-private partnership (PPP) to build the new prison at Wiri. Under a PPP, a private company designs, builds and operates a public facility for several decades.

There are many reasons to object to this method of providing new prisons.* One is that the final cost of the facility has often become greatly inflated, through the negotiation process, from the original cost of building it the normal way when government just tenders the construction part. This puts a big question mark over claims that PPPs provide value for money. I know this because I often wrote about them when I worked as a journalist in the UK.

Accordingly I asked in mid-2011, under the OIA, for Corrections to release to me the initial ‘business case’ for building the prison the normal way. They refused; I complained to Ombudsman.

I won’t go into all the ins and outs of the next five years, except to say that the usual pattern was that I would hear nothing for months, presumably because the Ombudsman was so over-worked; they would apologise and ask Corrections to release more information; the department would do so, but it would not go any further to answering my request; I would point this out to the Ombudsman; and then the cycle would repeat.

In the end, the Ombudsman forced Corrections to release a lot more information, but found in their favour on the key point, that they were right to refuse to say how much the prison would have cost as a straightforward building contract.

Corrections’ defence was that releasing that information would “prejudice or disadvantage the Department in future procurement negotiations in relation to upgrading existing prisons or building new capacity”. This is because, in future negotiations, “there was a real possibility that a tenderer, with knowledge of the component parts of the Departments’ estimates of costs … would pitch its tendered costings close to the Department’s”.

I think this is quite wrong, and hugely dangerous to the public interest. Surely the point about competition is that if any firm pitches its costs high in order to extract more profit, it will be undercut by another. If that doesn’t happen, there’s no genuine competition, only cartel-like behaviour, and other procurement methods have to be used. More importantly, the public’s right to know whether money is being wasted should trump all these concerns.

All this information is made available in other countries, like the UK, so it’s clearly not necessary to keep it private. The Ombudsman noted that I didn’t provide evidence that this is what happens in the UK, but – amazingly enough – after five years of this, and at a time when I have other projects occupying my energies, I wasn’t going to try to find reports based on files I no longer have and articles behind the paywall of a magazine for which I no longer work.

In any case, that’s the sort of work the Ombudsman’s office should be doing, if it were properly funded. And that fact – the lack of resources for a crucially important public office – is what really stands out from this sorry affair.

*Other reasons to be concerned about PPPs are as follows. Private companies pay more to borrow and have to make profits, so inherently have higher costs than the government does. Drawing up the contracts for such a complex deal costs a fortune – the procurement costs on Wiri alone were $21 million, a feast for the lawyers and other consultants. Even then not all eventualities can be predicted. But once the prison is up and running, the existence of a contract makes it very difficult, or expensive, for the government to change how it wants to run the facility. In the UK, for instance, PPP schools have closed owing to falling rolls but the government has had to keep paying for them, because that’s what the contract stipulated.


No Comments Permalink

Say something

Your email address will not be published. Required fields are marked with a grey bar.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>