Serco loses £132.5m New Zealand prison contract

UK-listed Serco has been told that its contract to run Mt Eden Prison in Auckland, New Zealand will not be renewed.

Newstalk ZB reported Cabinet announced the decision overnight UK time after it was recommended by Department of Corrections chief executive Ray Smith.

Serco will hand over control of the prison in March 2017.

Management of the jail was taken off the company after a string of incidents including prisoner assaults and fight clubs earlier this year.

The 10-year prison management contract, which was valued at NZ$300m (£132.5m), was signed in 2010 and was up for review after six years.

New Zealand’s Corrections Minister Sam Lotu-Iiga said it didn’t look as if Serco has grounds to challenge the decision, and its response has been to accept it.

It’s the latest in a string of bad news for the outsourcing company in New Zealand.

In July, TVNZ reported gang members were engaging in organised fights Mt Eden Prison and filming it on contraband mobile phones, with the footage posted to YouTube.

A few days later, The Department of Corrections said it received allegations of mistreatment of prisoners in the Serco-run prison.

Those events led to a review and the Government putting the prison operator on notice.

Last week the Ombudsman warned urgent action was needed after it emerged teenagers at Mt Eden prison were being kept in their cells for up to 23 hours a day.