Work has started on the controversial men's prison at Wiri amid claims that the Government still has not told taxpayers what it's going to cost.

Corrections Minister Anne Tolley turned the first sod on the $840 million, 960-bed facility on Thursday, saying it would create up to 1300 jobs - 1000 in the construction industry and 300 in the prison when it opens in 2015.

Re-offending rates are also expected to drop when the country's first public-private prison opens with a focus on rehabilitation, she says.

The prison, next to the Auckland Regional Women's Correctional Facility, will be run by the SecureFuture consortium of Fletcher Construction, Serco and Spotless Facility Services.

Reports show it could also bring a hefty benefit to the companies involved. Serco told the British Stock Exchange this month that it expects revenue of up to $30m a year once the prison is built.

But Ms Tolley says taking the public-private route will cost $170m less than if the prison is acquired through "conventional means".

Serco already runs Mt Eden prison where it failed to meet 48 per cent of its performance targets, according to its year-end performance results last week.

Targets it didn't meet included those for escapes - two offenders had managed to evade authorities so far.

But Ms Tolley says she continues to have faith in the company as it was improving with August results showing it met 34 out of its 37 targets.

The company's expected revenue is not important if it achieved its goals - which include performing 10 per cent better than Corrections in reducing re-offending rates, she says.

"I'm interested in performance, I'm interested in how many people leave this prison and go out and live decent lives in the community."

But Labour attacked Ms Tolley for trumpeting the prison's benefits before she made the cost to the taxpayer public.

Ms Tolley must by law table the contract between Corrections and the consortium, Labour's Justice spokesman Charles Chauvel says.

"I challenge her to do so before the House rises on Thursday rather than drop its details during a parliamentary recess which I am sure is her plan."

Mr Chauvel says Serco has told the London Stock Exchange it expects revenue of £15 million (NZ$29m) a year from operating the prison and £2m from the period before the prison opens.

That means the exchange has more information than New Zealanders about what the taxpayer will pay.

"This is a contract by which the Government will attempt to bind Kiwi taxpayers for 25 years.

"Parliament was not consulted in advance about its terms," Mr Chauvel says.

"A number of parties in Parliament, including the principal opposition party, oppose the principle of private sector management of prisons."

Fairfax NZ News

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