Issues with extending an Australian prison are being resolved, says the New Zealand building boss whose business is part of the project consortium.

David McConnell, Auckland-based acting chief executive of Hawkins Construction and managing director of McConnell Group, said there was no risk to the New Zealand business from the Ararat prison project.

Two years ago, New Zealand's second largest building business and one of the country's most experienced prison builders was short-listed in the consortium which won the A$395 million job to extend Victoria's Ararat prison in a public private partnership.

But big cost overruns, delays and the collapse of another builder in the consortium have now been linked to this month's sudden departure of successful Hawkins chief executive Chris Hunter, after 9-years at the business that has a $750 million turnover.


Hunter was the boss when Hawkins won its biggest jobs including building new terminals and the control tower at Christchurch International Airport, the $121 million Auckland Art Gallery refurbishment, restoration and extension, the Aotea Square and Aotea carpark projects for Auckland Council and other local government jobs worth $425 million.

McConnell indicated yesterday that he expected problems at the prison job to be resolved shortly and that work there was about half finished.

"We are committed to the project and we're continuing to work with the project consortium which is Aegis Correctional Partnership and Bilfinger Berger to resolve how we complete it. It's not like it's all stopped. We are moving forward and working through to reach a resolution and that's being done in a very collaborative manner.

"From an overall Hawkins Group standpoint, we believe that the risks associated with the project have been identified," McConnell said, "and they are contained and manageable and have no direct bearing on the New Zealand operations."

Melbourne's Age reported this month that the future of Victoria's newest jail, needed to cope with soaring rates of imprisonment, was in limbo after the project builder collapsed, freezing work on construction sites across the country.

The failure of St Hilliers Construction meant 16 other projects the company was working on, including some under contract to the Victorian and federal governments, might be sold off or shut down, the newspaper said.

St Hilliers Construction, a subsidiary of Sydney-based property investment group St Hilliers, entered voluntary administration this month after failing to secure a A$150 million bailout of the prison project from the Victorian government, the paper said.

The project was said to be 18 months behind schedule. The prison, 240km northwest of Melbourne, will have 700 cells when finished in two years.

* Hawkins Construction.
* Commonwealth Bank.
* Bilfinger Berger Project Investments.
* St Hilliers Construction (has voluntary administrators).