$1.4m bill to bury Incis project

By EUGENE BINGHAM

The Treasury spent $1.4 million putting the doomed Incis police computer project to death, paying more than $700,000 to consultants alone.

Eight consultants were hired, as well as legal advisers, for the negotiations to settle the dispute with computer giant IBM.

The revelation of another large Incis-related bill for taxpayers has the new Government pondering the wisdom of continuing with a costly inquiry into the saga.

"It's another expense in what can be regarded as a massive waste of money around that project," the Minister of State Services, Trevor Mallard, said yesterday.

"But I think there is a general view that the Crown got off relatively lightly in the settlement, and therefore it's probably fair to say that if money had not been spent getting the best case together, it would have cost taxpayers more."

The $107 million project was abandoned in October - two years over deadline and more than $20 million over budget - when the Crown and IBM reached an out-of-court settlement to end a row triggered when IBM decided it could not complete the system.

IBM paid the Crown $25 million, and the police handed over $18 million for work the company had already completed.

Figures obtained by the Herald under the Official Information Act reveal that hammering out that deal cost the Treasury dearly.

Legal advice cost $590,917, internal costs were $95,295, and $705,875 was paid to consultants.

The consultants included Hughes Consulting, which was paid $250,375, Schmidt & Associates ($153,806), Innovus ($157,817), Deloittes ($79,614) and KPMG ($14,500).

The director of law and welfare in the Treasury social policy branch, Ross Judge, said the costs were reasonable "in light of the probable costs that would have been incurred had we proceeded to litigation."

Citing other reasons for the expenditure, Mr Judge said: "The Crown needed a negotiating team of high calibre, given the risk to the Crown, and we paid market rates for these professionals.

"The negotiations were complex and required input from legal, financial and technical experts."

He also said the "problem" needed an intensive and rapid response.

The police, State Services Commission and Department of the Prime Minister and Cabinet also spent money on settling the dispute. But the Treasury is understood to have incurred by far the largest cost.

Mr Mallard said the revelations came after warnings from police and State Services that taxpayers could expect to face further legal bills from a commission of inquiry set up by the previous Government last month to establish what went wrong with the Incis deal.

The cabinet would consider the worth of continuing the inquiry.

"It would not be right for me to say it should continue or not, but it's appropriate for the Government to say, 'What is likely to be learned'?" Mr Mallard said. "It's clear from reading papers that [Incis] has been a monumental balls-up."

The Police Association wants a halt to spending on Incis.

"We are throwing more good money into what is appearing to be a bottomless pit," said the association vice-president, Casey Kuiper.

"How much more is going to be poured into pointing fingers or trying to clarify things?"