Incis gobbled $66m of big fund blowout

WELLINGTON - Police have had to write off $66 million of the cost of the abandoned Incis computer project.

Parliament's finance and expenditure committee confirmed the figure yesterday in its report to Parliament on the supplementary estimates for the 1999-2000 year.

The Incis system, which cost $83 million, was abandoned when IBM pulled out after continued cost overruns and delays.

The IBM-developed mainframe is now for sale but in the meantime, and until replacement systems are ready, it is costing $500,000 a month to run. It is not known how much the mainframe will fetch.

The committee report shows police needed a $94.6 million injection of funds during the year, $66 million of which was to write down computer hardware, software and network costs associated with the Incis cancellation.

A further $7.3 million was a loss on the sale of police stations in Christchurch, Dunedin and Queenstown arising from the settlement of a Treaty of Waitangi claim with Ngai Tahu, while $6.4 million was needed to pay for 90 more non-sworn staff after delays in implementing a staff restructuring plan.

Further increases of $15 million were needed to cover lower savings than expected on the police review, which it had been hoped would cut $50 million in staff costs.

Instead, it achieved savings of only $18 million and cost $17 million to undertake.

The review, initiated in 1998, recommended contracting out certain functions, reducing police districts from 16 to 12, establishing service centres to perform specialist functions and restructuring Police National Headquarters.

Its implementation was halted by the Labour-Alliance Government when it took office last year.

In its report, the committee said it was concerned about financial management within police as a result of what occurred with Incis, but had been assured by Police Minister George Hawkins that someone with strong financial management skills was to be appointed.

A ministerial inquiry into the failed Incis project is due to report soon to Justice Minister Phil Goff.

The committee also raised concerns over the losses on the sale of stations at Christchurch, Dunedin and Queenstown, but police told the committee these were partly offset by lower leasing costs.

Tenders have been called for the IBM mainframe and police are concentrating on smaller and less expensive technology programmes.

- NZPA