Neil Sands
The cost of a failed immigration technology project that public servants tried to hide from parliamentary scrutiny has blown out to more than $50 million and could go higher, the official in charge of the debacle told MPs on Wednesday.
Ministry of Business, Innovation and Employment (MBIE) chief executive Nic Blakeley, whose organisation was last month found in contempt of Parliament for deliberately misleading a select committee, said the waste of taxpayer money and secrecy around the project were unacceptable.
Blakeley vowed to implement “a culture of integrity”. “Sunlight is the best disinfectant. We haven’t been transparent enough. We’re going to be more transparent,” he told an Education & Workforce Select Committee hearing into Immigration NZ’s failed Biometric Capability Upgrade (BCU).
The cost was initially estimated at $31.2 million in June this year, when it was first publicly revealed that the project had gone off the rails.
The following month it rose by an extra $6 million and Blakeley said on Wednesday that the latest guess is $57 million, although it is unclear whether that figure is final.
“I do not yet have confidence that we have a full and accurate picture of the project’s costs, and this has raised fundamental questions about the quality of the financial controls and investment oversight within MBIE,” he said. “An independent financial review by KPMG is underway to provide that full information.”
Rather than come clean when it was apparent the project was failing, MBIE misled the select committee and used creative accounting in an attempt to prevent Immigration Minister Erica Stanford obtaining the full picture.
‘The game’s up’
Former Solicitor-General Michael Heron KC is heading an inquiry into MBIE’s conduct but Blakeley said it was already clear that his organisation’s credibility had been damaged.
“I deeply regret the position that we find ourselves in, and I recognise that we have a mountain to climb to rebuild the trust and confidence of this committee and of Parliament and the public,” he said.
“As chief executive, I take responsibility for the failures and I’m taking accountability by making the changes needed to strengthen the organisation. I know I will be judged on the results.
“I’ve made it clear within MBIE that our evidence before all select committees must be accurate, complete, candid and that senior leaders are accountable the quality of every appearance.”
The project had two elements – BCU, a core biometric database, and IPE, or in-person enrolment, a portable system for gathering biometric data in the field.
“The assets are now considered unusable,” said Blakeley, whose offer to resign in the wake of the scandal was rejected by Public Service Commissioner Sir Brian Roche.
Asked by National MP Grant McCallum when MBIE realised “the game’s up… we’ve got to fess up”, Blakeley said it was in late 2025, when Suzanne Stew became acting CEO and looked at the project with fresh eyes.
Blakeley, a career public servant who took over from Stew in January and has been at MBIE since July 2023, conceded the plug should have been pulled much earlier.
He said a stocktake of other MBIE projects conducted in July found nine were rated red, requiring remedial action, and six were amber, flagging possible issues.
Blakeley said MBIE would publish quarterly updates on the projects to avoid any more cover ups.
In addition, he said steps were being taken to encourage staff to speak up if they saw issues at MBIE, including providing easier access to an “integrity hotline”.
Part of Heron’s brief is to examine claims that whistleblowers were sidelined or punished when they raised concerns about the BCU project.
The Public Service Commission has not set a date for completion of his inquiry.
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