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Watchdog to investigate after $33m immigration tech project collapses, delivering nothing

Tuesday, 16 June 2026

INZ’s biometrics upgrade project cost $33m but delivered nothing.
INZ’s biometrics upgrade project cost $33m but delivered nothing.

Immigration officials stand accused by their own minister of misleading her and her predecessors for seven years, engaging in creative accounting to dodge scrutiny and removing people from a $33 million IT project when they raised questions.

And ultimately, they achieved nothing. The entire project is now being written off with nothing to show for it.

Immigration Minister Erica Stanford is 'furious' and says she has lost confidence in her officials.

An independent review of Immigration New Zealand's (INZ) Biometric Capability Update (BCU) project, which Stanford called 'a doomed project from the start', has sparked multiple investigations, including one by the Public Service Commission into the integrity concerns.

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'The report is very clear that ministers were not given full information, that in cases we were misled, that people were removed from the project when they asked questions about its viability, and that whole-of-life costs were not put to ministers for proper approval,' Stanford told a select committee on Tuesday.

The project, meant to modernise and future-proof INZ's identity management system, began in November 2018 with an initial $19m budget to upgrade biometric technology supplied by tech company NEC.

But officials later shifted the project to replace other elements of the immigration system without detailed business requirements, due diligence or market testing, the review found.

'Project delivery quickly encountered delays, missed milestones and increasing evidence that the NEC solution could not meet INZ's requirements,' it said.

Governance was slow to take shape and frequently sidestepped, with key decisions made without documentation or proper scrutiny, the review found.

The whole-of-life cost climbed to $35m, despite ministers signing off on the increases only twice across the life of the project.

Do you know more? Email amelia.wade@thepost.co.nz

By 2025, the go-live date had been pushed out repeatedly because of mounting defects and security concerns. In November it was deemed irrecoverable, having delivered no measurable benefits at a sunk cost of $31.2m.

'Those costs, over the next few years, will have to be met by future users of the immigration system,' Stanford said.

'It is totally unacceptable to me as a minister that, after seven years, MBIE somehow spent tens of millions of dollars, and not only do we have nothing to show for it, but we are now having to maintain the existing ageing infrastructure while a new solution is sought.'

MBIE chief executive Nic Blakeley, who took over the department in January, also appeared before the committee. He said he was 'extremely disappointed that it's taken seven years and $33m and we have not delivered'.

'That's unacceptable,' he said. 'I take accountability for that, on behalf of the department, over a long period of time.'

He apologised to ministers and to New Zealanders.

The project began to unravel in March 2024, when officials sought to push the cost to $40m, which required Cabinet approval.

Advice to the minister at the time said the project was 'well progressed', with an approach that was 'sound and robust', citing a positive quality assurance review in September 2023.

Immigration Minister Erica Stanford is ‘furious’ about the behaviour of officials.
Immigration Minister Erica Stanford is ‘furious’ about the behaviour of officials.

Stanford says she was also not told that her predecessor, Andrew Little, had already declined the same request twice in 2023.

Stanford said she refused the increase and requested the 2023 review, which in fact said: 'given the project's poor delivery history and its inability to meet agreed milestones, we have doubts as to whether the project will in fact deliver at all and we question its continuation'.

'I was, as I'm sure you can appreciate, furious at being provided with advice that was diametrically opposed to the truth on such a critical project,' Stanford said.

She said she confronted the department's leadership and MBIE's chief executive at the time, Carolyn Tremain, formally apologised for the advice.

'I remember looking Carolyn Tremain in the eye, and I said, do not underestimate how upset I am about this and we're going to have to build back some confidence,' she said.

She said she had urged officials to disclose everything, specifically using the phrase 'bring out your dead' so problems could be resolved.

'That didn't happen.'

Stanford said earlier ministers 'were not given the full picture', with costs increasing, timelines blowing out and scope changing 'without any of the oversight'.

The review found some staff had described the department's financial management as 'creative accounting', driven by efforts to avoid exceeding the Cabinet funding threshold.

Stanford said that was 'almost as bad as it gets'.

She said she was not confident the conduct was isolated to the BCU project, and has asked for a review of the department's other major IT programme, Our Future Services.

Stanford also plans to raise with her cabinet colleagues whether the use of creative accounting to avoid scrutiny was more widespread across the public sector.

Public Service Commissioner Sir Brian Roche has agreed to appoint an independent investigator to inquire into the matters and recommend any action required.

'The integrity matters highlighted by the report are serious and concerning,' Roche said, adding they went to 'the core of the behaviours and ethics required of public servants, and the ability of ministers to have confidence in the advice they receive from officials'.

At Stanford's request, he will also review the wider Our Future Services programme.

Blakeley said MBIE would carry out employment investigations depending on the commission's findings, and was conducting a stocktake of all its major technology projects and strengthening its processes. He acknowledged the minister was not shown the review for about two and a half months after the ministry received it. 'That's on us,' he said, calling the delay the wrong call.

The review traces the failure to a flawed business case and a 2020 decision to abandon the planned upgrade in favour of replacing the system with a customised version of NEC's 'off-the-shelf' product, a choice both Stanford and Blakeley described as the project's critical mistake. More than 170 change requests followed, and the relationship between INZ and NEC was strained throughout.

Blakeley said the existing identity management system continued to operate as normal and New Zealand's border remained safe. Officials are now working on a replacement and will report back to ministers within months.

NEC has been approached for comment.

THE BCU TIMELINE