Overseas prisons run by the company that has been chosen to manage Mt Eden Auckland Central Remand Prison have been linked to violence and overcrowding, the Green Party says.

Serco, a British company with operations in Europe, the Middle East, Asia-Pacific and North America, was today named as the winner of a contract to manage the Auckland prison.

The prison is the first to be privatised since the Government passed the Corrections Amendment Act late last year, allowing private sector organisations to tender for contracts to manage prisons.

Ms Collins said Serco was selected over two other overseas companies, G4S and Geo. There were no bids from New Zealand companies.

She said the Corrections Department felt Serco would provide the best opportunity to make save money but also to give effective rehabilitation for prisoners.

"There's a very innovative contract, they've looked at Serco's operations overseas, and they're very happy with it. It's also going to be substantially cheaper than what Corrections can actually provide."

However, Green Party MP David Clendon said international media reports had linked Serco-run detention centres with violence, lack of adequate health care and overcrowding.

"Do we really want Serco running our prisons? Just last month there was a violent brawl at one of their Australian detention centres which has been reported as being linked to overcrowding."

Serco operates six adult prisons and two youth offender centres in the United Kingdom and Australia and 22 immigration detention facilities in Australia.

They include Sydney's Villawood detention centre, where last month 10 detainees sewed their lips shut after an asylum seeker committed suicide.

Mr Clendon said research from New South Wales suggested the focus on profit in privately run prisons meant prisoner safety was compromised.

"The international evidence shows that the Government needs to seriously reconsider its policy of getting private corporations to run our prisons," he said.

"Private prisons have to make a profit, which means either cut backs on staffing levels and rehabilitation, or charging more per prisoner, as we saw with the Auckland remand prison last time it was privately run."

New Zealand Public Service Association (NZPSA) national secretary Richard Wagstaff said that while the union strongly opposed privately run prisons, it would work to build a constructive relationship with the new employer.

"That will involve guarding against any reduction in the conditions and health and safety provisions of our prison guard members. Where possible we will aim to enhance these."

Mr Wagstaff said studies had show that when savings were made from privately run prisons it was because the private operators were paying staff poorer wages.

"We will be doing everything possible to ensure this does not happen. That would be a very bad outcome for the prison system and the wider community as well as for our members," he said.

Ms Collins said Serco had a number ideas for saving money, including new technology and changes to staff rostering.

The prison would operate within the current Corrections framework, and all prisoners would remain the responsibility of the Department of Corrections, she said.

Serco would have to comply with all relevant New Zealand legislation and international obligations.

A six-year contract with Serco was to be signed by January 31, and the site fully handed over by August 2, Ms Collins said.