Corrections Minister Anne Tolley says private prison operator Serco has made decent progress in its first year, despite the company failing to meet half of its performance targets.



A report released yesterday on Serco's performance revealed three inmates were wrongly released, one escaped and three were wrongfully detained.



Of 37 targets Serco was to meet in the nine months to April half weren't met.



Tolley said she expected the company to continue to make progress.



As a private company, Serco could be fined or have payment withheld due to performance issues, she said.



"This is a very demanding contract, and Corrections are working closely with Serco to get it right."



Corrections' Deputy Chief Executive Christine Stevenson said Serco's performance at Mt Eden Correctional Facility (MECF) was steady or strengthening.



"There are a number of innovations Serco has put in place at MECF that the Department is looking at closely to assess the potential for expansion into publicly managed prisons."



Corrections said Serco had accepted responsibility for one wrongful release. A final decision on whether they would be fined on a second wrongful release had not yet been made.



Corrections are to issue a performance notice for a third wrongful release that occurred in March.



During its first quarter running the prison Serco was fined $150,000 after prisoner Aaron Forden escaped in February. Forden, dubbed "Houdini" escaped along with another inmate who was caught almost immediately.



The firm was also fined $25,000 for releasing one inmate early and $50,000 for failing to file progress reports.



The prison was applauded for clamping down on drugs, returning one of the lowest rates of positive drugs tests nationwide and for eliminating incidents of self harm.



In March the Government announced Serco would also run a new 960-bed jail being built in South Auckland.