Private prison operator Serco says it has faced difficulties since it opened last year but is now on track to meet performance targets.
Serco operates Mount Eden Prison which met only half its performance targets in its first nine months of operation, while three inmates were wrongly released and one escaped.
Despite the challenges, Serco director Steve Hall, said the prison is now meeting all but one of its 37 targets.
He said they are at a level where they are now reducing assault rates and drug availability in Mount Eden prison.
He says the possibility of free gang tattoo removal is being explored, with the hope it will prevent reoffending.
In March, the Government announced Serco would run a new $840 million prison with 960 beds being built in Wiri, south of Auckland.