Serco signs £1.5bn deal to run Aussie prison

International service company Serco Group announced on Tuesday that it had signed the contract and completed financial agreements to operate the New Grafton Correctional Centre in New South Wales, Australia.

The FTSE 250 firm had previously announced on 16 March that it was named ‘preferred bidder’ on the project.

Serco said it is part of the ‘NorthernPathways’ consortium which will design, build and operate the NGCC in a public-private partnership for the NSW state government.

The consortium will operate the facility under a licence arrangement from the state, which retains ownership of the facility and all its equipment.

Serco said the prison would inject more than AUD560m into the local economy with 1,100 jobs created during construction phase and about 550 permanent jobs with Serco once operational.

When completed, NGCC will be the largest correctional facility in Australia.

Serco's contract for operation was expected to commence in 2020, with the estimated total contract value to Serco over a 20-year term is approximately AUD2.6bn (£1.5bn).

NGCC will consist of individual facilities holding three different categories of inmates “safely, securely and entirely separately”, the Serco board explained in its statement.

It will include a 1,000-bed male maximum security facility, a 300-bed female maximum security facility, and a 400-bed male minimum security facility.

Both the centre itself, and the programmes that inmates will participate in, were said to be designed with the goal of reducing reoffending and making communities safer.

The contract drew on Serco's experience of managing correctional facilities in the UK, New Zealand and elsewhere in Australia, the board said.

It would, however, be the first time that Serco has managed a correctional facility which includes women.

NGCC had been designed to incorporate a trauma-informed approach which supported the “unique concerns” of females including a specialist centre of smaller-scale cottage accommodation.

“The contract award for NGCC clearly marks a further important expansion of our international justice business, and by total contract value it also represents Serco's largest ever contract,” said chief executive Rupert Soames.

“Serco already operates Australia's current largest correctional facility, Acacia Prison, and at the heart of our custodial operations is the commitment to making a positive difference by safeguarding society and reducing reoffending.

“This contract demonstrates our strength in delivering best practice particularly in regard to rehabilitation, reintegration, education and training programmes, as well as innovation, world-class systems, recruitment and partnering.”