Serco locks in £1.5bn deal to operate mammoth prison in New South Wales

Oliver Gill
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The New Grafton Correctional Centre is expected to be operational by 2020 (Source: Serco)

Criminal tagging firm Serco has won a AU$2.6bn (£1.5bn) contract to operate what will be Australia's largest ever prison, the FTSE 250 group announced this morning.

Serco is part of the NorthernPathways consortium, a public-private partnership, that will design, build and operate the the New Grafton Correctional Centre (NGCC) in New South Wales.

The prison will create 550 permanent Serco jobs once it is built in 2020. It will house a 1,000-bed maximum security male facility, a 300-bed maximum female unit and a 400-bed minimum security division.

Inking the deal is a boost for the Hook-based firm that has been restructuring following a raft of profit warnings. Shares in the firm rose nearly four per cent in early trading.

Read more: Serco shares jump 16 per cent as it swings to profit

"Heart of our custodial operations"

Serco chief executive Rupert Soames said securing the NGCC contract "clearly marks a further important expansion of our international justice business".

He added: "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."

Read more: Here's why Serco shares have tanked despite meeting forecasts

Earlier this year, Serco shares plummeted by nearly a fifth after Soames said its recovery "was always going to be long and winding, with many potholes and boulders, but we are making good progress".

In 2014, Serco, which provides a broad range of support services globally, was hit by a scandal in the UK where it had overcharged the government for tagging criminals. In the same year it was criticised by refugee bodies for allegedly using detainees at one of its immigration centres for cheap labour.

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