G4S and Sodexo Justice Services, the private sector prison service providers, are increasingly looking to expand into Australia. Both the companies are competing for a £225m (€285.2m, $325.42m) contract to manage the Western Australian Women's Remand and Reintegration facility.
While five companies had bid for the contract to manage the 254 women prisoners near Perth, Australia, the FTSE 250 listed G4S and the French-owned Sodexo subsidiary were the only two to be shortlisted. The contract will be valid for a five-year period with the potential to extend the term by two additional five-year periods. This means the winner of the contract, which will be known in a few days, will have an opportunity to earn £15m a year.
G4S already manages two prisons in Australia. However, for Sodexo which doesn't manage any prisons in the country, winning the contract would help debut its Australian prison services business.
The move comes at a time when the UK is witnessing a slowdown in the pace of prison privatisation. Companies in this space such as Serco, Sodexo and G4S are hence looking to expand into other geographies such as Australia, where the government has increased the pace of outsourcing prison management.
According to charity group Catholic Prison Ministry, currently just 8% of Australian prisons are being managed by private companies. The companies include GEO Group, Serco, G4S, and GSL Custodial Services. Their number is set to increase with regional states, which commission prisons, saying that they are ready for greater privatisation of the sector.
The move is spearheaded by the regional states with the aim of saving costs while there is a rise in the number of prisoners. For instance, according to 2011 data in Western Australia Auditor General's Report, the cost to manage Acacia prison in Wooroloo was A$182 (£93, € 117,$133) per day per prisoner by Serco. This was much lower than the A$270 per prisoner per day it cost in prisons managed by the government, according to the Financial Times.
Privatisation is also set to increase with the New South Wales government announcing in March 2016 that it would allow the private sector to compete with public companies to operate correctional facilities. The government had added that it would introduce reforms. David Elliott, corrections minister for the state had said: "I'm saying to the private sector and the public sector, let's see the best that you've got to offer. Prisons in New South Wales are thirsting for reform."