By the Financial Times ( Financial Times) -- U.S. states are poised to privatize scores of prisons as they try to close budget deficits, creating significant new markets for the industry's biggest private contractors.
In Florida alone, 29 state prisons are due to be privatised -- the largest prison privatization program in U.S. history, says Tobey Sommer, an analyst covering the private prison market at SunTrust Robinson Humphrey, an investment bank based in Atlanta.
Arizona recently finished public hearings on a plan to add thousands of privately operated prison beds. And in Ohio last month two companies won contracts worth $200 million to run five of the state's 32 correction facilities. Other states are expected to follow as private contractors pitch themselves as a solution to cash-strapped states' fiscal woes.
The Ohio and Florida plans have a new twist that Sommer believes could be copied by other states hoping to streamline their budgets. Instead of outsourcing only newly built prisons, they plan to outsource existing beds as well. "This may be a blueprint to close other states' budget gaps" Sommer said.The Florida Department of Corrections has until the end of the year to complete the process and private operators must guarantee cost cuts of 7 per cent or more. Proponents say it will save the state $22 million a year. "Probably 5% of prisons in
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