Serco Group signs £1.5bn contract to deliver new correctional centre in Australia

Serco Group plc, the outsourcing company based in Hampshire, has signed a £1.5bn contract and completed financial agreements to operate the New Grafton Correctional Centre (NGCC) in New South Wales, Australia.

Serco is part of the NorthernPathways consortium which will design, build and operate NGCC in a Public Private Partnership for the NSW Government (the State).

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

The prison will 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 is expected to commence in 2020. The estimated total contract value to Serco over a 20-year term is approximately AUD2.6bn (equivalent to approximately £1.5bn, based upon the current exchange rate of 1 GBP = 1.68 AUD).

NGCC will consist of individual facilities holding three different categories of inmates. 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.

The contract draws on Serco’s experience of managing correctional facilities in the UK, New Zealand and elsewhere in Australia. It will be the first time that Serco has managed a correctional facility which includes women.

Rupert Soames, Serco Group chief executive, said: “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.

“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.”