A boost in the number of prison beds provided by the new federal intelligence law could be a major growth engine for U.S. private prison companies, said analysts quoted by Reuters. About 200 prisons and facilities are operated for the federal and state governments by companies such as Corrections America, Geo Group Inc., Cornell Cos. Inc., and Avalon Correctional Services Inc. “If we really do catch more aliens and if we really do lock them up, then we really do have an important source of growth for the private prison industry,” said Andrew May, an analyst with Jefferies and Co.
The law calls for expanded border controls, which could sharply boost prisoner numbers. It also requires the addition of at least 40,000 beds for immigration detention centers between 2006 and 2010, at a rate of at least 8,000 beds a year. “With a lack of budgetary dollars available currently for new prison construction, we believe that a material portion of these new beds will be provided by the private prison sector,” Avondale Partners Vice President Patrick Swindle said.