Calabrese referred to an instance at the McPherson women's prison where one inmate's medical care had cost Wackenhut between $300,000 and $500,000.
"The financial burdens have just been too much," he said.
The change comes at the end of a 90-day probation period during which
Wackenhut was ordered by the state to make drastic improvements at the two prisons.
"We wanted them to tighten up a little bit," said Correction Department spokeswoman Dina Tyler. "We wanted inmates to be working and we wanted the facilities to be cleaner."
Tyler said Wackenhut had made improvements over the 90 days and that it was now time to review the progress.
The Grimes unit houses about 600 male inmates. McPherson is Arkansas' only all-female facility and holds 685 inmates.
Wackenhut won the contracts in February 1996 when Arkansas decided to
experiment with private prison operations.
Last year, state prison officials began questioning how the prisons were managed. Their concerns grew when a number of complaints about clothing and sanitation from inmates proved credible after surprise visits.
Barbara Townsend of El Dorado, who has a son incarcerated at Grimes, son, attended Thursday meeting and was hopeful the state would take over the unit. She said her son, convicted of burglary, had been threatened after not joining an inmate gang.
"He had to fight to keep these guys away from him," Townsend said. "And his grievances with Wackenhut were ignored."
Townsend said she called the DOC and within days, her son was moved to a new cell. In another instance, she says her son was refused treatment for asthma. Another call to the DOC solved that problem, Townsend said.
She, too, complained, there was little for inmates to do.
"If you take a lot of young men and give them nothing to do, it's like a time bomb," she said.
Wackenhut spokeswoman Margaret Pearson said she has been in contact with the Grimes' warden regarding Townsend's son and that prison officials have routinely gone out of their way to help. Pearson said the warden speaks with Townsend at least once a week and has relocated her son to a special job assignment.