Wackenhut Corrections Signs Contract To Manage 3,024-Bed Prison in South Africa
PALM BEACH GARDENS, Fla., Aug. 3 /PRNewswire/ -- Wackenhut Corrections Corporation (NYSE: WHC) (WCC) announced today that its South African joint venture, South African Custodial Services (SACS), signed a conditional contract with the Government of South Africa for the development and 25-year operation of a 3,024-bed maximum security prison at Louis Trichardt, in South Africa's Northern Province, subject to financial closure taking place within 14 days.
Dr. George C. Zoley, vice chairman and chief executive officer of WCC, said, "This private-public partnership with the South African Government is an important step forward for our company in further expanding WCC's leadership in the international correctional services market. We look forward to our continuing association with the South African government and are fully committed to supporting its goals and objectives."
The construction at the site was started after the execution of the Project Development Agreement (P.D.A.) in July 1999. The P.D.A. permitted work on the project to begin while the final contract negotiations were being completed. It is being constructed by SACS's general contractor, CGM, a consortium of three South African building contractors, Concor Construction Pty. Ltd., Group 5 Construction Pty. Ltd., and Makhosi Holdings Pty. Ltd.
The cost of construction of the Louis Trichardt prison is expected to be US $44.6 million, and is being financed through a combination of operator equity and debt from a South African banking consortium. SACS's joint lead financial arrangers are African Merchant Bank and Rand Merchant Bank.
Wackenhut Corrections' partner in South African Custodial Services (SACS) is Kensani Consortium Pty. Ltd., a black South African women empowerment company. Kensani will also participate as a sub-contractor in the delivery of operations services related to facility maintenance and inmate programs.
Wackenhut Corrections is the industry leader in the international corrections market, with awards or contracts for 58% of the private prison beds located outside the United States. The company now has contracts/awards to manage 56 facilities in North America, Europe, Africa, Australia and New Zealand with approximately 40,732 beds, and additional contracts for mental health services, correctional health care, prisoner transportation, and electronic monitoring of home detainees.
Wackenhut Corrections is a part of The Wackenhut Corporation (NYSE: WAK WAKB) and offers government agencies a turnkey approach to developing new correctional and mental health institutions that includes design, construction, financing and operations. The company provides a broad spectrum of correctional services, which include adult corrections, juvenile facilities, community corrections, and special purpose institutions.
This press release contains forward-looking statements regarding future events and future performance of the company that involve risks and uncertainties that could materially affect actual results. Investors should refer to documents that the company files from time to time with the Securities and Exchange Commission for a description of certain factors that could cause actual results to vary from current expectations and forward- looking statements contained in this press release. Such filings include, without limitation, the Company's Form 10K, Form 10Q and Form 8K reports.
means margins down. Who cares how many more beds they have? If you can't increase earnings on higher revenues does it really matter how much more business you have? Sure it's nice to be able to employ more people and put food on the table for them, but as a shareholder I want to see profit - even if getting higher profit means scaling back the business and throwing away whatever is not able to bring home the bacon.
If we get more business and can't turn a profit on it, then why take the business to begin with? It's just more risk of not being able to turn profit on a low margin business.