* Private sector in running for only four prisons
* Three jails to remain in public sector
* G4S to lose HMP Wolds contract from July
* G4S shares down 4.9 pct
By Neil Maidment
LONDON, Nov 8 (Reuters) – Security group G4S missed
out on contracts to run British prisons on Thursday, paying the
price for embarrassing the government by failing to provide
enough guards at the London Olympics.
The Ministry of Justice (MoJ) was widely expected to hand
the majority of seven contracts to manage state-run prisons to
the private sector, but instead said it would keep three under
public sector management after the bids failed to impress.
G4S missed the cut on deals to run six prisons, including
HMP Wolds, a prison which the company has managed since 1992 but
which will now return to the public sector in July 2013.
French caterer Sodexo, British outsourcing firm
Serco and a venture between MTC and Amey are in
the running for the remaining contracts to run HMP
Northumberland and three jails in South Yorkshire.
Coldingley, Durham and Onley prisons will remain under
public sector management.
G4S, which runs six prisons in Britain, expressed
disappointment at the announcement. Its shares were down by 4.9
percent at 1300 GMT.
“We look forward to discussing the contract award decision
with the MoJ within the next few days to determine why we were
unsuccessful,” the firm said in a statement.
Investors have seen the contracts as a test of the state’s
appetite to continue working with G4S, whose failure to provide
enough security staff at Olympic venues forced an embarrassed
government to draft in soldiers to cover the shortfall.
Earlier this week Chief Executive Nick Buckles said he hoped
G4S’s track record in winning government work – which represents
some 13 percent of group revenue – would stand it in good stead
for prison work.
“To us, it would suggest that the (G4S) business has
incurred some reputational damage with the UK Government
following the London Olympic contract failure,” Espirito Santo
analyst David Brockon said.
Justice Secretary Chris Grayling said other prisons could be
put out to private management on a case-by-case basis.
