CORRECTED (OFFICIAL)-G4S wins electronic tagging deal in Scotland

Fri Sep 21, 2012 9:57am EDT

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(In second paragraph corrects contract value to 13 mln stg from 20 mln stg after clarification from G4S)

By Neil Maidment

LONDON, Sept 21 (Reuters) - Embattled security firm G4S has won a contract to manage the electronic tagging of offenders in Scotland, its first big British deal since its high-profile failure to provide enough security staff at the London Olympic Games.

G4S has signed a 5-year deal with the Scottish government worth 13 million pounds ($21 million) and will begin monitoring offenders from April 2013 when it takes over from British outsourcing rival Serco.

The contract win will be a welcome boost to G4S, which has been under fire since admitting just two weeks before the London Games began that it could not provide a promised 10,400 venue guards, embarrassing the government - a key customer - and forcing British troops to fill the shortfall.

A report by British lawmakers published on Friday called for G4S to waive its management fee over the fiasco and compensate Games staff neglected in its chaotic recruitment drive, applying pressure that could see the group's estimate of a 50 million pound loss on the contract grow wider.

G4S, which runs services from prisons, immigration and border control to cash transportation in over 125 countries, already provides electronic tagging in England, along with Serco, but must bid to win a new contract set to be awarded in the summer next year.

The group is also bidding for prison management contracts due to be announced later in 2012 and police work, although its chairman John Connolly has said he fears the Olympic debacle could harm its chances of success.

G4S's Scottish tagging contract will see GPS technology used to continuously track offenders' whereabouts as opposed to 'radio frequency' technology which had been used previously to establish when an offender had broken a curfew.

Last year the company hit British headlines when its guards tagged a man's false leg, allowing him to remove it and break a court-imposed curfew.

G4S also announced this week it had acquired security groups Vanguarda and Interativa in Brazil - the fourth largest security market in the world and a key growth area for the firm.

Shares in the FTSE 100 company were flat at 0707 GMT in London, valuing the business at around 3.7 billion pounds.

($1 = 0.6173 British pounds) (Reporting by Neil Maidment; Editing by Mark Potter)

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