Big Story 10

Geo Group says Bureau of Prisons rescinds contract renewal

(Reuters) - Private prison operator Geo Group Inc said the Federal Bureau of Prisons (BOP) rescinded a previously granted extension to operate a facility after renewing the contract.

The company said earlier on Friday the BOP had renewed its contract for the D. Ray James Correctional Facility in Folkston, Georgia through Sept. 30, 2018. The contract, which is effective through Sept. 30, 2020, is up for renewal every two or three years.

The U.S. Justice Department announced plans on Thursday to phase out its use of privately operated prisons, calling them less safe and a poor substitute for government-run facilities.

The department directed the BOP to gradually phase out private prison operators by letting contracts expire or by scaling them back to a level consistent with recent declines in the U.S. prison population.

GEO said on Friday it expects to get a new contract modification to operate the facility under new terms to be negotiated.

Shares of Geo and rival Corrections Corp of America lost more than a third of their market value on Thursday following the Justice department’s announcement.

Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sriraj Kalluvila