In Brazil, New Era of Private Prisons as Feds Auction Contracts to Build Them

October 26, 2023

On October 6 in Rio Grande do Sul, the government of Brazil held the first auction for a public-private partnership where the winning company would not just manage a federal prison, but build it from scratch. Previously, the government would build a new prison and then auction off its operations to different vendors. Now, the government will pay a single company to build a prison, manage all of its operations, and maintain it for the next 30 years.

The winner would receive $20 million USD to support construction of a 1,200-bed prison and manage it on a 30-year contract. There was only one bidder, Soluções Serviços Terceirizados, which won the contract with an offer to charge the government $46 per incarcerated person per day. 

Soluções Serviços Terceirizados contracts with several Brazilian states as a food vendor, and is known for cutting costs. In 2021, a couple of years after the company was reported for warehouses filled with rats, Rio de Janeiro suspended its contract for “inadequate hygienic and sanitary conditions, including flies circulating in the area.” 

Until now, there has been no financial motivation for entrepreneurs of suffering to actually build a prison.

On October 22, Soluções Serviços Terceirizados was formally disqualified from its federal prison bid. In the wake of the auction it had failed to produce the requisite audit documents supporting the feasibility of its proposal; the company also has a history of financial irregularities, and entering into contracts it’s unable to pay. Though the timeline is not certain, since there were no runner-ups in the Rio Grande do Sul auction the government will hold another one. More auctions to build more prisons in other states are to follow.

Outsourcing prison operations like health care, food and maintenance to private contractors is an established practice in Brazil, and privately run prisons—where the government pays the contractor to manage the entire facility—have been permitted since Minas Gerais became the first state with such a public-private partnership in 2013.

Prisons are expensive, and the government saves huge sums by delegating operations to private companies, which find ways to do the job far more cheaply. But there has previously been no financial motivation for entrepreneurs of suffering to actually build a prison, since until it’s constructed a prison contains no people off of whom to profit.

In April, Brazil Vice President Geraldo Alckmin signed a decree that deemed penitentiaries to be “investment projects considered as priorities in the area of infrastructure or economic production intensive in research, development and innovation.” Such investment projects are eligible for government incentives like tax breaks, long contracts and funding from the Brazilian Development Bank.

The privatization of Brazil’s carceral system is gaining momentum.

The incentives themselves are not impressive, which is why the Rio Grande do Sul action had just one bidder. But the issue is open for lobbying, despite scores of civil society organizations denouncing this practice, and the privatization of Brazil’s carceral system is gaining momentum.

President Lula was elected to his third term on promises to address the social ills exacerbated during Bolsonaro’s tenure, but he’s showed a great deal of enthusiasm about the carceral state. He’s channelling more public resources toward its privatization than Bolsonaro was willing to do. Lula’s flawed 2006 drug law signed in his first term set in motion the country’s mass incarceration crisis. Brazil has the third-largest prison population in the world, with 835,000 people currently incarcerated. About one in four are held on minor drug convictions.

In July, a man incarcerated in a privately run facility in Mina Gerais died after guards refused to take him to the infirmary, and instead brought him a wheelchair. In 2019, security cost-cutting in four privately run facilities allowed 55 prisoners to be killed in a span of two days. The National Mechanism for Preventing and Combating Torture of the Ministry of Justice has found that understaffing is a life-threatening crisis in privately run prisons.



Photograph via Mídia NINJA/Flickr/Creative Commons 2.0

Felipe Neis Araujo

Felipe is a Brazilian anthropologist. He's a criminology lecturer at the University of Manchester, where he researches drug policy, state violence, structural racism and reparations for historical inequalities. He lives in London.

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