HARTSVILLE, Tenn. — Corrections Corporation of America announced the suspension of work on the new $143 million correctional facility in Trousdale County that would have created more than 2,000 new beds.
CCA halted construction of the 2,040-bed Trousdale project, which was scheduled for completion during the fourth quarter of 2009, amid uncertainty over the demand for additional bed space, according to the company.
“We have temporarily suspended the construction of this facility until we have greater clarity around the timing of future bed absorption by our customers,” according to the company’s 2008 fourth-quarter earnings statement.
CCA, which added 8,275 beds during 2008 (1,808 beds in the fourth quarter), including the 2,232-bed correctional center in Adams County, Miss., initiated the Trousdale project in May 2008 without a management contract for the new beds.
The total occupancy rate across CCA’s entire inventory of beds decreased more than 5 percent to approximately 93 percent during 2008 and the company is slowing the pace of investment in new beds until future demand becomes clearer.
“We remain cautious about the economic outlook through 2009, given the uncertainty and poor visibility around government budgets and spending associated with the economic downturn,” the earnings report states.
CCA previously announced projected 2009 capital expenditures of approximately $78 million for prison construction and expansion projects.
Annual revenues for the private prison operator increased almost 10 percent in 2008 to approximately $1.6 billion. A 4.5 percent increase in the total inmate population and a 5.5 percent increase in per diem rates contributed to the increase in revenues for 2008, according to the company.
The growth in management revenues, which was softened by declines in inmates from Minnesota, New Mexico, Washington and Wyoming, is primarily due to inmate contracts with California, Idaho and U.S. Immigration and Customs Enforcement, according to the company.
In addition, operating margin rates increased 1 percent to more than 30 percent in 2008 on the back of an almost 8 percent increase in per-man-day operating margins.
CCAs fourth-quarter earnings for 2008 increased 16 percent over 2007 earnings to more than $40 million. Fourth-quarter revenues increased almost 9 percent to more than $414 million from almost $381 million for the same period in 2007, according to the company.