The NSW government is not renewing its contract with the operator of Junee Correctional Centre.
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The prison's operator GEO Group Australia issued a statement on November 1 confirming the prison would revert to state hands on March 31, 2025.
GEO has operated the facility since its opening in 1993, and is Junee's biggest employer.
The Junee jail has been under scrutiny in recent years for underpaying staff, "breeding crime", preventable prisoner deaths, and allowing unacceptable staff behaviour.
GEO lost the contract to operate Parklea Prison in 2018, after a series of embarrassing incidents including a prisoner stealing plans for a new maximum security wing.
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The Department of Communities and Justice (DCJ) confirmed the correctional facility would be taken back into state hands, but did not offer further comment.
A spokesperson said more information will be available in the coming weeks.
State member for Cootamundra Steph Cooke said the "city-centric Labor Government" had made the decision without considering the impact on the community.
"The community deserves to hear directly from the Minister, not only about his plan for the future of the centre, but the reasons behind the decision," she said.
"Some staff have been with the centre since it opened back in 1993; they and their colleagues deserve to know what the future looks like for them, and what implications the minister's plans may have.
"He needs to be clear about his decision; explain any impact it may have on the broader community; and outline what the government is going to do to address any social and economic ramifications."
A spokesperson for corrections minister Anoulack Chanthivong said they had offered to brief Ms Cooke on the transfer, but she was not available.
Junee mayor Bob Callow said he was aware of the change, but had not been briefed by GEO.
"Junee Shire will work as close as possible with both agencies to ensure a seamless transition, with a minimal impact on Junee in mind," he said.
"GEO have been in the shire for 30 years now, and have always been valued as an important business partner."
In a statement, GEO said staff and management were disappointed by the decision to not to undertake a new tender process.
"Our staff have worked tirelessly to forge strong and enduring partnerships with local stakeholders to deliver a safe and secure facility, while promoting better outcomes for the people entrusted in GEO's care," they said.
"Even though staff are disappointed by this decision, and given the uncertainties and challenges brought about by transitioning to a new employer, GEO and its staff will work with the NSW Government to ensure a smooth handover."
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