Mitie ramps up competition against rivals G4S, Serco

LONDON, Feb 11 (Reuters) - British outsourcer Mitie said it had won a 180 million pound ($295 million) governmentdeal to run two UK immigration centres, ramping up its custodialcare activities against larger, embattled rivals G4S andSerco.

Mitie said on Tuesday the contract would see it become thelargest single private sector provider of immigration detentionservices to Britain's Home Office (interior ministry), less thanthree years after it entered the market.

Rivals G4S and Serco, who have long enjoyed high valuecontracts with the British government, have absorbed heavycriticism recently after an audit showed both firms had chargedthe British taxpayer for tagging criminals who were not beingmonitored.

Mitie described its win as "strategically very significant"while RBC Capital Markets analyst Andrew Brooke noted suchcontracts would historically have ended up with the industry'sbiggest players.

"Politically it is not easy for the government to givecontracts to G4S and Serco given the reputational issues,"Brooke said. "It's a good win in a new area so it's quitesignificant for them."

Mitie, which runs services from maintenance and cleaning tobaggage screening at London's Heathrow airport, said it will beresponsible for the custody and welfare of more than 900immigration detainees at two centres near Heathrow in London.

The centres, Colnbrook and Harmondsworth, were previouslymanaged by Serco and the GEO Group respectively. Serco won thecontract to design, build and operate Colnbrook in 2002.

"This is strategically a very significant contract forMitie, as we expand our presence in the market for custodialservice," Mitie chief executive Ruby McGregor-Smith said.

"We have always said we would look to continue our work withthe Home Office and really look to grow and invest in it,"McGregor-Smith told Reuters in a telephone interview.

A spokesperson for the Home Office was not immediatelyavailable for comment.

Mitie

Serco