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Custodial estates delivered under long government contracts, a legitimate social-infrastructure asset class. A private consortium builds, finances and often operates a secure facility, and the authority pays a contracted, indexed availability charge per place for ~25-30 years, with no demand risk. Pick a real example below and follow it through the facility, the contract model and a working returns model.
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Drag the sliders to see what earns the money, the number of places, the contracted fee per available place, and how much of the estate is available, not how many prisoners are held.
A custodial facility is built, and often operated, under a long government contract. In the dominant availability model, the authority pays a fixed, indexed charge per available place over ~25-30 years, covering capital, financing, lifecycle, facilities management and (where contracted) custodial operations. Revenue does not depend on occupancy or prisoner numbers, it is paid per place kept secure and fit for use, reduced by deductions for unavailability or performance failures. The income is long, government-backed, inflation-linked and demand-risk-free. A contrasting per-diem model (common in US private corrections) instead pays a rate per prisoner held, often with an occupancy guarantee, so it carries more occupancy/demand risk. Across both, custodial operations are a heavy cost: where the operator runs the prison, staffing dominates, so the margin is lower than a pure availability hospital or school. The watch items are performance deductions, contract renewal and the political/ESG sensitivity of the asset class.
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See also the interactive Prison PPP simulator, watch available places earn the charge while unavailability triggers deductions, and the Cash-flow & DCF model.