Prison Privatisation Report International

No. 64, September 2004

Published by the Public Services International Research Unit (PSIRU), University of Greenwich, London, England.
This publication is supported by a grant from the Foundation Open Society Institute.



Interest in private prison

Lithuania is interested in developing a prison under a public private partnership (PPP). The director general of the country’s prison department, Mr Rimudis Kugis, told participants at a PPP Roundtable discussion in London on 27 August 2004 that he hoped a pilot project for a private prison would be developed in the “relatively near future.” Mr Kugis was in the UK on a fact finding visit.

The Roundtable was organised by IFSL (International Financial Services London) as part of its programme to promote the UK financial services industry generally - and public private partnerships in particular - throughout the world. According to IFSL, in common with many new members of the European Union Lithuania is interested in using PPP as a way of financing its infrastructural needs. IFSL has, therefore, “been in contact with the relevant authorities for some time now to take this interest forward.”

Supreme Court appeal against private prison

An appeal is due to be filed in the supreme court against the government’s decision to change the law to allow a private prison to be commissioned (see PPRI # 63, 62, 60, 59, 56, 52, etc).

Human rights lawyers and scholars from the Ranat Gan Law School are hoping to have the government’s legislation enabling private prisons to be referred back to the Knesset and the contract bidding process postponed.

The appeal is based on procedural and constitutional grounds. It will be argued that the Knesset did not have the requisite information at their disposal in order to make a decision and that the government cannot privatise prison management. Another test will be whether the Shinuy Party’s expulsion of Mr Hemy Doron, a member of parliament who was prepared to vote against the enabling legislation, had any bearing on the process.

Three consortia have been short listed as preferred bidders for the 800 bed prison to financed, designed, built and run at Beer Sheva: Housing and Construction Holding Company (Shikun u’Binui) a subsidiary of Solel Boneh Building and Infrastructure, Dankner Investments and GEPSA of France; Yaacov Engel Construction Enterprises, Baran Group and Dominion Correctional Services of the US; and a consortium headed by Minrav Holdings that includes Cornell Companies Inc.

The tender was published in August 2004. If the bidding process fails the government is committed to paying compensation to the short listed bidders.

MTC non-compliance exposed

Management & Training Corporation (MTC) has been consistently in breach of its contract to operate the Central North Correctional Centre at Penetanguishene, Ontario (see PPRI # 61, 58, 49, 44, 38, 37, 35, 34 & 32).

A leaked internal MTC memo from the company’s deputy of operations, Mr Phil Clough, to the facility administrator, Mr Doug Thomson, and seen by PPRI reveals that “we are in a situation where on a regular basis we are not in compliance with the contract.”

A combination of government policies, poor planning, a failure to anticipate required tasks and an inability to recruit staff has “... tripled the staffing level and other unfunded tasks. This has resulted in huge overtime costs, a large dollar cost for police escorts and insufficient staff for significant searches.”

Other extracts from the draft memo include:

Mr Clough also notes that, for the medical unit, “this area has significantly more staff coverage than the contract calls for. The workload in this area is much higher than anticipated in the contract. Reductions in this area would result in significant difficulties meeting medical standards ... there have already been safety issues raised by nursing and other medical staff...”

However, the document does not review staffing levels throughout the whole prison: “ ... the resources from not covering night shift have been deployed elsewhere (records staff, which are not covered by this review.)”

While noting that “the contract staffing plan has not been changed since the centre opened ...” Mr Clough suggests a strategy to resolve these problems. This includes:

Mr Clough also suggests asking the ministry for several variances in the contract but notes that “the CCU has stated that they are not going to approve any variances until the present situation in relation to contract hours is identified. We are not in compliance at the present time. We have more staff than the contract calls for but their deployment has created gaps which the union and the CCU are identifying as a non-compliance issue. An edited version of this document to the CCU should resolve that issue.”

He also reveals that an “outside consultant” has been commissioned but that he is “not aware of the number of staff [the consultant] stated would be needed”. Mr Clough is “... working on a new shift configuration, which I believe will address the issues and be acceptable to the staff.”

The memo was made public by the Ontario Public Service Employees Union (OPSEU) which represents the province’s publicly employed correctional officers. In 2002 OPSEU recruited the majority of the CNCC’s correctional officers and later signed a collective agreement with the company. Barry Scanlon of OPSEU referred to the MTC facility as “the Titanic.”

The local member of parliament, Garfield Dunlop, a supporter of private prisons, told the Midland Free Press, 3 September 2004, that: “If they aren’t conforming to the guidelines of the contract, the ministry should make them conform. There are ministry people in the prison. I’m surprised they would let this happen.” A company spokesperson told the Toronto Star, 1 September 2004, that: “at no point in time was public safety ever compromised. Public safety and the safety of our staff is the number one priority at all times and that’s why we do internal reviews.”

Previously Mr Dunlop told the Midland Free Press that the MTC-run prison was saving provincial taxpayers about C$26 million a year compared to the Central East Correctional Centre, a publicly run identically designed ‘superjail’in Lindsay, Ontario. The government is carrying out a five year comparison of costs, regime provision and recidivism rates between the two. Neither Mr Dunlop’s claim nor the comparative running costs have been confirmed by the government.

However, the Midland Free Press, 10 September 2004, reported that the MTC-run prison has 180 staff while the Central East Correctional Centre has “about 320.” Prior to the leaking of the internal memo and the ensuing furore, on 23 August 2004 a spokesperson for MTC, Peter Mount, told the Midland Free Press that: “Our issue is not only money, but to perform within or to exceed contract standards, and that’s what we strive for. We may operate [at a loss] to help society.”

After having to fight for her son Ryan’s well-being during his eight month incarceration at CNCC, Sharon Storring-Skillen formed Families Against Private Prison Abuse, (FAPPA). She told the Midland Free Press, 20 August 2004 that she has collected audio cassettes of conversations and legal pads full of mainly medical complaints from prisoners at CNCC. Meanwhile, an inquest into the death in August 2003 of former CNCC prisoner Jeffrey Elliot opened on 13 September 2004. Mr Elliot died of blood poisoning after being transferred from the prison to hospital three weeks after being wounded. An incident at CNCC on 4 September left two prisoners with stab wounds.

Utah-based MTC has a five year contract worth around C$ 34.16 million per year at a daily spend of C$79.45 per prisoner. The contract expires in November 2006. MTC also operates prisons in the US and has one contract in Australia. It has been negotiating for a contract in Costa Rica and has aspirations to run prisons in the UK (see PPRI # 62, 61, 52, 51, 49- 46, 42 & 38-36).

England and Wales: still no evidence on recidivism rates

After 12 years there is still no evidence that private prisons in England and Wales contribute to any reduction in prisoners’ reoffending rates.

In a parliamentary question John McDonnell MP asked the prisons minister how much the reconviction rate has changed since the introduction of the private sector to the prison service. The prisons minister replied that the first private prison opened in 1992 and that “figures for the number and percentage of prisoners reconvicted within two years of discharge from prison are given in Prison Statistics England and Wales, 2002.” (Source: Hansard, 8 June 2004). However, while this report contains a great deal of data it contains nothing about private prisons.

A previous parliamentary question in 2000 on this issue brought the following response from the then prisons minister: “since prisoners may move between privately owned and publicly owned prisons on a number of occasions during their sentence, it is not possible to calculate the reoffending rates...” (Source: Hansard, 9 March 2000).

Only one private prison, Dovegate (see below), has the operator’s performance fee related to reducing reoffending rates but only for 200 of the prison’s 800 prisoners (see PPRI #56).

Premier’s Dovegate safe but intake “commercially skewed”

Dovegate prison’s 200 bed theraputic community (TC) was “a very safe place” according to a recent report by the chief inspector of prisons for England and Wales. However, the chief inspector also stated that “it was of concern that selection [of prisoners] was apparently being skewed by commercial imperatives. This was neither appropriate nor fair, and it mitigated against the integrity of therapy...”

The chief inspector, Ann Owers, noted: “... there was a concern that in order to keep up the numbers on the TC required by the prison’s contract - and because the prison service was slow in transferring prisoners in and out, prisoners from Dovegate’s main prison were taking precedence over those from elsewhere on the waiting list. Many of those from the main prison were clearly unsuitable (77 prisoners had been returned since January 2002) ...” This meant that TC places were “not available for more difficult and personality disordered prisoners who might benefit from therapy.”

It was considered that “therapeutic groups with white British majorities are not appropriate to manage all issues of concern to ethnic minorities. The TC needed to raise the profile of race relations and ensure formal recording and investigation of all incidents of a racial nature.”

The Premier Prisons-run unit is based on Grendon, the country’s only publicly operated - and world renown- therapeutic prison. The chief inspector noted that: “it is too early to say whether Dovegate TC will emulate Grendon’s longevity.” There was no inspection of the delivery of therapy itself. However, she found that “there is much to commend both in the therapeutic model and in the way it has been implemented ... some very serious and often extremely difficult offenders are clearly helped to readjust to a level of appropriate and law abiding behaviour while they are in the TC, with every prospect of this learning assisted progress with the remainder of their sentences and, hopefully, on release.”

The chief inspector noted six examples of good practice. There were also 104 recommendations for improvements.

Dovegate’s 600 bed main prison opened in July 2001(see PPRI #58 & 56). The Therapeutic Community opened in November 2001.
Report on an Announced Inspection of HMP Dovegate 29 March-2 April 2004 by HM Chief Inspector of Prisons, July 2004, published 14 September 2004.

Money go round

Bridgend Custodial Services Ltd, the operator of Parc prison at Bridgend, Wales, made a pre-tax profit of £3.94 million for the financial year ended 30 September 2003. Shareholders’ dividends for the year were £2.76million, increased from £2.43million in 2002. The company is a subsidiary of Securicor which is now owned by Group 4.

Sodexho subsidiary UK Detention Services Ltd now has contracts to operate Forest Bank, Bronzefield and a new prison opening at Peterborough in 2005. It also operates Harmondsworth immigration detention centre and two probation hostels. Its pre-tax profit for the year ended 31 August 2003 was £1.95m. Shareholders’ dividends for the year were £1.39m (£1.68m 2002).

Onley Prison Services Ltd is the operating company for Rye Hill prison,Warwickshire. Its pre-tax profit for the year ended 31 December 2003 was £0.7million. These extracts from the then Group 4-owned company’s most recently filed accounts show the web of companies and payments involved in the operation of this PFI contract.

Failure to meet KPIs

Private prisons in England and Wales failed to meet some contractually agreed Key Performance Indicators (KPIs) in 2003-2004, according to recent government statistics.

Assaults - six failed to meet their target on preventing serious assaults. The target is for the number of serious assaults against prisoners or staff expressed as a proportion of the prison population. Parc, which had the seventh highest level of serious assaults compared to all prisons in England and Wales, had the highest rate in the private sector. The rate of serious assaults on prisoners or staff that resulted in a positive adjudication was three times higher than the target acceptable under Securicor’s contract. The serious assault rates at Dovegate and Wolds were amongst the highest compared to all prisons in England and Wales.


Actual performance on serious assaults (rate on prisoners and staff)

Target on serious assaults













Forest Bank



Lowdham Grange






Rye Hill






Purposeful Activity  -
both Dovegate and Parc were well below their targets for the average number of hours of purposeful activity that they are contractually required to provide per week. Altcourse was the only private prison that met its targets.


Actual performance on purposeful activity (average hours per prisoner each week)

Target on purposeful activity













Forest Bank



Lowdham Grange






Rye Hill






Drugs  - there were particularly high levels of drug use at Dovegate, Forest Bank and Parc. Altcourse also failed to meet its targets for the rate of positive drug tests. Each prison has to randomly test a proportion of prisoners for drugs every month.


Actual performance (percentage of positive random drug tests)

Target on drug testing













Forest Bank



Lowdham Grange






Rye Hill






Source: 2003-04 Outturn and targets by Establishment, HM Prison Service Planning Group, 15 July 2004.

Restraint inquiry launched

The Howard League for Penal Reform has launched an independent inquiry into the use of strip searching, physical restraint and segregation of children in public and private custodial institutions. This includes children held in privately operated secure training centres (STCs, see PPRI #62, 60, 54, 48, 43, 40, &37).

In April 2004 15 year old Gareth Myatt lost consciousness while being restrained by three staff in Group 4-run Rainsbrook STC. He later died in hospital. As a result of this incident the use of a technique known as the ‘seated double embrace’ has been banned. More recently, Adam Rickwood, 14, died at Premier–run Hassockfield STC.

Official figures have revealed that, between 2000 and 2004, restraint was used 11,087 times on young offenders at the three private secure training centres in England: 4,675 times at Group 4-run Medway; 2,810 at Group 4-run Rainsbrook and 3,602 at Premier Prisons-run Hassockfield. Source: Hansard 24 June 2004.
* The Howard League wants to hear in confidence from current and former staff and residents of these institutions. Tel: 020 7249 7373. Email:

GEO due to settle $10.1 million lawsuit

The GEO Group Inc. is expected to settle a lawsuit brought by some 2,700 past and present prison employees who have alleged that the company engaged in unfair labour practices.

Correctional officers and support staff at six California facilities, including the Taft Correctional Institution (TCI, see PPRI # 63) that GEO runs under contract for the Federal Bureau of Prisons, alleged that the Wackenhut Corrections Corporation and GEO as it is now did not pay overtime and made staff work ‘off the clock’ without pay. Rest and meal breaks were denied. Some staff were not paid according to their appropriate status. The class action lawsuit developed from a single complaint.

Under the proposed settlement those employed at the various facilities between December 1997 and July 2004 could share $10.1 million worth of cash payments or time off in lieu. The company will also have to implement new time keeping systems and retrain its human resource staff in labour laws.

The case, which has lasted three years, is due to be finalised on 27 September 2004. The employees’ attorney, Philip Ganong of Bakersfield, California, told PPRI that, under the terms of the proposed settlement, the company admits no liability or wrongdoing and neither party is allowed to disparage the other.

Taft whistleblower wins legal battle

John Elliot, a former warden at the Taft Correctional Institution (TCI) has been awarded more than $640,000 compensation by a federal court in Fresno, California, after being dismissed by Wackenhut Corrections Corporation for alleging mismanagement at TCI (see PPRI #63).

The settlement comes after a three year legal wrangle over whether his actions were covered by California statutes that protect whistleblowers. A federal court recently found in his favour. GEO Group Inc has agreed not to file an appeal.

Mr Elliott claimed that the company retaliated against him after he wrote to government officials alleging that Wackenhut Corrections Corporation: covered up a prisoner escape; allowed sexual and physical assaults and drug use by prisoners; allowed prisoners to possess weapons; mishandled incident reports; and was not complying with its contract with the Federal Bureau of Prisons. Mr Elliott was initially suspended without pay and then dismissed.

Recent operational problems

Corrections Corporation of America (see PPRI # 63, etc) has been in the spotlight recently. For example:

Meanwhile, the directors of Cornell Companies Inc. are still being challenged by angry investors who claim that they are losing out on bigger returns (see PPRI #63, etc). The Houston Chronicle, 15 August 2004, stated that, according to investors and analysts Cornell “lands an impressive number of new contracts ... but they never seem to turn a profit.” The newspaper quotes one stock analyst as saying that “there has been a litany of failure.”

Other recent problems include:

Management & Training Corporation (MTC, see PPRI # 58, 55, 51, 50, etc) has had the career of its chief executive business development Lane McCotter under scrutiny following his work in Iraq. MTC is currently facing a lawsuit from the family of a prisoner who died at the company’s Santa Fe Adult Detention Center, New Mexico. The prisoner, Dickie Ortega, was beaten to death by two other prisoners on 6 June 2004. The family alleges a lack of adequate staffing and inmate supervision, lack of video monitoring, inadequate policies regarding prisoner classification and problems with hiring, training and supervision of correctional officers. (Santa Fe New Mexican, 31 August 2004)

Ministry spreads the word of ‘P’

The evangelical Christian Mission Gate Prison Ministry is based in Chesterfield, Missouri, and operates in southern Illinois and Missouri. It is well connected to the Republican Party: its executive board includes US senator Jim Talent and its advisory board includes congressman Todd Akin and Missouri state senator John Loudon.

According to Mission Gate’s website the organisation is “committed to continue to demonstrate how lives can be turned from crime to Christ without government control and intervention or funds. Plus no cost to the taxpayers. Think about that!” Its criminal justice ministry lists a simple, seven point plan for reversing recidivism:

1. Privatisation of the criminal justice system
2. Privatisation of all services and agencies of the criminal justice system.
3. Privatisation of inmate employment in the local community.
4. Privatisation of victim restitution in the local community.
5. Privatisation of community reintegration of former inmates.
6. Privatisation of vocational and educational training.
7. Privatisation of all faith based services and agencies.

Senator John Loudon’s website reveals that he is also a member of the pro-privatisation American Legislative Exchange Council (ALEC, see PPRI #62, 55, 54 & 38).Meanwhile, according to senator Jim Talent’s voting record on crime over the last ten years includes:

* NO on funding for alternative sentencing instead of more prisons (June 2000);
* YES on more prosecution and sentencing for juvenile crime (June 1999);
* NO on maintaining the right of habeus corpus in death penalty appeals (March 1996);
* YES on making federal death penalty with life imprisonment (April 1994);
* NO on replacing death penalty with life imprisonment (April 1994);
* FOR more prisons, more enforcement, effective death penalty (September 1994).

AIMS fined A$300,000, loses part of contract

Australasian Integration Management Services (AIMS) has been fined A$300,000 for a security lapse which led to nine prisoners escaping from the supreme court in Perth, Western Australia, in June 2004. The Sodexho-owned company has also lost the contract to provide security at that court. However, for now, it has kept the remainder of the A$18.5 million contract for court security and custodial services at most major courts across Western Australia (see PPRI # 59, 57, 55, 52, 48, 37, 36, etc).

A government-commissioned inquiry into the escapes found that:

The inquiry also found that the department of justice’s monitoring of the company’s performance under the contract was inadequate.

In a statement to Western Australia’s legislative assembly on 17 August 2004, the premier, Dr Geoff Gallop, said: “When presented with the draft findings of the inquiry for comment, AIMS Corporation publicly acknowledged that the escape had been inexcusable and that it had badly failed the people of Western Australia. I concur with this view.”

Dr Gallop added that “AIMS Corporation will incur fines totalling A$300,000 for the supreme court escape and other escapes this contract year. It will also permanently lose the supreme court custody area of its contract, adding a further financial loss of approximately A$300,000.”

He said: “...the responsibility for the supreme court custody area will remain with the department of justice. The state government was also due to advise AIMS of any contract renewal in October 2004. Given the findings of the Hooker inquiry, this will not occur. AIMS will be on notice that it has six months to demonstrate significant and major improvements in its operations. Any failure to do so may result in the company playing no further role in the delivery of court security and custodial services in Western Australia.” (, 17 August 2004)

The government also announced a A$3.6 million improvement programme for court security.

The department of justice has also taken over from AIMS the management of metropolitan juvenile transport and escorts and the Perth holding rooms. The decision was taken in April 2004 following a review of the AIMS contract.

Prisoner hanging: coroner critical of Group 4

The government of South Australia coroner has criticised the state and Group 4 following the death of a prisoner at Mount Gambier Prison on 2 September 2001 (see PPRI # 50, 48, 43, 41, 10 & 7).

Mr Troy Turner was found hanged in his cell at the Group 4-run prison. Following an inquest in July and August 2004, the coroner stated that “this is yet another case where the design of the cell has provided an easy hanging point to enable a prisoner to commit suicide.” He also said that: “correctional officer Cluse’s direction that Mr Turner not be cut down and resuscitation not be implemented was inappropriate. He was in no position to determine that resuscitation was pointless.” The coroner recommended that:

In the Matter of Troy Philip Turner, Findings Of Inquest, 6 August 2004,

Australia’s private prisoner population

There were 4,197 prisoners in Australia’s private prison as at 30 June 2003. Figures published by the Australian Bureau of Statistics show that, with a total prisoner population of 23,555, this represented 17.8 per cent. However, the figures excluded those held in privately operated police lock ups, court cells and immigration detention centres.

New South Wales Junee Correctional Centre 727
Victoria Fulham Correctional Centre 746
  Port Phillip 724
Queensland Borallon Corr. Centre 489
  Arthur Gorrie Corr. Centre 707
South Australia Mount Gambier Prison 108
Western Australia Acacia 696

Source: Australian Bureau of Statistics, Prisoners in Australia, January 2004.

ACT prison tender

The Australian Capital Territory (ACT) is to build a 347 bed prison in Canberra (see PPRI #55, 48, 41, 38, 35, 30 & 25).

The facility, which will be publicly owned and operated, will hold men and women and will allow the government to stop sending prisoners to serve their sentences in New South Wales. The government is seeking expressions of interest from companies to work on pre-tender industry consultation and design work.

Privatisation debate necessary

The Cape Times provided a forum for a discussion on the merits of private prisons in South Africa recently (see PPRI #63, 61, 58, 56, 54, 52, 51, 42, 38, 36, etc).

The debate was led off on 29 July 2004 when, on the basis of a visit to GSL-run Manguang prison at Bloemfontein, the opposition Democratic Alliance’s spokesperson on correctional services, James Selfe, argued that the department of correctional services “can learn a great deal from the Manguang experience.” While noting that, unlike South Africa’s public prisons, the two private prisons are protected from overcrowding and only hold sentenced prisoners rather than detainees on remand Mr Selfe also argued that the “difference lies in a more sophisticated idea of the concept of rehabilitation...” by adding “... the element of restorative justice.”

South Africa’s minister of correctional services, Ngconde Balfour, replied on 2 August. “The ... standards of custodial care and development that Selfe refers to are not a thumb-suck but are derived from the mandate of the DCS and, as such, determined by the department,” and that “restorative justice is a key component of corrections and the DCS farms and workshops play an invaluable role in giving effect to government’s determination to fighting poverty.” The minister argued also that Mr Selfe’s basis for comparing private and public prisons was “at best, disingenuous.” However, the minister conceded that “there are differences relating to physical structure and operational control of facilities. Most of these [public] facilities come from our distant past and were never adequately maintained or upgraded.”

On 4 August, the Cape Times allowed the inter-party rivalry to be cut through by a contribution from Chris Giffard of the Prison Transformation Programme, Centre for Conflict Resolution at the University of Cape Town. He said: “ ... it is necessary to wave a large flag of caution. Prison privatisation in South Africa was introduced under a veil of secrecy. There was little if any public debate in parliament or civil society ... the issue of whether to allow the punishment of criminal behaviour to be in private hands and indeed whether companies or individuals should profit financially from the consequences of crime, are complex issues worthy of strenuous debate.” Going on to describe developments in the United States and the move by prison companies to “look for opportunities in less developed countries” Giffard argued that: “the prison industry should not be part of the engine of economic growth in our country. If it does, we may lose sight of why we need prisons and how we should use prisons in the first place. We are potentially on the same track [as the US] if private US prison companies invest in South Africa in the form of foreign direct investment, since we are ranked fourth globally in the per capita imprisonment rate.” He concluded: “We need to publicly debate these issues through the portfolio committee, in parliament, in political parties and in civil society.”

Exploring the criminal justice potential

Europe as a market for private criminal justice infrastructure and service provision was the focus of two recent conferences in London.

The European Infra Forum ‘Developing the Role of Private Finance in European Infrastructure 2004' took place in May. Advertised as an opportunity to ‘meet the European market in one place at one time-network with Europe’s leading PPP developers and thinkers’, scheduled discussions included the question of whether there will be a prisons programme of deals in Portugal and the future of the French market following the introduction of the new Ordonnance. Briefings included an examination of the challenge of combining EU finds with PPP structures and assessing ongoing and forthcoming PPP projects in Central and Eastern Europe. The keynote debate was ‘The European Market: What Factors Will Encourage The Development of a Greater Dealflow in 2004-05' and ‘What Action Must be Taken by the Market?’

Principal sponsors included Bank of Scotland and PricewaterhouseCoopers. Other sponsors included Bouygues, Bovis, Cintra, Egis, Eiffage, Hochtief, Laing, Mota-Engil, OHL, Somague, Techint, Vinci and Walter Bau as well as Standard & Poor’s, XL Capital Assurance the Secondary Market Infrastructure Fund. The event was endorsed by IFSL, The International Project Finance Association and UK Trade & Investment.

Meanwhile SMi’s June conference ‘Private Finance in the Criminal Justice Sector was scheduled to include speakers from Hungary and France’s ministries of justice as well as London’s member of the European Parliament, Robert Evans. He was supposed to provide an international market update. However, none of those speakers turned up. Apart from a brief session on South Africa (see PPRI #63) the rest of the presentations dealt with PFI courts and police facilities in the UK and Northern Ireland as well as financial and legal issues and operational outputs, specifications and risks.


Prison Privatisation Report International
Public Services International Research Unit (PSIRU)
Business School, University of Greenwich
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