Calls are mounting for the state government to consider putting the operation of the Northern Regional Prison out to private tender, but Corrections Minister Elise Archer has immediately shut down the suggestion.
The state government this week announced a consultation period for its proposal to build a $270 million prison on a 41.5 hectare site two kilometres north of Westbury.
The prison is expected to be fully up-and-running by 2029.
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Former Legislative Council president and independent Launceston MLC Don Wing chaired an upper house committee in 1999 looking into Tasmania's prison system.
The committee recommended Risdon Prison be replaced by a new facility and that a Northern prison also be built.
Mr Wing said he was "disappointed" that it had been 20 years and there was still no prison in the state's North but he commended the government for taking action on the matter.
"In recommending two new prisons, [the committee] recommended that tenders be called for each one [so] that private companies operating prisons [were] able to tender on the basis that at least one of the two recommended new prisons should be state-controlled," he said.
"Even though there's just one prison being built [now], it still gives an opportunity for the government to call for tenders and to include any private operators that wish to submit a tender."
Mr Wing said he had once spoken to the boss of a prison near London who outlined to him the supposed benefits of a privately operated prison.
"He said the private prisons were able to provide better services because they had a budget and an agreement with the government and the government was obliged to honour the agreement about employment and working conditions and the provision of funds," Mr Wing said.
"Whereas in tight economic times, governments cut back on many services, including prison services."
Economist Saul Eslake said a private tender process for the Northern Regional Prison was "probably worth considering".
"I don't start from a belief that these things are necessarily better run by the private sector [compared to] the public sector," he said.
However, Mr Eslake said the government could "examine whether [a privately operated prison] would result in savings to the taxpayer without compromising the reasons why we have prisons in the first place, which is as a deterrent, to protect the community and ... rehabilitate prisoners".
Former independent McIntyre-West MLC Greg Hall, whose now defunct electorate encompassed Westbury, said he had "no problem" with Mr Wing's suggestion of implementing a tender process.
"It's done in other jurisdictions and it's been successful," Mr Hall said.
But Ms Archer shot down any talk of a private prison.
"The government has previously said and stands by its commitment to not privatise the Northern prison," she said.