More than 100 new jobs will be created with the opening or upgrading of two prisons on the South Coast.
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Earlier this year, the state government announced plans to open a minimum security prison in Lady Penrhyn Drive in Unanderra.
The facility, expected to open in January next year, will have 60 beds.
Corrections minister David Elliott said the Unanderra facility will create 22 new jobs.
As part of a statewide plan to increase the capacity of the NSW correctional system, the South Nowra Jail will be enlarged.
The South Coast Correctional Centre will get an extra 200 minimum security and 160 maximum security beds.
The minimum security section will be built on site as an additional wing to the current complex, while the maximum security component will be a modular cell construction built off site and shipped to South Nowra.
The extra beds are expected to see the creation of 90 new jobs at the centre.
The statewide plan will see more than 4000 new beds created across the state.
“This expansion program will create more than 2380 new jobs, including highly-trained correctional officers and administrative staff, and have a positive impact on local businesses through increased trade,” Mr Elliot said.