The Weekend Australian carries the following article which claims that not only is Western Australia’s only private prison 30% cheaper to the taxpayer than the public prisons, it is also better by most measures including prisoner welfare. Worth a read:-
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Australian Libertarian Society (old site) 
Real private prisons would be prosecuted for imprisoning drug dealers and tax evaders.
I’d be more interested to see the specifics of how they seem to get the recidivism rate down. Surely it’s not all tennis and football?
Most governments subsidise local labour intensive industries. Libertarians might not like it, but it happens.
Prisons are a labour intensive industry. They get paid per prisoner. That makes them REAL easy to subsidise.
Be careful what you wish for… you might get it.