Indiana Gov. Mitch Daniels announced today that the New Castle Correctional Facility will be turned over to private management early next year.

It would be the first Indiana Department of Correction facility to be turned over to the private sector. The state would still own the buildings and the land.

Daniels and DOC Commissioner Dave Donahue made the announcement this morning at a training institute adjacent to the prison. The institute will remain a state facility.

Donahue said five bids have been received so far to manage the New Castle prison, including one from some state employees who want to run the prison. That bid, however, was significantly higher, Donahue said.

The state employees were notified Monday night that their bid had been rejected. Donahue would not say who is the leading bidder. That information will become public once negotiations are completed.

Daniels said he's expecting $2 million to $3 million in savings through the arrangement. The current employees will be guaranteed an interview with the winning bidder. If they don't get offered a job or don't want a job with the prison, they will be offered any open jobs within the Department of Correction.

The New Castle prison opened in 2002 and has been a quarter filled since. Officials hope under private management the population would increase from around 500 to closer to 2,200.

Lawmakers have been reluctant to fully staff the prison because of the expense.