I do not believe that prison privatization is a good policy. Although prisons may be more efficient when run as a private business, privatization would also diminish government's say in prison operations. Loss of government control over how prisons are run should does not strike me as desirable because nothing would prevent these businesses from colluding with prisoners for a fee.
There's already a big issue right now with some prisons being exploited for slave labor in this country. I think that if prisons were privatized, this situation would get even worse. More companies would show up to exploit the prison population even further to crank out goods, since they would be more focused on turning a profit than rehabilitating prisoners.