Construction of a R662 million prison outside Kimberley, one of seven new jails, was well underway, the construction company said on Wednesday.
The medium security facility would accommodate about 3,000 men and was due for completion in November 2008, said contractor Grinaker-LTA, part of the JSE-listed Aveng Group.
Three of the other prisons, announced in 2002, would be built in Leeuwkop, Johannesburg, Nigel on Gauteng's West Rand and Klerksdorp in the North West.
Chairman of Parliament's Portfolio Committee on Correctional Services Dennis Bloem said the seven new prisons were designed to make rehabilitation of offenders easier by housing fewer people, about 10 to 15, in sections.
At present there were communal cells designed for 30 that housed up to 119 prisoners.
"By overcrowding you are brewing more criminals than rehabilitating them. You can't manage so many people in one cell. The smaller the group, the better for the social worker, for the psychologist, for the teacher and prison officials."
According to the University of London's International Centre for Prison Studies, South Africa had 160,198 prisoners by the end of 2006, but could accommodate 115,344 prisoners - an occupancy level of 138.9 percent.
Bloem said what contributed to the overcrowding was the large number of awaiting-trial prisoners, about 50,000.
He said the committee would meet the correctional services department on May 22 to get a progress report on the new prisons.
Grinaker-LTA contracts manager Cyril Kitching said the Kimberley prison was designed around a 10m wide central thoroughfare with a control room at its centre.
Medical and education facilities, industrial workshops, a vocational training centre, multi-purpose hall, kitchen, laundry and segregation unit would be situated on either side of this avenue. Twelve accommodation blocks and three recreation centres would be situated behind these buildings, said Kitching.
The facilities would cover more than 41,574 square metres and would be reinforced concrete structures with brick walls. Roofs would be made of timber or structural steel with sheet metal covering.
Kitching said local labour would be used for the project and workers would participate in an HIV/Aids awareness programme.