Transfield Services, the company embroiled in a series of scandals over human rights abuses in its offshore asylum detention centres, appears set to continue running the Manus Island and Nauru facilities for another five years, after being announced as the government’s preferred tenderer to run “welfare and garrison support services” offshore.

Guardian Australia understands the total five-year contract could be worth about $2.7bn, about $45m every month.

Transfield’s bid is understood to be significantly more expensive than some other tenderers, but the per-month figure was reduced from its current contract budget, due largely to smaller detention centre operations.



And Guardian Australia understands the announcement from the government means that Save the Children, which was providing welfare services for children and families on Nauru, will no longer operate on the island. That role will be taken over by Transfield.

Transfield took over running Manus Island from G4S in March 2014, shortly after an Iranian asylum seeker, Reza Berati, was killed in a riot there, allegedly by guards. It was already running Nauru. Transfield’s 20-month contract was worth $1.2bn.

The firm’s stewardship of both contracts since has been controversial. Thirty-three asylum seekers on Nauru have alleged rape or sexual assault and a further five say they have been asked for sexual favours in return for contraband. Some of those allegations have been made against Transfield staff. The company has said it has counselled, disciplined and moved some staff for inappropriate behaviour.

Transfield bosses were criticised when they appeared before the Senate for failing to answer fundamental questions about their operations on Nauru.

Transfield subcontractors, in particular Wilson Security, have been accused of a series of abuses, including handcuffing children, spying on a senator when she visited the island on an official trip, assaulting asylum seekers who were handcuffed, and running a secretive solitary confinement facility on Manus.

The company has been forced to defend itself before a number of parliamentary inquiries, including the Senate select committee that is expected to report on Monday afternoon on conditions and allegations of abuse on Nauru. That report is expected to be fiercely critical of Transfield’s running of the centre.



Transfield has firmly denied allegations it misled the Senate, and says it is committed to investigating allegations of abuse or inappropriate conduct.

“Every reported incident is investigated, actioned and reported to the department, welfare providers and the local law enforcement authorities as required,” it said. “Furthermore, any allegation of illegal activities or criminal offences have been referred to the Nauruan police force.”

The company is also the subject of a divestment campaign over rights abuse allegations.

The industry superannuation fund HESTA sold its 3% share in the company because of concerns over breaches of international human rights law and “a significant quantum of evidence that there have been numerous sexual and physical assaults in the detention centres operated by Transfield Services”.

However, the company’s 2015 annual report was stronger than in previous years.



Transfield reported an 11.6% drop in full year profit to $48.6m for the 12 months to 30 June 2015. The fall was largely because of $36m in costs relating to legacy contracts and writing off debt in North America.

Revenue grew 1.3% to $3.797bn and Transfield’s chairman, Graeme Hunt, said the result was “the strongest one, so far as I can see, probably since the company has listed”.

Transfield reported to the ASX on Monday morning: “Transfield Services Limited has been notified that it has been selected as the preferred tenderer to provide welfare and garrison support services for the Department of Immigration and Border Protection at the regional processing centres in Nauru and Manus provinces.



“Subject to completion of a contract, the company will be responsible for providing these services for a further five years.”

Save the Children’s chief executive, Paul Ronalds, said he was disappointed his organisation’s bid to continue working on the island had not been successful.

“We believe that a rights-based agency is best placed to support this vulnerable group of people on Nauru, especially given the myriad … allegations of physical, sexual and emotional abuse against asylum seekers, including several against children.”

Ronalds said the establishment of an ombudsman to oversee conditions on Nauru was crucial to safeguarding human rights.



“We know from our experience on Nauru … [that] oversight and accountability mechanisms need to be significantly enhanced and this is something Save the Children has continually called for.”