Detention centre contracts worth $1.2 billion

A NEW contractor has been offered $1.2 billion to take over security and welfare services at the Manus Island and Nauru offshore detention centres.

A statement from Transfield Services to the stock exchange released Monday confirmed it has received a formal "letter of intent" from the Abbott Government for the contract.

It said based on current occupancy at both detention centres, the contract was valued at $1.22 billion to provide garrison and welfare services for 20 months.

Transfield chief executive Graeme Hunt said the contract was a "vote of confidence" in the company's track record, having been on Nauru since that offshore centre was established.

"We do not underestimate or take for granted the differences in circumstances in Nauru and Manus," Mr Hunt said.

"However we know that we can bring much of that knowledge and our practical approach to Manus Island for the benefits of all stakeholders. We take this opportunity and responsibility very seriously."

The contract will see Transfield Services take over from the current security contractor at Manus Island, G4S, which also faces an investigation into its conduct during a riot at the centre last week.

A statement from G4S said it supported that investigation and took seriously any allegations of "violent or abusive behaviour from our employees".

The new contract is expected to start in March, while Transfield Services has already begun preparing to take over security and welfare services at both centres.

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