Australia uses offshore detention centres to process asylum seekers who often pay people smugglers in Indonesia to sail them into Australian waters.

British firm G4S, the world’s biggest security group, previously held the tender to run the Manus Island centre. It is under investigation by the Australian government to determine whether there was any misconduct by PNG G4S employees during the recent riot.

G4S has a chequered history. In 2012, it failed to provide enough staff for the London Olympics and has since been involved in problems with an electronic tagging contract in Britain and unrest at prisons it has run in South Africa and Britain.

Shares in Transfield, which already provides security at the Nauru centre, surged 26 per cent to two and a half month highs of A$1.00 after the Manus Island contract was awarded.

In July last year, a riot broke out on Nauru after the Australian government announced it would send all asylum seekers to Papua New Guinea for assessment and eventual resettlement. Several accommodation buildings were destroyed by fire.

Refugees detained on Nauru have staged hunger strikes and committed other forms of self-harm, with some attempting suicide in protest against the facility’s conditions.

“We do not underestimate or take for granted the differences in circumstances in Nauru and Manus,” Transfield’s Chief Executive Officer Graeme Hunt said in a statement released to the Australian Stock Exchange.

“We take this opportunity and responsibility very seriously,” he said. A formal handover for the 20-month contract would start in early March, Hunt said.

Refugee advocates said the changes to management at the detention centres would be minimal, arguing that the problem was the existence of offshore processing itself.

The number of asylum seekers reaching Australia pales in comparison with other countries but it is a polarising political issue that stokes tension with neighbouring Indonesia.