Serco Australia, a division of a British multinational, provides immigration detention services for the government, and has two contracts with it that have been active since 2009. But those contracts have ballooned from $323 million four years ago to a record $1.86 billion this year.

Serco has welcomed the increase in asylum seekers in its annual report. But it says its future profits in Australia will depend on the ''country conditions'' in the Middle East and Asia.

One Serco contract, for running Australia's detention centres, was originally valued at $279 million in 2009. Three amendments later, it is now worth $1.67 billion. The other - for residential housing and immigration transit services - has grown from $44 million in 2009 to $195.4 million this year.

It was updated for the fourth time last month, rising from $94 million to $195.4 million.

Both contracts are subject to confidentiality agreements.

Serco Australia enjoyed a 45 per cent rise in net profits to $59 million in 2011. It has not yet lodged its annual accounts with the Australian Securities and Investments Commission disclosing its 2012 profits, but its annual report shows it generated £824 million ($1.2 billion) in revenue in Australia last year; up from £660.4 million in 2011.

Serco admits its ''very strong organic growth'' reflects - at least in part - its capitalisation on its existing contracts, including with the government. In particular, it says, its profits in Australia reflect ''an increase in the amount of work undertaken for the Australian Department of Immigration and Citizenship [DIAC]''.

''In immigration services in Australia, the level of irregular maritime arrivals has increased in 2012, leading to a growth in the number of people in our care,'' its annual report notes.

''The level of our future activity is still likely to fluctuate based on country conditions in the Middle East and Asia, where most people in our care originate, and the prevailing government policy, speed of visa processing and the application of the Australian government's recent offshore processing legislation.''

A DIAC spokesman said it was well-known that holding people in immigration detention was expensive, but said DIAC and Serco took their duty of care to those held in detention seriously. He said the cost increases in part reflected the larger numbers of asylum seekers detained. At the close of business on Thursday, 4997 people were being held in detention facilities on the mainland.

Serco has grown its worldwide operations largely through stepping in when governments privatise services. It has a role in running prisons, immigration detention, hospitals and traffic management, among others.

The Australian National Audit Office has criticised the government's relationship with Serco, saying its contracts had been varied after the services were in place due to the rapid rise of asylum seekers in the detention centres' care.

''For example, the third deed of variation to the APOD/IDC [alternative places of detention and immigration detention centre] contract, for the provision of services at a number of IDFs [immigration detention facilities], was signed on 28 November 2011. Some of the facilities had been open for more than a year when the variation was signed.''

University of Sydney economist Bob Walker, who has written extensively on privatisation, said research had shown that privatising or outsourcing services was often as expensive or more expensive than governments running the services themselves.

''Essentially the profits of Serco reflect the loss to the taxpayer of outsourcing services that the public service could perfectly well do themselves.''

A Serco spokesman said the increase in the value of the contracts reflected the increase in the amount of work undertaken for the Department of Immigration and Citizenship.

''When we commenced the contracts in 2009, we were caring for 800 people,'' he said.

''We currently look after more than 8000, and employ more than 3000 people in immigration services.''