Two private consortiums are vying for the $1 billion contract to build and manage the single online platform, which would receive, process and provide visas for more than nine million applicants per year. The current visa system currently involves more than 50 different computer systems, two of which are more than 25 years old.

Home Affairs' deputy secretary Malisa Golightly told a Senate inquiry on Friday more than $80 million had been spent so far on the design and procurement for the new system.

She said it would assist the department to process visa applications more efficiently and provide a "seamless digital experience".

But Universities Australia chief executive Catriona Jackson warned the move could have an impact on the $140 billion higher education sector.

Privatising visa processing in UK had pushed up the cost of applications and led to huge wait times, Ms Jackson said.

She said while the current system was not perfect, it was not clear involving the private sector would provide "the same assurance of quality and efficiency" as the current arrangements.

"Australian universities are one of the largest users of the visa system and this is fundamental to both the strength and the quality of a truly internationalised higher education system," Ms Jackson said

"As the peak body representing the sector we urge real care and real caution on the impact that any moves to privatise, outsource or partially privatise - however you want to describe it - Australia's visa program, we're genuinely concerned it may have a bad impact on the ability of Australia's universities to recruit students and staff from overseas."

Refugee advocates feared the involvement of a private company could make it harder for applicants to obtain their files under freedom of information.

While the government has said refugee and humanitarian visas will not be outsourced under the plan, Refugee Advice and Casework Service principal solicitor Sarah Dale said many people who applied for refugee status came to Australia on other visas.

"It is important to note most current protection applications have now arrived in Australia via another visa stream. Given the limited information available in regards to a visa automation system, it is not unreasonable to suggest that simply removing protection from this system is going to implement the protection needed, given the close alignment between the visa streams," Ms Dale said.

The Migration Institute of Australia's John Hourigan said private companies may charge a fee to access documents.

"In the immigration sphere the department receives many requests each year for visa applicants to access their documents particularly where they've changed registered migration agents or some years down the track they want to apply for something else," Mr Hourigan said.

"Some clients particularly in the refugee area if they have several files that contain a lot of documentation we could be talking 500 plus pages which the department holds and they need each and every one of those documents to make sure they don't provide false and misleading information in a later application."

But Ms Golightly said the government was not seeking to privatise or outsource Australia's visa decision making.

"The department will maintain full responsibility and accountability for policy, security, risk assessment, and visa decision making," she said.

"The global digital platform provider and its staff and contractors will not be involved in the consideration of these applications, or undertake any visa decision making. The department alone will determine the business rules for the platform that the platform implements. It will determine which questions are asked of which applicants and the workflow process each application or follow. As said out in the tender documents and our submission, refusal decisions or decisions that take away a right or entitlement will only be made by departmental officials. They will not be made by the computer."

But the Community and Public Sector Union's Melissa Donnelly said the platform would be owned by the private provider, which gave them "enormous discretion".

She also pointed out of the 28 stages involved with deciding the outcome of a student visa application, only one step would remain with the department.

Former Immigration Department deputy secretary Abul Rizvi also said there were key questions about the tender which had not yet been answered.

"Firstly, what drove the Department of Home Affairs to choose the privatisation option? Was it the staffing cap? Was it the difficulties that the Home Affairs leadership is having with staff morale, or was it a reluctance on the part of the Department of Finance to adequately fund the next phase of development, despite the significant and growing level of access revenue from these applications fees compared to resources devoted to visa processing," Mr Rizvi said.

Mr Rizvi also said it was not clear what arrangements were in place if the private provider underestimated the cost of building the platform, or if the massive caseload that has been assumed is not realised. The winning bidder is supposed to make upwards of $300 million a year on visa fees, according to tender documents.

"Finally, given the pressure on the private provider to provide strong returns to its shareholders, how will Home Affairs deal with relentless demands on it to allow the private provider to use the ICT platform to increase profits, but which are negative to the national interest? How can we be confident Home Affairs will be able to resist such pressure, especially as the opportunities requested by the provider provided by the private provider may proceed in small incremental steps," Mr Rizvi said.

"Without adequate responses to these four sets of questions, I would strongly suggest the committee recommend the the proposed privatisation not proceed, or if it is to proceed, Home Affairs ensures it has an adequate get out of jail clause in the contract that minimises cost to the taxpayer, when the ICT platform has to be brought back into public ownership."