Nauru detention centre

Dr Nina Zimmerman was contracted by the United Nations to visit Nauru in April and gauge the level of mental disorder within the group of about 1000 refugees and asylum seekers marooned there.

It slammed the Nauru's "limited capacity" to investigate allegations of sexual assault of children and its failure to follow up complaints while also severely criticising the harsh living conditions inside Australian's regional processing centres.

This follows the release of more than 2000 leaked documents outlining allegations of assault and cruelty at the Australian offshore detention centre on Nauru, encompassing cases of sexual assault of detainees, including children.

Sources in Papua New Guinea have told the ABC the two main companies being considered are Transfield and Serco.

However, both reported frontrunners have been embroiled in scandals in recent weeks, with allegations of sexual assault on Manus Island and brutal 'fight club' videos filmed within a New Zealand prison.

The ABC understands Australia wants to hand over total control of the Manus Island detention centre to PNG authorities in the five-year period but is willing to extend the contract for an extra four years if that does not happen.