THE AUSTRALIAN government has allocated $130 million for an asylum seeker processing centre in PNG.

The government is in talks with PNG about reopening the mothballed Manus Island detention centre.

Immigration Department head, Andrew Metcalfe, told a Senate hearing the PNG centre would not deal with regional claims and would initially only deal with Australian caseloads.

“The question of its long-term future and whether it took case loads from elsewhere is not a matter currently under consideration,” he said.

Mr Metcalfe said the centre will need to be upgraded before it can be used again. The cost of upgrading could be higher than the amount of money set aside.

"I think it's fair to assume there probably would be some capital requirement, but that would require a detailed assessment as to the state of the facility and the associated infrastructure," he said.

"For all Julia Gillard's talk about a regional processing centre, in PNG, what was confirmed in estimates is it's just a straight repeat of John Howard's Pacific Solution on Manus Island," said Opposition spokesman Scott Morrison.

"The only difference is that they don't seem to be able to get it to the finish line."

Source: ABC News