The state government has relied on money from a federal government program that gives a 15 per cent incentive to the states for the sale of public assets – in this case the $9.7 billion Port of Melbourne lease.

Western Victorian MP Jaala Pulford said the federal government was playing games ahead of its budget due next week.

“There has been really constructive dialogue between Victorian Transport Minister Jacinta Allan and federal Transport Minister Darren Chester,” she said.

“But it would be nice if the federal government was as excited as we are.”

The money is for a new train shed at Ararat, so trains can be kept there overnight, which will add an extra morning service.

It will also upgrade the line’s signalling.

This will benefit commuter trains to Ballarat and freight trains.

Federal Transport Minister Darren Chester said on Sunday the state government had missed the deadline for applying for the funding.

“What we have seen today basically is Premier Andrews has written a Santa wish list to the prime minister without any of their own money on the table,” he said.

“They need to provide us with a business case and show some real commitment with a dedicated regional rail fund.”

Public Transport Minister Jacinta Allan said the money would help both passenger and freight trains.

“The timetable will be finalised closer to when the works have finished,” she said.

“Most importantly there has been a lot of strong representations out of the Ararat community, particularly the council, and they have impressed upon us the need for extra services in an out of Ararat.

“We have listened very carefully to that and by constructing stabling there in Ararat it means trains can stay there overnight.”

The $39 million would fund stage two of the Ballarat line upgrade, with stage one already underway.

There was also $435 million for the Ballarat line, and $100m for Warrnambool’s.