State seeking $195 million extra federal funding for Murray rail project

The review proposed a package of works which requires an additional $244 million to complete, taking the overall investment in the Murray Basin Rail Project to $814 million.

The Victorian Government will commit $48.8 million in further funding towards the project, and is seeking $195.2 million from the Commonwealth.

But the revised business case - which has just been released by the Victorian government - has found the upgrade will not be completed, as originally planned.

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The business case authors argue "further standardisation of the network cannot be justified, on a value for money basis.

"The cost of further standardisation are significantly greater than forecast in the original business case and the anticipated benefits can largely be achieved by enhancing the existing standard and broad-gauge networks," the authors of the revised business case found.

The government has released the revised business case for the completion of the project, which stalled a year ago, after it ran out of money.

The business case opts for the fourth option, contained in the original scope for the project, which recommended: "optimising the capacity and performance of the current 2019 network, particularly the Yelta line, but without converting the remaining broad gauge lines to standard gauge.

"While the review finds that at this stage it is not cost effective to standardise the Manangatang and Sea Lake lines and to deliver the Freight Passenger Rail Separation Project, the Department of Transport will continue to assess the need for these works into the future as part of its onging network planning processes."

The revised business case noted that "performance issues" remain on the network, due to the decision to pause further work on the MBRP.

"These issues are resulting in reduced capacity, increased journey times and increased costs for operators and producers," the authors state.

Transport Infrastructure Minister Jacinta Allen said it was disappointing the federal government had not included funding for the project, in its recent budget.

"This project is too important to play politics with - we want the commonwealth to come forward with their support so we can get more freight on trains and more trucks off regional roads," Ms Allen said.

"Our rail freight and passenger network has transformed since the project was first developed, and this revised set of works will make sure this project delivers for Victorian farmers and freight operators well into the future."

The $440 million project, to standardise the entire Murray Basin rail network by converting it from broad gauge and increasing axle loading from 19 to 21 tonnes (TAL).

It has been stalled for 12 months, after the government ran out of money.

The revised business case propses:

V/Line has already "booked out" - taken out of service - a section near Rainbow, to allow for concrete resleepering of the 66 kilometre line.

The business case was revised by Deloitte, and Rail Freight Working Group chairman Peter Tuohey said members had been encouraged to provide input into it.

The working group is made up of rail operators, government officials, and representatives from the VFF and local government.

But Mr Tuohey said the group had not been allowed to see what went to state cabinet or the federal government.

The Freight Working Group is believed to be meeting again, tomorrow.

Ms Allen said the decision built on the Victorian government's significant investment in stimulating the state's freight network, through and beyond, the coronavirus pandemic.

She said the commwonwealth was provided with the revised business case in May, and Victoria had been working closely with federal authories to determine the next steps for the project.

She said works on the project were ready to go

But if the commonwealth government continued to stall, works would not be able to begin before the 2021 grain season - meaning less freight on trains and more trucks on regional roads.

It was been eight years since the original business case was developed and the revised business case noted that Victoria's freight and passenger rail networks had evolved significantly in that time.