The Victorian and Commonwealth Governments are making rail freight cheaper for businesses and taking trucks off suburban roads, thanks to a $28 million investment in direct rail freight between the Port of Melbourne and Dandenong South.

A new track connecting the main rail line with Dandenong South-based Salta Properties freight hub will bust congestion in Melbourne’s growing south east region.

The upgrade will connect to the Port of Melbourne’s $125 million on-dock rail project, allowing shuttles to run from Dandenong South directly into the port.

The Australian Government has invested $18.3 million in the project, and the Victorian Government is investing $9.7 million. The work is being delivered by the Level Crossing Removal Project as part of the $1 billion Cranbourne Line Upgrade.

The new connection is the next step in delivering the Port Rail Shuttle Network, which will remove congestion around the Port of Melbourne, cut transport costs for freight by as much as 10 per cent and reduce truck trips on the suburban Melbourne roads by up to 100,000 annually.

The improved rail connection will further unlock private sector co-investment, with Salta Properties to construct the freight terminal and build on the strengths of south east Melbourne as a freight and logistics hub.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the new freight rail link will help Melbournians get home sooner and safer while supporting hundreds of jobs when and where they are needed most.

“We are backing this vital freight rail connection to support Melbournians through the pandemic and unlock private sector investment and economic growth into the long-term,” Mr McCormack said.

“The new spur line will connect the intermodal freight terminal at Dandenong South to the Cranbourne Line. As part of the Port Rail Shuttle Network it will help cut the number of trucks on inner Melbourne roads by up to 100,000 each year and support hundreds of jobs during construction and as part of the terminals ongoing operations.”

“The focus of our government is getting people in jobs and our industries open and ready for business as we continue to deliver our record 10 year, $100 billion land transport infrastructure pipeline to lay the foundations of a financial bridge to recovery on the other side of COVID-19.”

Victorian Minister for Ports and Freight Melissa Horne said the Port Rail Shuttle Network will help modernise Melbourne’s existing transport networks.

“This is a massive win for both motorists and industry, as we continue to reduce congestion and make it easier and cheaper for businesses to use rail freight,” Ms Horne said.

“We’re making rail freight a more attractive option for businesses, and this investment means containers can be transported by rail the entire way from the Port of Melbourne to Dandenong South.”

“It will reduce congestion at the port gate and cut the high cost of the last mile that so often disadvantages containers moved by rail.”

The project is part of the Victorian Government’s work to continue supporting the Port of Melbourne, which contributes $6 billion to the Victorian economy each year and is a crucial part of the State’s supply chain.

State Member for Dandenong Gabrielle Williams said the new rail connection would be welcomed by the local community.

“Construction and ongoing operation of the new terminal will create hundreds of jobs that are needed in the South East,” Ms Williams said.

“It will build on the strengths of Dandenong South as one of the largest manufacturing and employment hubs in Victoria.”