However Treasury did not support the proposal and more than a decade on, the project remains on hold.

Cabinet documents released under the 10-year rule show in August 2005 the ACT Public Cemeteries Board came to government ministers flagging a deficit in the perpetual care trust that covers the short and long term maintenance of the Gungahlin, Woden and Hall cemeteries.

The trust, created in 2003, did not absorb the maintenance cost of existing burial sites and an actuarial review revealed there was an unfunded liability of about $6.9 million, that would blow out to $18.3 million in future.

The board estimated that without expanding its range of services, it would have to increase the price of burials by 50 per cent in order to meet past and future liabilities.

They noted price increases would not be sustainable, would hit low-income families hardest, encourage more people to opt for cremation or see more people being buried at Queanbeyan, which was cheaper.

As an alternative, the board proposed generating new revenue streams through capital investment in a crematorium at Gungahlin and memorial halls at Gungahlin and Woden, with a third potentially at Tuggeranong.

A business case noted crematoria and memorial halls were used across Australia to offset the cost of running cemeteries.

They predicted it would cost $1.4 million for the burner and the two halls, which would have been sourced from existing funds.

Their modelling indicated they could recover their costs by the sixth year of operation.

There was, and still is, only one crematorium in the ACT: Norwood Park.

The cabinet-in-confidence documents said there was enough demand in Canberra and surrounding towns for cremations to open another service and argued another crematorium could extend the life of the Woden and Gungahlin cemeteries.

But despite this monopoly, Treasury argued there was no evidence of market failure that would warrant the public sector entering he cremation industry.

Then under-treasurer Paul Grimes said in November 2005 any maintenance shortfall could be funded through the budget.

He also suggested reducing the scope of maintenance at the cemeteries or leasing a portion of the board's land to a private provider to build, own and operate a crematorium.

The board also suggested reducing the standard of maintenance at full cemeteries to help manage the liability.

They argued a 25 per cent reduction in mowing and maintenance when a cemetery was full and likely to receive fewer visitors.

However a brief to the chief minister in May 2006 said there was likely to be blowback from the public if the standard of maintenance was lowered below community expectations.

The brief recommended supporting the crematorium but only after clarifying the future liability of the trust and the risk of lowering maintenance for closed cemeteries.

But the government this year confirmed a decision was yet to be made on a publicly-run crematorium.

The board also recommended reserving block 1610 Tuggeranong for another cemetery, the Southern Memorial Park.

ACT Public Cemeteries Authority chairman Stephen Bartos told budget estimates hearings in June that cemetery would eventually go ahead, subject to budgetary conditions.

"Longer term, that will be part of the mix, but exactly when has to depend on all of the other pressures on the ACT," Mr Bartos said.

The ACT estimates committee this month urged the government to start work on burial alternatives including the Southern Memorial Park, after City Services Minister Meegan Fitzharris said they were reconsidering the planned expansion of the Woden cemetery because of light rail.