Twenty-five high-capacity trains will be purchased and four level crossings removed as part of an election-year sweetener from Premier Denis Napthine.
The program will increase capacity on the Cranbourne and Pakenham lines, allowing for 4500 more passengers in peak times, the state government announced on Thursday.
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More trains for south-east
Plans unveiled for a transport boost with 25 new trains set for Cranbourne and Pakenham allowing for 4500 more passengers in peak times.
The new trains will be 20 per cent bigger than the existing six-car sets, and are expected to be in service by 2017.
Level crossings will be removed in Murrumbeena, Carnegie, and two in Clayton.
A new rail maintenance yard will also ne built in Pakenham east.
Dr Napthine said the government would soon announce a new station at Southland.
"We want to deliver more trains carrying more people more often, and that’s what we are on about as a government," he said.
The government estimated the entire package could cost up to $2.5 billion, with new high-capacity signalling included, and create 3000 jobs.
Railway stations at Clayton, Murrumbeena and Carnegie would also be rebuilt.
Transport Minister Terry Mulder said the government would go to the market to get the best value for the new trains.
"We are looking to get a very good outcome for the state in terms of manufacturing but also value for money," he said.
The Pakenham and Cranbourne line upgrade is the first under the government’s "unsolicited proposals process", and will be delivered by Metro Train owner MTR, with John Holland Construction and UGL Rail Services.
Dr Napthine said it would be paid for through the normal budget process but declined to elaborate on where in the budget the money would come from.
Asked when the government would remove the deadly level crossings in the Labor heartland of St Albans, Mr Mulder said "we are progressing those level crossings ... there is pre-construction work being undertaken".
St Albans is on the government's priority list for level crossings. Mr Mulder could not say if they would come before the crossings in the south-east announced on Thursday.
Mr Mulder reaffirmed the government’s support for an airport rail link – a promise that was also made before the last state election.
Thursday’s media conference included the Coalition's new election-year slogan, "leadership, trust and vision".
Public Transport Users Association president Tony Morton welcomed the announcement but added public transport users were wary of election-year promises.
"It is great news, the PTUA is right behind what they are doing on the Dandenong line, it is exactly what we asked for – what’s missing is the extension to Monash University and Rowville," he said.
He said the disappointing part was the north and west of Melbourne were missing out on public transport upgrades.
"The government is under a lot of pressure to do something about public transport. They know they were elected on fixing the public transport system, they know that opinion poll after opinion poll by a clear majority have a preference for prioritising public transport investment over road investment, yet their priority project is still the East West Link two stages," he said.
Opposition public transport spokeswoman Jill Hennessy said it was a lost opportunity and the government should have committed to removing more level crossings and building the Metro Rail project.