A federal government agency has included Canberra's light rail project on its infrastructure priority list due to increasing congestion costs, limited public transport options and projected population growth.
The project was not included on previous Infrastructure Australia lists due to concerns there was not enough traffic congestion to warrant federal funding for light rail or rapid buses.
The list of priority projects, released on Wednesday with the agency's first 15-year infrastructure plan, was based on the findings of a national audit and consultation with state and territory governments.
While the agency refrained from endorsing the ACT government's $698 million investment in light rail, it found the problems associated with Canberra's main arterial road were of national significance and demanded attention.
In 2013, an Infrastructure Australia report said the ACT government had provided limited evidence there was a nationally significant problem along the corridor in terms of access, congestion or amenity.
The report said the case for light rail over buses had also not been strongly made, with the extent of the problem unlikely to justify significant capital investment in the short term.
Infrastructure Australia's director of policy and research Adrian Dwyer said the inclusion recognised the need to improve public transport capacity on the northern corridor and to avoid costly congestion delays.
"This congestion is being caused by limited road and public transport capacity and increasing travel demand as a result of major population growth in the corridor," the report said.
"The audit shows the cost of delay on greater Canberra's urban transport network was $200 million in 2011 and is projected to increase to $700 million in 2031."
The audit also found the Northbourne Avenue corridor was the most expensive road in the ACT with delays tipped to cost $1.1 million by 2031 unless infrastructure projects or reforms were completed.
It found Canberra's population was expected to grow by 41 per cent or about 150,000 by 2031, placing additional demand on public transport and roads.
Infrastructure Australia also prioritised a proposal to develop two bus transit ways for buses connecting Belconnen and Queanbeyan to Canberra.
"Canberra's limited public transport network capacity coupled with high rates of private vehicle reliance is causing the transport network to suffer from increasing congestion," the report said.
"This congestion results in adverse economic impacts through increased travel times and higher vehicle operating costs."
According to modelling by Veitch Lister Consulting, residents in North Canberra had the highest number of bus trips per hour at 14,408 in 2011, which is forecast to increase to 27,066 in 2031.The audit found North Canberra was the most popular origin/destination for trips in 2011 followed by Belconnen and Tuggeranong.
Infrastructure Australia chairman Mark Birrell said the list of 93 projects and initiatives provided independent advice on "the infrastructure investments Australia needs".
The agency's 15-year-plan called on federal, state and territory government to reform their approaches to regional infrastructure, population studies, productivity schemes, freight networks, funding models and market processes.
"Our plan sets out 78 recommendations for reform and provides a vision and road map to address today's infrastructure gaps and set us up to meet the challenges of tomorrow," he said.
"By completing the major reforms to infrastructure markets each Australian household will be almost $3000 better off every year."