The state government has forwarded a revised business case for the $440 million project to the federal government.

The MBRP aims to upgrade rail lines from the north-west to the Port of Melbourne, but is only half complete.

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Backers of the proposed terminal, Ouyen Inc, say it would result in five express freight train services a week, directly to the Port of Melbourne.

They say that would more than halve the 16,000 to 19,200 truck trips, currently running to the Port of Melbourne from the north west.

Ouyen Intermodal consultant Michael O'Callaghan said extensive analysis had been done on the project.

"Even with the completion of the proposed Murray Basin Rail Project there are still huge gaps within the rail freight market," Mr O'Callaghan said.

Mr O'Sullivan said 80 per cent of freight from the north-west still went by road; that figure would not improve, without an intermodal at Ouyen.

There was no intention to compete with the Merbein intermodal, run by Seaway.

"If we get half of that freight on rail, that's a great outcome and we don't need to go anywhere near the Merbein customers."

Ouyen Inc was on the point of signing a heads-of-agreement with a major intermodal operator, who would manage the container park and provide "lift on-lift off" equipment and infrastructure.

Mr O'Callaghan said it was intended the intermodal would be built on a 77 hectare "greenfield site", with 1.2 kilometres of rail sidings. It was hoped to start construction in December, 2021.

"'Our selected site will allow a short road haul from warehouse or farm to a rail terminal, where trains can get up and back in a day (to the Port of Melbourne), unloading and reloading at both ends and refuelling on a consistent basis," Mr O'Callaghan said.

"This is considered the 'holy grail' of running freight trains into north West Victoria' said Mr O'Callaghan.

Ouyen Inc had engaged GHD Advisory to undertake the business case, commenced the 'shovel ready' stage, undertaken a successful 'expressions of interest' process for an anchor tenant and done analysis on the burgeoning mineral sand and rare earth mining industry.

The intermodal would receive hay, grapes, wine, almonds, wheat, citrus, barley and vegetables produced in north west Victoria, to be exported through the Port of Melbourne.

The preliminary analysis on the economic injection indicated a conservative estimate of $10.2m, in jobs, better returns to growers and local logistics providers.

But Mr O'Callaghan said he was disappointed at the lack of support from the Victorian government.

Mr O'Callaghan said in February 2018, then Public Transport minister Jacinta Allan gave an undertaking to parliament.

'We will continue to work with Ouyen Inc. and other stakeholders, including the freight industry, in this local area so we can capitalise on the benefits that we know that the Murray Basin rail freight project will deliver for communities like Ouyen,"' Ms Allan told parliament..

Mr O'Callaghan said he understood the government was busy with the COVID-19 pandemic, but requested Ms Allan and Ports Minister Mellissa Horne took the time to work with Ouyen Inc, to help deliver the intermodal.

'We were declined for funding for a business case, but we need the Victorian government to stand up and have a look at it," Mr O'Callaghan said.

He said the government removed two important rail sidings away from Ouyen, without consultation, taking away the opportunity for the committee to further advance the project.

Following Murray Basin Rail Project works, when the Mildura line was converted to standard gauge, the Ouyen yard was reduced to two through roads and a single dead end siding.

"Even if the Murray Basin Rail Project were to be completed as initially planned, it will result in a net reduction in the rail freight opportunities at Ouyen," Mr O'Callaghan said.

"This is a direct contravention to the MBRP business case.

"We request that the MBRP not ever be considered complete without addressing this matter."

Ouyen Inc wanted the "wrong" of the siding removal to be fixed, as part of completing the MBRP.

"We want them to acknowledge and rectify that, as part of completing the Murray Basin Rail Project."

He said at a 2018 stakeholder meeting, the Department of Transport said an intermodal required a minium of 8000 TEU's a year to be viable.

"At the meeting there was support for 16,000 TEU and this is reflected in their follow up report," Mr O'Callaghan said.

"Volume numbers have increased since and we have advised the department we are looking at 25,000 TEU's a year, with the potential to go to 30,000.

"So they already know that necessary elements are in place for it to be commercially sustainable."

Port of Melbourne chief executive Brendan Bourke said the company was committed to expanding its rail facilities.

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"We are pressing on with our Port Rail Transformation Project, and welcome new interest from regional south east Australia," Mr Bourke said.

"The proposed facility in Ouyen, signals confidence that the industry is ready to move more freight on rail.

"We stand ready to accommodate increased freight from the regions now, and future port rail shuttles from metropolitan and regional intermodal terminals."

Ouyen Inc chairman Scott Anderson said with the right ownership structure and operators in place the organisation was confident of getting big freight volumes onto rail.

"We don't want to compete against the road transport industry in north west Victoria, but instead work with them," Mr Anderson said.

"They are struggling to get drivers, their costs are going up, but at the same time they have already made considerably large investments in establishing export warehouses and coolrooms which we don't have to duplicate at Ouyen."

Working with the trucking companies and not as a competitor, was one of several 'major points of difference', the Ouyen Intermodal was positioning for, in the intermodal rail freight market in north west Victoria.

"If you cannot get an intermodal train up and back in 24 hours, even in you are one hour over, you default to 48 hour or two day train service," Mr Anderson said.

"That only allows three train trips per week.

"Imagine saying to a trucking company that it could only do three trips a week instead of five or more? Trains are no different. "

The location of the Ouyen Intermodal would result in optimum utilisation of capital-intensive locomotives and wagons and bring rail costs down considerably.

A Victorian government spokesman said stage two of the MBRP included the upgrade of the Murrayville to Ouyen freight line, and trains could now operate at 25kilometres and hour in that section.

Works on the 109-kilometre section included conversion of the line from broad gauge to standard gauge, sleeper replacement and track repairs.

"We're aware of ongoing work on establishing an intermodal terminal in Ouyen and we encourage the proponents to continue working on demonstrating the terminal is commercially sustainable," the spokesman said.

"We look forward to further discussions regarding this proposal as the proponents continue to advance it."

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