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Deputy Prime Minister Michael McCormack joined local MPs on Thursday morning at Maroochydore to trumpet the funding as a "fantastic project not only for Queensland but for the nation."
"This is a great project because it's going to create 600 jobs in the construction," Mr McCormack said.
Glasshouse MP Andrew Powell said the improved rail line would deliver 150 extra weekly services and cut travel times.
"The 40-kilometre rail line between Beerburrum and Nambour is more than a century old, which limits rail services and causes considerable delays for the Sunshine Coast's 330,000 residents," he said.
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The Sunshine Coast has been demanding a rail upgrade since 2011, with Rail Back On Track campaigner Jeff Addison raising the issue with LNP Member for Fairfax Alex Somlyay.
Mr Addison tweeted early Thursday morning, saying: "After eight years of active campaigning, our time has come. Let's do this."
But the project is far from on track, and Queensland Deputy Premier Jackie Trad said she was disappointed the Federal Government was only prepared to stump up 50 per cent of the funding, despite it being what she called "a nationally significant piece of infrastructure".
With the State Government so far refusing to support the Federal proposal to pay half, the rail project faces a $234 million funding shortfall.
Contributing "fair share"Ms Trad said her government was funding Brisbane's Cross River Rail project without federal support and so has asked the Federal Government to put up 80 per cent of the money for the Beerburrum to Nambour expansion.
"We need the Turnbull Government to contribute their fair share on this nation-building project," she said.
Ms Trad did not rule out the State putting in more funding but said they would wait to see "the actual details of the announcement" when the Federal Budget comes down on Tuesday.
Queensland Opposition Leader Deb Frecklington has joined Federal calls for Queensland to back the project or doom the Sunshine Coast to what she said would be a continuing "transport nightmare".
"There is no longer any excuse for Annastacia Palaszczuk and Labor not to stump up their share," Ms Frecklington said.
"She needs to get on board and fund this rail line in next month's state budget."
This article first appeared on www.abc.net.au
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