AN ALTERNATIVE inland rail route through Shepparton was considered but rejected early on because the costs did not stack up.

Federal Department of Infrastructure head Mike Mrdak confirmed this week “considerable work” was done on the benefits of a Shepparton route for the landmark project, as opposed to the $10 billion route chosen which uses the existing track from Melbourne to Albury.

Mr Mrdak said an independent report for the department, by Deloitte, showed building new tracks from Shepparton would have added another $1 billion to the project for limited extra freight.

“It was felt there would be additional freight on the preferred alignment than what would be a relatively marginal, small additional (amount) coming from an alternative route,” he said.

The Deloitte report indicated demand on the Shepparton line would reach 1.757 million tonnes by 2025, while the Albury route would reach demand of 220,000 tonnes in the same period.

Constructing the Shepparton line, however, would cost at least $1 billion.

The Government-appointed inland rail implementation group noted in 2015 that an extra 3.7 million tonnes in freight a year would be needed to justify the spend.

Mr Mrdak noted there may be a business case for Shepparton in the future, with the Federal and Victorian governments working to upgrade the state’s broad-gauge network, which “will provide additional opportunity to link into the national network by Shepparton and other locations”.

The Federal Government is funding inland rail through an $8.4 billion equity investment in the Australian Rail Track Corporation.