A bullet train between Melbourne and Geelong will become a step closer to reality next week with the creation of a dedicated agency to kickstart the radical plan.

The Victorian government has begun discussions with the Commonwealth about how to deliver the project, which would slash travel times between the CBD and state’s second biggest city to just 32 minutes.

But it is believed Victoria is still some way from matching Prime Minister Scott Morrison’s $2 billion commitment, arguing the total bill could be as much as $15 billion.

The federal government has not ruled out upping its election-eve commitment, but is maintaining the project can be built for around $4 billion by linking the project to the Melbourne Airport Rail Link.

Urban Infrastructure Minister Alan Tudge wants the Victorian government to match the Commonwealth’s $2 billion commitment. Picture: AAP Image/Mick TsikasA new body, the National Faster Rail Agency, will be established from next week to begin planning fast rail projects across the country, including lines from Melbourne to Shepparton, Albury and Traralgon.

The new agency, which was given $14.5 million in the federal Budget, will be led by an expert panel to be appointed over coming weeks.

It would take at least a decade to build the fast rail line to Geelong, as the Airport Rail Link must be completed first so the line can use the connection between Southern Cross and Sunshine stations.

Federal Urban Infrastructure Minister Alan Tudge said he wanted fast rail projects in Victoria, NSW and Queensland up and running over the next two decades.

“Our fast rail plan is part of our plan for Australia’s future population, that will take the pressure off the big capitals and support the growth of the regions,” Mr Tudge said.