A new freight rail connection in Dandenong South will remove 100,000 trucks of Melbourne’s roads a year.

The new rail line will connect the Salta Properties freight hub in Dandenong South with the Melbourne suburban rail network, allowing shuttle trains to run between the Port of Melbourne and Melbourne’s southeast.

The $28 million project is funded by the federal and state governments, with each contributing $18.3m and $9.7m respectively.

The project will be completed by the Level Crossing Removal Authority as part of the Cranbourne Line upgrade.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the connection would form part of a wider network of freight rail connecting the Port of Melbourne with intermodal facilities.

“The new spur line will connect the intermodal freight terminal at Dandenong South to the Cranbourne Line. As part of the Port Rail Shuttle Network it will help cut the number of trucks on inner Melbourne roads by up to 100,000 each year and support hundreds of jobs during construction and as part of the terminals ongoing operations.”

Victorian Minister for Ports and Freight Melissa Horne said the project would make freight more competitive.

“We’re making rail freight a more attractive option for businesses, and this investment means containers can be transported by rail the entire way from the Port of Melbourne to Dandenong South,” she said.

“It will reduce congestion at the port gate and cut the high cost of the last mile that so often disadvantages containers moved by rail.”

The Port of Melbourne has recently made major investments to improve the capacity of rail to handle cargo. The port authority is investing $125m in on-dock rail, to enable freight to be taken directly from ship to rail and to intermodal terminals such as these.

The Victorian government has also invested in two other port rail shuttles, one to Altona and another to Somerton, with further funding to be announced.