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The Rudd government's first budget has delivered $25 million seed funding for two massive projects designed to relieve choke points on Sydney's congested rail and road network.
A feasibility study will look at a new Sydney to Parramatta metro rail line which, if given the green light, will cost up to $10 billion, Premier Morris Iemma says.
He said the federal funding - along with a $20 million state contribution - would also pay for a second feasibility study into the duplication of the city's clogged M5 East Motorway.
Mr Iemma said the budget signalled the commonwealth was "back in the business of big infrastructure", as $41 billion was set aside for infrastructure projects nationally.
"It's the first time in 11 years that the commonwealth government is recognising that it has a role to play in building the nation," Mr Iemma said.
"We're pleased to welcome the first Rudd budget ... the commonwealth government is finally getting back into the business of big infrastructure."
Mr Iemma said if there was a case for transport projects to proceed, then an application for more federal funding would be made as part of federal budget's new $20 billion Building Australia Fund (BAF).
The two feasibility studies will take place over the next six to nine months, costing a total federal-state outlay of $45 million.
The M5 study would probe whether a truck-only tunnel was needed, Mr Iemma said.
He said a new metro line to Parramatta would lead to network-wide benefits for Sydney's existing rail system.
"The western line is one of the heaviest in terms of commuter bottlenecks," Mr Iemma said.
"If you're going to improve the capacity of the rail system ... that's where you get the biggest bang for your buck.
"This money is to seed these projects ... (and) we will start work immediately on the feasibility studies."
The NSW government has previously announced it will build new metro rail link from Sydney's CBD to Rouse Hill, in the city's north-west.
Mr Iemma said plans for additional eastern and southern metro lines remain in consideration.
Opposition Leader Barry O'Farrell said the cash on offer should be spent on real projects, rather than studies which should have already been done.
"This is a state government that apparently hasn't done sufficient studies to ensure these projects proceed," Mr O'Farrell said.
"That's why the federal government now has to come in.
"If this state government had invested in doing the basic work, federal funding should have been available to get them started earlier."
© 2008 AAP
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