A plan to take 3500 trucks a day off Melbourne's roads is on hold while the sale of the city's port is debated.
Salta Properties put a plan to the previous government to get 1.4 million shipping containers a year off the roads and on to trains.
But the project stalled at the expressions-of-interest stage after the November 2014 election.
"Quite frankly we don't understand what the barrier to this project is," Salta managing director Sam Tarascio told a parliamentary inquiry into the port sale on Wednesday.
The Salta proposal - which has been in motion for 12 years - would see shipping containers sent to intermodal transport centres in Altona, Somerton and Dandenong South on Melbourne's urban fringe.
Mr Tarascio said the $58 million project would increase the capacity of the port by 1.4 million containers a year.
Treasurer Tim Pallas blamed the former state government for not going ahead with the project.
"The decision to not proceed with Salta's proposal for a port rail shuttle was made under the previous government and is yet another major infrastructure project that the previous Liberal government failed to deliver and now pretends to care about," he said.
Under the government's plan to lease the port, bidders will have to pursue a rail transport plan as agreed with the state.
The government plans to lease Melbourne's port for 50 years, with an option to extend it to 70.
The new owners will get compensation if a second Melbourne port starts operations before the first port has reached an agreed capacity limit.
The government plans to raise about $6 billion from the lease's sale to pay for suburban level crossing removals.
The Greens oppose the sale but agreed to a coalition bid to hold an inquiry to examine it.
Earlier, Australian Peak Shippers Association executive president Robert Coode said privatisation of the port could lead to excessive rent increases and price gouging of shipping companies.
Higher costs would have to be passed on to producers, cutting into margins for exported beef, grain and dairy products, he said.
"If the price of rent is increased, a solution may be to reduce the amount of produce they are exporting and this could have a marked effect on economies of regional towns," Mr Coode said.
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