The most unreliable train service in Victoria was allocated an extra $40 million on top of the $100 million committed in this year’s federal budget.

But despite the ongoing problems, the line could not attract the same level of funding as the $555.6 million to go to upgrading the Ballarat line, from the total $1.52 billion project.

Mr Andrews reaffirmed there would be more state-funded investment in trains, but could not give a timeframe.

“I’ve always said we stand ready to provide the rolling stock if we can get a proper partnership with Canberra to upgrade the line and this $140 million is a really big step towards that,” he said.

“This $140 million is exactly what’s needed.

“We’ve put some new services in, we can do more though when we get the track work done and we will stand ready to make any rolling stock investment when we need to do that.”

Euroa MLA Steph Ms Ryan said Mr Andrews was fast running out of excuses to invest in new trains for the line.

“The Andrews Government has been dragged kicking and screaming into quarantining this much money for North East Victoria,” she said. 

“Daniel Andrews stood in Wangaratta and promised that if the Commonwealth government invested in fixing the line, he would invest in new rolling stock.”

Senator Bridget McKenzie said as part of the agreement, the federal government asked for a commitment from Victoria to support the inland rail project by signing a national partnership agreement, which would settle any arrangements regarding the future maintenance of the North East rail line.

Northern Victoria MLC Jaclyn Symes said the $140 million to be spent on track, signalling and station improvements would pave the way for better services and a next generation of trains.

“These upgrades to the Seymour, Shepparton and North East lines are critical, so we can provide better services for passengers and plan for more efficient operation of rail freight in the future,” she said.

Questions remain over whether the federal government funding will cover the entire cost of fixing the troubled North East track.

Public Transport Minister Jacinta Allan told The Border Mail in May “we don't believe that $100 million will be enough to fix the longstanding issues on the Albury Line”.

Her comments came after Infrastructure Department secretary Mike Mrdak did not deny a suggestion in Senate estimates that repairing the North East line would cost “considerably upwards” of the $134 million already spent on the ballast rehabilitation program.

He also revealed the federal government was “seeking a Victorian government contribution, with the level of that contribution still to be negotiated”.

A spokesman for Mr Andrews’ said the cost was a federal issue, which would be looked during planning.

Indi MP Cathy McGowan said the federal government agreed to her request for a cross-government working party to decide how the $140 million will be spent.

She welcomed the funding announcement and said it indicated the federal and state governments were moving closer to fixing the North East rail line.

Mr Andrews also contacted Ms McGowan this week, saying the renegotiation of the Australian Rail Track Corporation contract with the state government would focus on setting clear service outcomes.

“This includes resolving issues with the track and new key performance indicators,” she said.

“It is vital that the ARTC’s contract reflects the needs of North East rail passengers, who deserve a much better service than they are currently receiving.”

Senator Bridget McKenzie said the rail investment would deliver more reliable services.

“This is great news for people throughout the Indi electorate and a great boost to Wodonga residents who have suffered with an inadequate rail service for years,” she said.

“Our upgrades, in addition to the state government’s proposed new next-generation long distance regional trains, will fix the problem.”