MILDURA rail carrier Wakefields Transport has had a freight subsidy reprieve from the Victorian Government.
Containerised freight services are subsidised, under the Rail Freight Support Package, to encourage growth in rail operations.
But the package is capped to a limited number of containers. The total varies according to individual operators.
Wakefields Transport manager Ken Wakefield said his company's subsidy was capped at 7800 TEUs (20-foot equivalent units).
He told the Government in November that the company would hit the cap this month.
Last week, rail officials told him the cap would be extended by 3000 TEUs.
"It's a significant increase on my volume and I am grateful to the Government," he said. "But it also shows that static caps don't encourage growth in rail freight."
The support package is to expire at the end of June. Rail operators and the Alliance of Councils for Rail Freight Development have been lobbying the Government to extend it or introduce a new program.
The Grain Logistics Taskforce, set up by the Government to look at freight movements to port, acknowledged that losing the program would be "highly likely" to shift significant volumes of containerised grain to roads. But the taskforce made no recommendation on the scheme's continuance or replacement.
Mr Wakefield said the Government had to extend the program or find other ways to make rail competitive with road transport if it was serious about moving freight on to rail.