Developer Salta Properties is proposing to build a railway freight terminal that would allow trains to replace freight trucks delivering containers from the Port of Melbourne to the south-eastern suburbs.

The 187-hectare site for the mooted project is in paddocks next to the former Lyndhurst railway station.

The plan has been backed by industry leaders seeking alternatives to the 1000-plus freight vehicles clogging south-eastern roads during each morning peak period.

The plan has not yet been submitted to Greater Dandenong Council.

On its website, Salta claims the plan would significantly reduce traffic congestion and greenhouse gas emissions.

South East Melbourne Manufacturers Alliance executive officer Paul Dowling said the inland port was needed in conjunction with an upgrade to the Port of Hastings to "get semis off the road".

Greater Dandenong Council's chief executive John Bennie said the "very exciting" proposal was a "job creator" and would reinforce the municipality's manufacturing role.

"We understand it's contingent on a third or fourth railway line to that site."

Triplication of the Dandenong line was State Government policy in 2006 but was omitted from the 2008 Victorian Transport Plan.

Professor Graham Currie, of Monash University's Institute of Transport Studies, said:

"It would need more than just duplicating the line.

"Even if they did that, the trains are overcrowded, about 30per cent beyond their capacity, at peak times."

He also doubted the project would be economically viable, since trucks had the advantage over trains of being able to deliver from the port to any door in Melbourne.

"Railways are efficient at bulk handling of grains and commodities.

"You'll find with most whitegoods or perishables that you've got to get it quicker to producers."

Professor Currie agreed with the need to reduce freight truck numbers, set to double in number in the next 10-15 years. He suggested

one solution would be to charge freight trucks by the kilometre to encourage efficiency.

The RACV's traffic and roads chief engineer, Peter Daly, said a better rail network and a Western Ring Road-Eastern Freeway link were needed to improve freight flows around Melbourne. "We do know freight growth is going to happen. Naturally, demand for goods by road and rail will increase."

Salta executive chairman Sam Tarascio did not return the Journal's calls.