Second western freight hub shelved in six months

The Victorian government has defended the state's logistics capacity after a freight giant scrapped plans for a new rail terminal.

Pacific National ditched a proposal to build a $5 billion, 550 hectare logistics hub at the Little River site on the western edge of Melbourne.

The cancellation came less than six months after a state government-backed western freight hub was shelved in favour of a Commonwealth-preferred project north of the city.

Announcing an extra lane for a West Gate Freeway entry ramp, Transport Infrastructure Minister Danny Pearson said his government was still getting trucks off local roads.

"We have always had a preference that a terminal be built in the western suburbs, but we do know the Commonwealth has a preference for Beveridge," Mr Pearson told reporters.

The federal government announced $750 million in funding for the Beveridge Intermodal Precinct in May, which is still subject to planning approvals.

Mr Pearson said the scuppered Little River project was a matter for Pacific National, but he was confident in the state's logistical muscle.

"We think that there's sufficient capacity in the network already in relation to freight," he said.

Local community groups and environmentalists had opposed the Little River hub, which they said threatened native grasslands and wildlife.

Pacific National this week announced it would cease all environmental and planning processes related to the site.

"Pacific National has made this decision given the changed timelines for associated freight and infrastructure projects and economic factors which have impacted on the project business case," it said in a statement.

"Pacific National will continue to consider potential alternative terminal site options as they emerge to support efficient freight transport connectivity."

Little River Action Group president Adrian Hamilton was delighted with the decision.

"The site has a rich ecosystem that is worth protecting," he said in a statement.

"It must remain a green wedge and it abuts our small, peaceful town."

Little River has a population of 1400, but the action group secured more than 5000 signatures opposing the terminal at the site before a protest in August.

"It would have been a tragedy for Victoria to lose more stands of remnant native vegetation. Natural temperate grasslands are under serious threat," Mr Hamilton said.