The major project allocations include:

• $A 4bn for construction of the North West Rail Link (NWRL)

• $A 782m for the 11.4km South West Rail Link between Glenfield and Leppington, which is due to be completed in 2016

• $A 423m for the new 12km CBD light rail line linking Circular Quay, Sydney Central station the Moore Park sporting and entertainment centre

• $A 885m for enhancements on the Northern Sydney Freight Corridor to improve both freight and passenger capacity north of Sydney towards Newcastle (jointly funded by the Australian and NSW governments), and

• $A 76m for the completion of the Inner West Light Rail Extension, a 5.6km line from Lilyfield to Dulwich Hill which is due to open next year.

The Government has confirmed the NWRL will cost $A 8.3bn including rolling stock and will open by the end of 2019. $A 806m will be spent on this project during the 2013-14 financial year, and the first tunnel boring machines are due to begin tunnelling next year.

According to minister for transport Mrs Gladys Berejiklian, the government originally estimated the project would cost between $A 7.5bn and $A 8.5bn, excluding rolling stock.

In a move that could be seen as a sweetener following the controversial decision last year to remove the heavy rail lines and direct link to Sydney from Newcastle city centre, the government has announced that it will make $A 460m available for a light rail link between the new station at Wickham and Newcastle city centre, originally proposed as a bus connection.

Part of the funding ($A 340m) is dependent upon a proposal by the state government to sell off a long-term lease on the port of Newcastle, which is expected to raise $A 700m. The port currently receives around 130 million tonnes of export coal per year by rail.

"The proposed new light rail option between Wickham and Newcastle is potentially only the beginning of a light rail network for Newcastle," says NSW state treasurer Mr Mike Baird.

$A 10m will be allocated to study the potential for this link as the basis for a wider LRT network linking with surrounding suburbs and the broader Hunter Valley region.

Other investment in the budget includes commitments in the order of $A 177m for the country regional network, of which $48m has been allocated for work on marginal grain lines.