The source of $100 million needed for works including signalling upgrades, track work and the addition of a crossing loop remains a point of tension between the state of federal governments.

The state government announced the work as part of its $1.45 billion regional revival package, which relied on federal funds from an asset recycling program linked to the Port of Melbourne lease.

However, the federal government said the money could come from either $460 million infrastructure funding allocated to the state or a long-term $10 billion passenger rail fund in its budget.

Mr Tehan confirmed the passenger rail money would not begin to kick in until the 2019/2020 financial year, whereas the state’s infrastructure funds were available right away.

“There is no way known that they will have everything costed, planned and built by 2018/2019,” he said. “If they’ve got the plans and costings, please send it to us because then I can make sure that it’s first cab off the rank in terms of the money we’ve got allocated for regional and rural rail.”

He urged the state government to work in partnership with his government.

State Transport Minister Jacinta Allan has hit back at Mr Tehan’s claims, saying work could begin in 2018 if the money was there.

“These are desperate excuses from a man who has utterly failed his community,” Ms Allan said. "We could start construction on the Warrnambool line upgrade next year if the Turnbull Government gives us our money.

“This is either a failure of advocacy or a failure of leadership – either Dan Tehan didn't fight hard enough for the people he is supposed to represent, or the Turnbull Government just doesn't care about Warrnambool and the south-west.

Mr Tehan has said the state government failed the community, and urged Ms Allan to leave politics at the door.