An $18 billion backlog in road and rail projects needed to service Melbourne's housing boom could turn the outer suburbs into isolated ghettos unless a better way is found to turn long-term plans into reality, the state's Auditor-General warns.


In a new report on transport infrastructure in Melbourne's outer growth areas, Auditor-General John Doyle criticised multiple state governments and departments for their long-term failure to produce coherent transport plans to service the city's population growth.


"Over many years, the state has failed to deliver the transport infrastructure and services needed to support rapidly growing communities. This is adversely impacting accessibility, and risks the future liveability of metropolitan Melbourne," Mr Doyle wrote in a report tabled in Parliament on Wednesday.


"Urgent action is required to address this serious problem. Inadequate public transport and growing gaps in the road network in these communities are creating barriers to mobility, including access to critical services, education and employment opportunities."


Car dependence in the outer suburbs was on the rise, increasing pollution and traffic congestion at significant community cost. This limited state productivity and the time people could spend with their families, Mr Doyle wrote.


Opposition Leader Daniel Andrews said the report confirmed that urgent public transport and road projects had been put on hold while the Coalition pushed ahead with the $8 billion east-west link.


"If you put all your eggs in one basket, and it's the wrong basket – a dud tunnel costing $8 billion – you consign lots of worthy projects, road, rail and other transport projects in Melbourne's suburbs to the backburner for decades," Mr Andrews said.


Roads and Transport Minister Terry Mulder said the Napthine government had "inherited a massive backlog" of road and rail projects for the outer suburbs and could not deliver them all in one term, but it had a plan.


"If you have a look at our commitment last budget, $6.1 billion worth of infrastructure investment by the Napthine government, we are aware of the challenges," Mr Mulder said.


"We are not going to get into a position as the Leader of the Opposition is now in, by acknowledging in 11 years of government, the former Labor government failed to plan for growth and failed to meet the challenges of growth."


The report also hinted at the threat of federal funding for passenger rail projects evaporating if the Coalition were to win power on September 7. Federal Opposition Leader Tony Abbott has said his government would not fund passenger rail projects if elected, but has committed to several road projects.


"Increasingly limited state finances and ongoing uncertainty over Commonwealth contributions, particularly for rail projects, means there is a pressing need for the state to explore alternative funding options and strategies to address the growing transport infrastructure backlog and needs of growth areas," Mr Doyle wrote.


Value capture – a levy or differential rate imposed on properties that will benefit from new transport infrastructure – has worked overseas and should be explored here, he said.


He recommended the government consider private partnerships to develop land above or beside railway stations, charge differential rates for properties near transit routes and apply a property rate within the CBD where extra rail capacity was needed, as was used to partly fund the City Loop.


The report identified $6.2 billion in outstanding rail projects for the outer suburbs and $4.1-$5.1 billion in road projects. Annual funding of $197 million was also needed to improve bus services, the report said.


"If this funding challenge is not addressed, the current situation is likely to worsen as new growth areas come online."


The report identified several long-standing transport projects for Melbourne that have languished at the planning stage because of a lack of funding. At the extreme end is the Doncaster rail project, first identified in 1929 and now due for completion in 2027, according to Public Transport Victoria's rail plan – a gap of 98 years.


"The time taken to fund rail services to growth areas from first identifying the need is usually excessive – in most cases it exceeds 30 years, more than a generation," the report said.


VicRoads estimated more than $1 billion was urgently needed to improve roads in the outer eastern municipality of Casey alone. This funding shortfall did not include future plans for growth in the municipality. Casey's population is forecast to grow from 261,000 today to 404,000 by 2031.


Other outer urban municipalities that are affected by a lack of good transport links include Cardinia, Hume, Melton, Whittlesea and Wyndham.


"There is a widening disparity between inner and outer suburbs of Melbourne in terms of available transport options," the report said. "While recent improvements in planning for greenfields have the potential to mitigate this disparity, there is little evidence that state agencies have fully analysed and documented when and how all the transport infrastructure and services needed in growth area councils should be delivered."


with Henrietta Cook