A Senate inquiry has unanimously recommended the Federal Government withdraw its majority funding for WA's controversial $1.9 billion Perth Freight Link project in favour of an outer harbour.

Key points: Senate inquiry calls for federal funding to be pulled from Freight Link project

Senate inquiry calls for federal funding to be pulled from Freight Link project Committee says outer harbour a better option

Committee says outer harbour a better option Fremantle harbour at capacity in 10 years, chairman says

The Labor and Greens-dominated Senate Rural and Regional Affairs and Transport References Committee was unanimous in its condemnation of the project.

Unusually, there was no dissenting report or additional comments from the committee's Liberal members.

Committee chairman Labor senator Glenn Sterle said it was clear the project was a "toll road" to nowhere and the $1.2 billion in federal funding should be reinvested elsewhere.

"We should not go ahead with this project," Mr Sterle said. "We should not waste the $1.9 billion of tax payers money."

The committee called on the Turnbull Government to release the full business case for the project, as assessed by Infrastructure Australia, "to provide transparency on the project's proposed economic and social benefits".

The Perth Freight Link project seeks to build a byway for heavy haulage from Perth's industrial eastern suburbs to Fremantle Port, to ease growing congestion problems.

The largely federally funded project has hit a number of hurdles - including strong opposition from environmental groups over Roe 8, phase one of the project, which would see a highway dissect the Beeliar Wetlands.

New outer harbour 'more viable'

The committee's report strongly recommended an alternative in The City of Kwinana's proposal for a privately-funded, land-backed outer harbour at Cockburn Sound serviced by road and rail.

According to the proposal - called the Indian Ocean Gateway - the outer harbour would be built in two stages, serviced by rail and road.

Phase one would start about 400 metres south of the Australian Maritime Complex before then stretching down the coast and finishing just before Alcoa's bauxite refinery.

Stage two would start just on the other side of the refinery before finishing at the BP complex.

Mr Sterle said the committee was informed the Port of Fremantle - the Perth Freight Link's destination - would be at capacity within 10 years.

He said putting the money into an outer harbour was a more viable solution.

"Shipping ports in Kwinana is not new to them, they've been doing this for 40-odd years," he said.

Environmental concerns over outer harbour: Nalder

But the State Government has maintained its support for the Perth Freight Link.

Transport Minister Dean Nalder said the environmental watchdog had also been clear an outer harbour at Cockburn Sound was not viable.

In 1998 and then again in 1996 the Environmental Protection Agency assessed several options for a harbour in the sound and identified serious environmental concerns.

"It acknowledged that it is very difficult to see a situation where there won't be an extremely large adverse impact on Cockburn Sound," he said.

The Minister said it would take years to gain environmental approval for an outer harbour, during which congestion would worsen.

"It's not a quick fix to move to the outer harbour, and it would be inappropriate to do that," Mr Nalder said.

The Government argued there was still 25 years of capacity at Fremantle Port.