A $1.2 BILLION promise of 300 “next generation” railcars to improve Perth’s train system is set to be shelved.

Several senior sources told The Sunday Times this week the Barnett Government was scrambling to distance itself from the major Budget pledge made just five months ago.

Fifty six-car sets were meant to be delivered over 10 years from 2019.

The Government says these “C-Series” railcars would have a “larger capacity for patrons” and be “state-of-the-art”.

The Public Transport Authority was given $5 million to plan for the railcars during the 2015-16 financial year.

But The Sunday Times understands Treasury boffins want to put on the brakes.

“It’s being driven by Treasurer Mike Nahan, with input from Transport Minister Dean Nalder,” a source said.

Another insider said times were so tough Treasury officials were even pushing for the Barnett Government to force commuters to pay more to board during peak times.

In 2014-15, fare revenue across the public transport system, including rail, buses and ferries, rose just 0.2 per cent.

This compared with 2 per cent, 10.2 per cent and 13 per cent in previous years.

The PTA recently blamed a decline in “fare-paying” customers on increased unemployment, a slowing population growth rate, “cost of living pressures impact largely on discretionary travel” and low fuel prices “making driving more attractive”.

PTA spokeswoman Claire Krol said the $5 million to plan for the C-Series railcars was being used on “planning and procurement activities”.

She said there was still no “release date” for “final request for tenders”.

“The PTA initially conducted market engagement with the railcar supplier industry late last year to assess whether there were manufacturers interested in supplying the PTA with a potential future order,” she said.

“There were several respondents to this process. In order to assess their suitability, a tender pre-qualification process was undertaken.

The railcar manufacturers have responded and those bids are being evaluated by PTA and a cross-government project group.”

A spokeswoman for Mr Nalder said the Minister had “nothing to add”.