Melbourne's passenger rail system is a near $30 billion asset, owned by the public and run by two companies, Metro Trains and Yarra Trams, which transport hundreds of millions of people a year.

And yet nobody who oversees the train and tram system can say for sure what physical condition it is in, nor whether it is fit to cope with expected increases in demand in coming years.

On station skipping, PTV relies on a system of "honest and accurate self-reporting" by Metro Trains. Credit:Craig Abraham

Such is the troubling finding of Victoria's auditor-general, in an alarm call of a report about how well the state is managing the performance of the train and tram franchise agreements, two multibillion-dollar deals that set the standards Metro and Yarra Trams must meet.

The report found that there are significant gaps in how Public Transport Victoria monitors whether Metro and Yarra Trams are meeting the conditions of their franchise agreements, and whether they are truly running services in the best interests of passengers.