If the Government goes ahead, it will have to spend billions on new trains over several decades. Extrapolated from the net present value of the current order for double-deck trains, the replacement of the 1600 carriages servicing the CityRail network would cost $9.2 billion. If the cost of finance is included, this blows out to $24.3 billion.

"There is a long-term strategic direction to start investing in single-deck rolling stock," Mr Campbell said. The plan would "assist in moving more people across the network faster by reducing dwell time [the time a train spends in each station], address capacity constraints and improve service levels on the RailCorp network." While NSW plans to switch to single-deck trains, in Switzerland, Germany, the Netherlands, Belgium and France suburban rail networks are being converted to double-deck trains. In Sydney, single-deck trains are synonymous with the notorious "red rattler", the noisy carriages that began to be phased out in the 1960s.

The plan surfaced in the same week the Government slashed $13 billion worth of new railways to the north-west and south-west of Sydney. It raises questions about how vital freight, inter-urban and XPT trains would squeeze into the network. The policy reversal has been motivated by the same advice that prompted the proposal of the seven-kilometre, $4.8 billion CBD Metro as an achievable first step in introducing a modern subway system to Sydney.

Using the same rationale, all western line services would be converted to single-deck trains that would terminate at Central. Commuters would then switch to the new metro line at its terminus to reach northern parts of the city centre, including Martin Place. The NSW Treasury is working on an estimated cost of $2 billion to convert just the western line from Parramatta to Central. But the mini-budget revealed plans to take this strategy much further, in a decision at odds with the existing order for double-deck rail carriages expected to be delivered from 2010.

The strategy also runs counter to another budget announcement, the $370 million purchase of at least eight outer suburban trains, which are double-deckers. Single-deck trains are favoured because they are quicker to load passengers and would need to spend less time in stations.

While this is true of the main city centre stations, signalling systems govern the distance between trains, and hence their frequency. The mini-budget papers described the new strategy as a "low cost" way to improve service levels "based on gradual conversion of network operations to higher-frequency single-deck rolling stock". Rail experts told the Herald the signalling work alone would cost $5 billion. There are also questions about who would do the work. The Rail Clearways program has been hampered by a chronic shortage of skilled staff.

The Auditor-General says RailCorp needs 16 specialist signal engineers to complete current work, but it has only three permanent signal engineers on its books.