Cranbourne to Cranbourne East/Casey Fields is already reserved by VicTrack for the proposed extension of the current suburban line, in which is about 3.5km's from the South Gippsland Highway crossing. Although I'm not a fan of grade separation, this will probably eventuate for most of this line since the amount of road transportation that would be held up for periods of time along the South Gippsland Highway, Cranbourne - Narre Warren Road and Cranbourne - Berwick road would cause vast amounts of congestion in the township. Nyora to Leongatha is as under VicTrack ownership as well, with the local tourist railway still operating trains on most Sundays. Gman_86 alluded already alluded to the situation at Koo Wee Rup so I won't go on about that. However, the South Gippsland Shire have made their intentions clear to the government that they would like them to keep the whole alignment from Cranbourne to Exxon Mobil/Port Anthony Barry Beach clear for future rail purposes with the rail trail using this land in the meantime for local communities along the former railway. Also, I wouldn't suggest that reinstating passenger trains to Leongatha would have a lack of potential patronage as I have researched when I undertook in creating this graphic below.
Also, here's my figures.
Population of Railway Lines
1. Ararat to Ballarat (Distance 89km): Beaufort 1,004, Ararat 7024
Total: 8028 people
2. Bairnsdale to Sale (Distance 69km): Stratford 1,949, Bairnsdale 11,820
Total: 13769 people
3. Cobram to Shepparton (Distance 65km): Numurkah 4,643, Katunga 1,548, Strathmerton 467, Yarroweyah 1,140, Cobram 5,531
Total: 12189 people
4. Dimboola to Ararat (Distance 97km): Stawell 6,035, Horsham 14,285, Murtoa 912, Dimboola 1,662
Total: 22894 people
5. Leongatha to Cranbourne (Distance 82km): Clyde 769, Tooradin 1,359, Koo Wee Rup 3,079, Lang Lang 1,345, Nyora 592, Loch 523, Korumburra 4465, Leongatha 6,860
Total: 18992 people
6. Mildura to Maryborough (Distance 386km): Dunolly 969, St. Arnaud 2,272, Donald 1,697, Birchip 822, Ouyen 1,061, Red Cliffs 4,596, Irymple 5,740, Mildura 30,016
Total: 47173 people
7. Mornington to Baxter (Distance 10km): Moorooduc/Mount Eliza 18,276, Mornington 22,421
Total: 40697 people