Someone made a posting to this forum earlier this year commenting on an email they had received from the DOI, stating that work was about to be carried out on the Leongatha line. So I decided to ask them about the projects' status myself. Here is the reply I received just minutes ago:
Thank you for your email enquiry that was received on 15/12/2006 regarding the return of train services to Leongatha.
The Bracks Government allocated $3 million in the 2005/06 State Budget to undertake detailed planning and design work over a period of two years to the middle of 2007. Information on the type and timing of services to be provided, and the associated scope of investment, will only be available when this work is completed in 2007.
I have replied asking why there was no mention of the project in the 2006 transport statement. I'm assuming it's because the study had not yet been completed.
Anyhow, it seems there will be no further comment for another several months, so I guess we just need to hold our breaths and wait what comes of it next year.