It might be useful to read the IA assessment to get more detail.http://infrastructureaustralia.gov.au/projects/files/Maldon-to-Dombarton-summary.pdf
Key items here are that:
1. The BCR is less than 1, so not generating net economic benefits
2. Coal traffic might be overstated given that mines in the area are probably going to close within 20 years instead of produce for the next 50
3. Changes to the Sydney metro network (e.g. metro to Hurstville) are not announced/committed (and are probably the opposite to be honest) and so further reduce the justification for the line.
Plus, NSW was asking the Federal government for all of the funding, and modelling shows that financial revenues (i.e. access charges) won't be enough to recover total costs. Again, the project has lots of economic benefits that are not monetised through its use. These include freight user benefits (approx $377m) which could be argued are somewhat of a subsidy to rail users.
My advice to the relevant people in the area - go back to the drawing board and see what else could be more economically positive for rail in the region. How about taking that request almost $1bn and turn it into another request, this time asking for improvements to the current Illawarra line to improve passenger times? $1bn might get you substantially greater benefits if invested in different ways.