I would like to understand more about why this is the case?
I and some of the posters in this thread have written extensively about this in various NSW threads discussing more a NSW context. But here is a little chart of the operational costs of various transport formats on a per seat basis:
If you accept - as I certainly do - that the government has an obligation to ensure the availability of some sort of public transport service is available to everybody, then in my view a strong economic case can be made that rail should be part of that mix.
The Albury V-Line form factor isn't here - but as a *very* rough guess N those trains probably cost ~$1000/hr to operate and have a capacity of 250 or so, so at 80kph is ~5c/km.
The V'Locity concept is one of Australia's most cost effective PT systems, and it is superior to CountryLink's equivalent because it has more seats per floor space (buffets and checked luggage space are killers) and is faster.
I don't really know if this is the case, but I'd suggest the main reason V-Line don't operate the NE SG lines with V'Locities is there is no SG access to the V'Locity maintenance/servicing facility, and the route just isn't big enough to justify a separate facility, the higher "foreign" maintenance costs or a dual gauge access. Plus perway and traffic considerations mean the V'Locities would probably not retain their FRR speed advantage on the SG anyway.
The reason I mention the cross border agency is that in terms of delivering PT to southern NSW, then an SG V'Locity style service as far north as Wagga would provide not only a superior quality of service, it would be cheaper for gvt to provide than the current offering and (perhaps more importantly) cheaper to provide than the replacing the current offering with busses.
The Sydney to Canberra route has quite a lot of similarities with Albury to Melbourne (and some striking differences too it must be said), and the sorts of investment along the lines trainplanner is suggesting for the Albury-Melbourne would have similar benefits on this route. Plus, there are clear advantages is having a larger common fleet pool of more appropriate vehicles.