The government haven't ever said that they'd build the line.
They want private enterprise to build it.
Pacific National could build it if they thought it would make money. So could Aurizon...
In fact they could go in half each....
They are building the loops at Gosford now.
Would Fassifern to Teralba direct help? The earthworks are already there. I walked that line 42 years ago...
Your best chance for improvements from the State and Federal Governments are small incremental changes that also benefit passenger services. Fassifern to Teralba could save five minutes for Sydney to Newcastle (Wickham?) services and would remove two sharp curves.
Similar changes could be applied around Hawkmount. A third track up Cowan Bank on a straighter alignment could allow faster passenger trains and provide more slots for freight on this slow section.
But Pacific National could build a new line from Fassifern to Dungog direct, up to Pilbara standards, if they wanted to and thought it would make them money.
No government will pay for additional rail infrastructure parallel to existing lines purely for freight. The SSFL was probably justified on improving commuter services to Macarthur and Leppington.
Every commuter is a voter or potential voter. No container or steel coil gets a vote.
Private enterprise isn't going to build the inland rail line without significant government help - just like the case for the Alice Springs to Darwin line. The financials reported in the alignment study make that clear. The financials also made it clear that there was no pressing need to build this line in the near future. By all means plan for it, perhaps even start construction on bits that have local traffic demand, but bringing it forward too early is just going to result (in my opinion) in the existing via Sydney route suffering further underinvestment.
In terms of the existing line, note that the concept is typically Fassifern (or Hexham - there are two parts to the project) to Stroud Road. Going to Dungog still leaves you with the dog leg and curvature associated with the transition from the Williams River valley through to the Karuah River valley (to use broad geographic terms) - plus I suspect it would be a longer and more difficult deviation that would cost more to build - spend more for less benefit.
Fassifern to Teralba is an almost inconsequential deviation, that might be worth doing as a separate project, but doesn't solve the issue of line capacity, line curvature and urban amenity associated with the trip into Broadmeadow from the south.
(The first two issues can help the financial case for the Fassifern to Hexham deviation, in my view the latter is more likely to be the "soft" economic issue that helps swing the bigger project, more so than any benefits to interurban services. Without the economic support, the financials looked pretty sad from memory - while it may have saved some time it was going to be expensive given the terrain to be crossed - hence I don't think you will not see Aurizon or PN or whoever stumping up the cash on their own to build that deviation.)
I agree that the smaller deviations are more palatable. You could combine Fassifern to Teralba with an easing of the curve immediately to the south of Fassifern, perhaps bundled up together as a passing lane/refuge style project (since there may be a need for local passenger services to still access Booragul).
One cross against those two smaller projects in particular is that they might become stranded investments if the larger Fassifern to Hexham deviation is built. I can't remember (perhaps because I haven't seen) getting a bottle of red wine vinegar, I mean... seeing where that proposed larger deviation heads off - it may depend a bit on what Centennial are doing (or have done historically, in terms of subsidence) with their deposits in the area.
Significant investment by "government" (via ARTC) has recently happened in the Hunter parallel to existing lines without there being any real benefit to the handful of passenger services that use the line. This investment happens because the customers are willing to pay for the increase in line capacity that the investment unlocks. While the business case for the SSFL was probably not as strong, I would also expect it to have been carried by freight capacity and reliability increases, rather than passenger capacity benefits (perhaps you could turn things around - given passenger requirements there was insufficient capacity for freight).
Referring to posts in other threads about the inland rail project - there's not much point building incremental additions to massively more capable standards if the network that it is connected to doesn't have the capability for the higher axle loads and is unlikely to ever have the capability, due to the cost associated with upgrading the existing network and an absence of a likely heavy haul customer. In the case of Fassifern to Stroud Road it may make sense to design to a higher capability because that deviation is connected to the Newcastle heavy haul network and there are likely (existing, even) customers not far from each end of the deviation that would benefit from the higher standards and hence might be willing to pay for the upgrade of the existing track.
Similarly, the previous study explicitly looked at going via Shepparton. It didn't stack up. That analysis obviously depends on the underlying assumptions used, and they can (and should) be challenged, but I rather a decision for that scale of investment was made based on a transparent argument than "we reckon it will be much better". Besides which, there's nothing stopping a via Shepparton route being built as a second (or third or fourth, given the way things are likely to play out) stage - you might have wasted a bit of money on the Cootamundra bypass (assuming it had been built by that stage), but that would be pretty small bikkies compared to the work required to go via Shepparton.
Anyway, I've stuck my neck out - swing away.