Rail under for untangle the Williamstown junction is yes due to the over bridge which would need to be demolished (in 2010 they upgraded that bridge seems a waste to demolish). The other reason is so it is easier for the rail line to go under the Yarra river if Metro 2 was to be constructed in the future.
This overbridge was built in 1960 to replace a crossing with wooden interlocked gates operated from a signal box that probably also operated the points at the junction. Road flyovers built in areas already built up by that time have been criticised for their effect on the amenity of the area. So demolishing the flyover might improve the amenity of that area, but not if it is replaced by a level crossing.
However, even with the flyover demolished, it would still be easier, it seems, for the railway to go under the river than over.
The RRL project went under review and many changes under both Government. I found the news article that mentions these cut backs made in 2010 by Labor and sign contracts by the Libs in 2011. Cutbacks as follows:
-Flyover at Deerpark
-No removals of crossing on Ballarat line (This is before Libs added two level crossing removals to the project)
-Using existing flyerover at North Mebourne instead building new one
So there were three:
I - So there is conflict between Melbourne bound Geelong line trains and Ballarat line trains in both directions. With grade separated branching
II -I wonder if the money and resources that could have been spent on grade separations on the Ballarat line have instead been spent on other road projects elsewhere.
III -Where would that new one be?