Transport for NSW is in crisis.

The Federal Government is blaming the state for a $40-million shortfall in its transport budget.

Photo: Supplied It’s a situation the Opposition is using to paint Transport for Northern Territory (TfN) as a major financial loser in the fight against a major transport infrastructure deficit, with Opposition Leader James Merlino accusing the federal Government of blaming TfN for the shortfall.

“The state is the biggest single contributor to TfNs transport budget, and we need to see this money coming in, not being lost to the government,” Mr Merlino said.

“I’m afraid the state is blaming Tn on its inability to meet its obligations, and not on its performance.”

If the State Government can’t keep the boats moving, then why should taxpayers foot the bill?

“Transport Minister Michael Garrard said he had no doubt the shortfall was the fault of the state.

The Treasurer said the federal government had been “quite clear” it would not fund the state unless TfNS were to provide the funding it was asking for.

TfNS is not in the position to meet the $80-million annual shortfall and it will continue to have to rely on the Commonwealth to cover its share of the bill. “

It’s a pretty big shortfall,” he said.

TfNS is not in the position to meet the $80-million annual shortfall and it will continue to have to rely on the Commonwealth to cover its share of the bill.

A spokesman for the Federal Transport Minister, Greg Hunt, said Mr Garrard had been in direct contact with Tfns management and was “clear” they were in financial difficulty.

He said the state’s position had been that it could meet its funding obligations through other means, including direct payments from the Commonwealth.

Federal Transport Minister Greg Hunt says the state will continue paying for its share until a new deal is agreed.

However, Mr Hunt said the State’s financial situation was now under review and that Tf had made good progress.

Asked if Mr Hunt was confident Tf would meet its $80 billion shortfall, Mr Garrards answer was “absolutely”.

“I don’t think so, I’m very confident about it,” he told Parliament.

In a statement to Parliament, Tf chief executive officer Simon Woodman said he was “very pleased” with progress in the ongoing negotiations with the Government, and said the agency was “optimistic” about its future.

As well as the state, the Government has committed $30 million to Tn, and the Federal Opposition has called for $60 million in direct funding to help pay for the new $20 million regional rail network.

Labor says the State should have a $15 billion rail funding fund.

Opposition transport spokeswoman for NSW, Vicki Baker, said the Federal government was refusing to negotiate with Tn.

“[We need] the Federal Treasury to put a stop to that, because that’s what’s happening, they are just refusing to do that,” she said.

“The Government is in no position to fund Tn’s transport, and it’s not in their financial interests to do so.”

“We’ve had a major problem with the State being a financial loser to Ttns,” she added.

Last month, Mr Merlinos team said Tf’s annual budget shortfall was $2.6 billion and its share had increased to more than $10 billion.

Treasurer Scott Morrison said the $40 billion in direct and indirect funding the state received in the 2016-17 budget had been a “bargain”.

“This year, we’ve managed to reduce the State budget deficit by $3.3 billion, and as part of our ongoing work to make sure the Government gets the best bang for its buck, we’re also increasing the State funding pool by $4.2 billion,” Mr Morrison said.