Contrary to media reports last week, WA Treasurer Mike Nahan says stage 2 of the $1.6 billion Perth Freight Link project has not been put on the shelf.

Mr Nahan says stage 2 has just been delayed, though he has conceded that $925 million in Commonwealth funding will have to be renegotiated.

Premier Colin Barnett announced last week that the planned time frame for deciding on a route and distributing contracts had been ditched.

He indicated that any decision on stage two could be several years away.

The reports prompted strong criticism from transporters and the Federal Government, which had put up $925 million for the project to link Roe Highway to the Freemantle port.

But Dr Nahan insists the full project will go ahead.

“It hasn't been shelved. It is a staged process and the Premier honestly said given all that we're doing, and Roe 8, it's unlikely that we get it done before the election given that the election will be only a year off,” he said this week.

The Government says it is sticking to its commitment to build the Roe 8 extension from Kwinana Freeway to Stock Road.

That means it will still face backlash from residents in Palmyra when the second stage to link Roe 8 to the port brings about the demolition of family homes.

As public criticism increases, WA Transport Minister Dean Nalder says he has commissioned the investigation of other options, including a tunnel.

Dr Nahan said that is part of what is pushing the project back.

“We knew when we announced the Perth Freight Link there was a large amount of work to do sequentially,” he said.

“One of the major issues has been the route, and the manner of the route, that is a tunnel versus a road, has altered the picture quite substantially.”

Both the Federal Cities Minister and the Federal Finance Minister say the Commonwealth would prefer to see the entire project completed as first agreed, but Dr Nahan says the deal will have to be renegotiated.

“I and the Premier and the Transport Minister will have discussions with the various parties in the Commonwealth over the next few weeks,” he said,

“They need clarity, the Commonwealth and we will give them clarity.”

Transport Minister Dean Nalder rejected suggestions that the Premier’s big delay had damaged the Government’s relationship with the heavy transport industry.

“I wouldn't say its gone South,” Mr Nalder said.

“We need to sit down with them. We've kept them engaged all the way through this process, so we've been working with them for well over a year in a lot of more detail than is publicly known.”

The WA Road Transport Association wants the Federal Government step in and make sure the Perth Freight Link is completed in its entirety.

The transporters say they will withdraw their support for a toll if the Government goes ahead with plan to place a toll on Roe 8 alone, and does not build a link to Fremantle Port.

“They're things we need to work through. There are some challenges there. There is a lot of the benefit from getting it through to Stirling Highway. We're aware of that,” Dr Nahan said.

“We now need to work with industry. There are further things I now need to discuss with the Premier.”