Victoria's regional rail service is relying on trains up to 60 years old and has a $534.8 million maintenance backlog.
The state's Auditor-General has found V/Line's system is also plagued by cancellations, delays and overcrowding according to a report tabled in parliament on Wednesday.
Years of inadequate maintenance funding and a lack of attention to customer needs led to the failings over the last decade, the report says.
In 2015 V/Line changed its approach to asset management and identified its maintenance backlog.
"The scale of funding required to address the maintenance backlog is significant - approximately $534.8 million across the entire V/Line network," the report reads.
A stocktake in July 2016, found about $53 million worth of the fleet needed to be replaced as an "immediate priority".
And apart from the new VLocity trains, some of V/Line's classic fleet of trains have been in use for double their 30-year design life.
The 'P Class Locomotive' has been in use for 60 years and 'Z Cars' have been used for 56.
The report makes eight recommendations to V/Line and Public Transport Victoria, including better monitoring of service performance and reviewing transport governance.
Public Transport Minister Jacinta Allan said the government was investing $600 million into V/Line maintenance and operations.
"We've added nearly 600 new services, and are getting on with the Regional Rail Revival, which will improve every regional passenger line in the state - allowing more trains, more often, across regional Victoria," she said.
V/Line Chief Executive James Pinder said the past decade has been challenging but the service is improving.
"We are experiencing record patronage growth on the V/Line network and the Victorian Government's order of 87 new VLocity carriages over the past two years will help us keep pace with this growth," he said.
