V/Line passenger is to be privatised. The South Gippsland line is leased
to the South Gippsland Railway and is currently used as a tourist railway.
The lease does not preclude SGR from running any particular type of
service, but other legislation prevents anyone running in competition with
the current bus contract. There are no specific proposals yet, but
Cranbourne to Nyora needs a fair bit of work to being it up to scratch
again. The line speed has dropped from 95km/h to 50km/h since passenger
services were withdrawn.
AFAIK, two groups have expressed an interest in the East Gippsland line.
Both include Sale to Bairnsdale in their proposals.
Cheers
David