The former Victorian Railways, the state railway authority in Victoria, Australia, built a number of experimental 2 ft 6 in (762 mm) narrow-gauge lines around the beginning of the 20th century. Although all were closed by the early 1960s, parts of two have been reopened as heritage railways.
A depression in the early 1890s brought a halt to the rapid expansion of railways in Victoria. Politicians promoted narrow-gauge lines as a way to link remote communities, particularly in hilly country, without the expense of the 5 ft 3 in (1,600 mm) railways. Railways officials opposed them, citing the inconvenience and expense of a break-of-gauge. A parliamentary committee eventually identified 14 possible locations for narrow-gauge railways, and recommended that four experimental lines be built. They were:
The Warburton line was built in broad gauge, however authority was given for the construction of the other three lines. Subsequently, a further two lines were built, the Moe to Walhalla line, and an extension from Beech Forest to Crowes. At various times other lines and extensions were proposed, but none came to anything.
Initial plans were for the railways to be constructed in 2 ft (610 mm) gauge, but following correspondence with British railway engineer Everard Calthrop, amongst others, a change was made to 2 ft 6 in (762 mm) gauge.
None of the lines constructed ever made a profit. Freight rates were the same for broad and narrow-gauge railways, despite higher direct costs. Most of the loadings were goods such as timber, potatoes and lime, which were charged at a low rate. Most freight was outbound, so many trains travelled towards the terminals almost empty. And despite originating the traffic, the lines were only credited with a portion of the freight charge. The amount credited to the lines did not cover the cost of running trains, and the more traffic the larger the loss. However, particularly in the 1920s, the traffic generated by the narrow-gauge lines was appreciated by the railways and the lines survived for up to 60 years before closure.