Premier Nathan Rees announced to the weekend's ALP state conference that the second stage of the $1.3billion south-west rail link project would start mid next year and be financed by the sale of the state's electricity retailers.

Macquarie Fields MP Andrew McDonald said the announcement came after a lot of lobbying by the region's MPs.

``It's a great decision,'' he said.

``The first stage is still being built now, which is the most expensive part costing $800million, but the second stage, which will cost $500 million, will be starting soon. So instead of a staged project it will happen together ... how it was initially planned.

``The fact that the economic crisis wasn't as bad as we expected has also helped.''

Leppington resident Frances Vumbaca said she was happy with the news even though the line would run through her property.

She said the State Government had offered to buy her property, but for much less than it is worth.

``I fought the compulsory-acquisition order in court because it just wasn't a fair amount and we won, but then we had all these court costs,'' Mrs Vumbaca said.

``So we've been fighting to be compensated for those, and we've just gotten those back.

``Hopefully this time the link does go ahead and they make a better offer.

``Everyone's sick of having this hanging over their heads. We'll need to get new valuations done and start all over again.

``This link is really important to the area.

``The roads are a nightmare so we need other transport, especially with the new releases coming up.''

Mayor Wendy Waller said she was always confident the line would be built as the Government had continued to buy land.

East Liverpool Progress Association president Michael Byrne said the link was necessary for the area but was being used by the Government to ``win the hearts and minds of the people'' of the south-west.