Titled 'Inland Rail: derailed from the start', the Senate Regional Affairs and Transport Reference committee released the 211-page report which details a range of major issues in relation to the project, in particular failures by the federal government and Australian Rail Track Corporation (ARTC).

The Inland Rail project envisages a 1700-kilometre freight rail network between Melbourne to Brisbane, with a transit time of less than 24 hours.

The report says the project, originally estimated to be $4.7 billion, is now predicted to top $20 billion.

Issues raised by the Labor-led senate committee include the business case for the development, failings in community engagement and consultation, route selection issues and flooding and hydrology concerns.

The committee warns community and industry support for the project is at risk and made 26 recommendations, including for the government to set up its own inquiry to oversee the project to ensure the government and ARTC are "held accountable for their management" of the project.

The Narromine to Narrabri (N2N) section was discussed in the report, in particular its route alignment which crosses known floodplains and concern from stakeholders about an increased flooding risk posed by Inland Rail.

Following evidence presented to the senate, the committee recommended the federal and NSW government establish an independent international flood and hydrologist panel to conduct a review of the flood modelling and design features of the Inland Rail project in NSW.

They suggest the panel should consider the findings of pre-existing reviews, including the findings from the WRM Water and Environment: 'Independent Review of the Flood Modelling: Narromine to Narrabri Inland Rail Project'.

The report also shared their concern about the appropriateness of the N2N alignment, in particular the decision to use a greenfield section of track, rather than the existing Dubbo-Coonamble line.

They stated evidence presented to the committee suggested the government and ARTC had not conducted a "thorough and detailed review" of this option and the economic benefits for residents in the Coonamble region.

They ultimately supported an independent comparative review of the N2N alignment with the proposed Dubbo-Coonamble line, and alternative routes around Narrabri. They said this should also take into account the impacts and potential broader economic benefits to regional communities.

"The rationale for this decision is again based on the 24-hour journey time. Yet again, this parameter has undermined consideration of a potentially more appropriate Inland Rail corridor and damaged the community's trust in the Inland Rail project," the report said.

The report also shared stakeholders' concerns about the impact Inland Rail would have on local water resources, and encouraged the ARTC to conduct a "thorough investigation" and consult with landholders and local governments, to assess groundwater resources.

Ultimately the report recognised the "fractured relationship" between the ARTC and key stakeholders.

It encouraged the ARTC, NSW Farmers and the CWA to "re-establish a working relationship" in order to facilitate the necessary dialogue required to produce a positive outcome for communities, landholders and Inland Rail.

"The committee supports the ARTC engaging an independent mediator to facilitate an improved working relationship between all parties," the report stated.

"The committee requests that NSW Farmers reconsiders the ARTC's offer for an Inland Rail representative to be embedded within NSW Farmers to act as a conduit between its members and the ARTC."

The report was welcomed by NSW Farmers and the Country Women's Association of NSW, who together sought legal advice on dealing with the ARTC after repeatedly raising concerns with the agency's community consultation processes.

NSW Farmers Inland Rail task-force chair Adrian Lyons said it was the first time in six years the group felt their issues had been heard.

"The ARTC have continually had a 'crash or crash-through' mentality when it comes to the execution of this project. Well today, they have crashed. In a major way," he said.

CWA NSW chief executive Danica Leys said the report vindicated their concerns.

"The report shines a huge light on these matters and totally supports the advocacy work that that we've been undertaking," she said.

ARTC's interim chief executive, Rebecca Pickering, said the organisation would take the recommendations on board.

"ARTC recognises that the issues investigated by the committee are matters of great interest for the freight and rail industry and for communities, particularly those who reside in regional and metro areas along the Inland Rail alignment," she said in a statement.

"We have heard the call from stakeholders who expected more from our early engagement on Inland Rail and we have continued to improve as the project progressed.

"Building Inland Rail is about working together and our priority is to continue to work with landowners, key stakeholders and government through respectful engagement and consultation.

"We will ensure continued improvements are implemented as Inland Rail is designed and constructed so that Australians can access the significant jobs and economic benefits of this national infrastructure.

"ARTC continues to deliver Inland Rail on behalf of the Australian Government."