The response comes after the senate committee released its 211-page report into the Inland Rail project in August last year.

The major infrastructure project is designed to to improve speeds and tonnage capacity along 1700 kilometres of railway between Brisbane and Melbourne via regional NSW.

However the senate report provided a scathing assessment of the management by the federal government and Australian Rail Track Corporation (ARTC), lack of public consultation and budget blowout of the project.

In its response, released in December last year, the federal government supported 12 of the 26 recommendations made by the report, supported three in principle, noted five and rejected six.

In its report, the Labor-led senate committee called for the government to update the 2015 business case, which originally estimated the cost at $4.6 billion, but had blown out to $14.3 billion.

The inquiry further heard expert opinion that the project's costs could continue to exceed $20 billion.

The government response said it would not support the recommendation to update the 2015 business case, as they believed it was not needed or was an "appropriate use of taxpayers dollars".

They noted such reviews would only delay the delivery of the project, increase cost and adversely impact landowners, businesses and stakeholders. They added the project was driven by an increasing freight needs over the next three decades.

The Senate report detailed concerns raised about the Narromine to Narrabri (N2N) section of rail, which is the project's longest greenfield section, with 306 kilometres of new rail which will travel through Burroway, Curban, Mt Tenandra and Baradine.

Issues raised in the report include its route alignment, which crosses known floodplains, and concern from stakeholders about an increased flooding risk posed by Inland rail.

The senate report shared its 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 recommended the federal government establish an independent comparative review of the different alignments, and take into account the both the impacts and potential broader economic benefits for regional economies and communities.

However the federal government rejected this, noting it had taken into "careful consideration" findings of a range of studies undertaken in 2006, 2010, 2015, 2016, 2017 and 2020 to ensure the route would meet the business needs defined by the project.

The government's response was that the greenfield alignment achieved this best, as it reduced distance between Narromine and Narrabri by 167 kilometres, and transit time by five hours and 30 minutes, compared to using the existing corridors via Dubbo and Werris Creek.

"Where appropriate, Inland Rail has used existing rail corridors, but for some sections like the Narromine to Narrabri section in NSW, a new and more direct route is needed to ensure that Inland Rail can meet its service offering," the response said.

"The studies resulted in the selection of the approved Narromine to Narrabri study area as the best route between Narromine to Narrabri as it provides both the shortest distance and transit time and would cost less overall to build than the other alignment options examined."

The senate committee recommended the government establish an independent internal flood and hydrologist panel to review the flood modelling and design features of the project in NSW.

They suggested 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'.

But this was not supported by the federal government, who said the NSW government's environmental approval process for the project included an independent review by a hydrologist of the ARTC's flood modelling, and was a mandatory requirement of the Environmental Impact Statement (EIS).

"This requirement includes that the independent expert's report forms part of the EIS documentation released for public comment," the response said.

"These reviews include an assessment of the setup, calibration and application of the flood models to assess potential changes to flood impacts as a result of the proposed Inland Rail reference design."

However the federal government did support the report's recommendation that lessons learned from the Queensland Independent flood panel's findings be used to inform all floodplain modelling.