The NSW premier says a report outlining a $1 billion blowout in costs for the state's new fleet of Spanish-built trains is out of date.
But he concedes there have been challenges upgrading the ageing regional XPT fleet, which runs services as far as Melbourne and Brisbane.
"There's no doubt there have been challenges," Dominic Perrottet told the ABC on Tuesday.
"We have invested record amounts in transport infrastructure, and when you do that there are challenges and problems that do come along the way."
In a confidential report, advisory body Infrastructure NSW said the Regional Rail Fleet Project was almost three years behind schedule and "most likely $1 billion over budget", the Sydney Morning Herald reported.
The core issue was the "inability" of Transport for NSW to scope the project before going to tender and awarding the contract to Spanish firm CAF in 2017.
The project was expected to be completed in five to six years, but the end date is now more likely late 2025.
It also warns a Dubbo maintenance facility being built to service the fleet could become a drain on taxpayer funds if CAF continues to delay its delivery of the trains.
The fleet will replace the XPT fleet, which has been on the tracks for about 45 years.
Transport for NSW chief operations officer Howard Collins has said there were multiple reasons for the delay.
"Worldwide there has been a shortage of labour, we know the impact of COVID-19, we also know that we worked pretty hard in making sure these trains are fit for purpose, and we've learnt a lot of lessons," Mr Collins told reporters in December.
Mr Perrottet said labour shortages and cost escalations continued to impact infrastructure projects worldwide.
"If you're building $112 billion of infrastructure ... there are difficulties," he said.
"It probably impacts us more so because we're building more than any other state in this country."
Labor Leader Chris Minns criticised the government for buying overseas-built trains, saying they had not learnt from previous transport blunders.
"They haven't learnt from when they bought trains that didn't fit the tracks," Mr Minns said.
"Instead they have bought trains from overseas that don't fit the existing infrastructure.
"Passengers will already be waiting an extra three years for new regional trains.
"Now they face the prospect of further delays because they have bungled the rollout of the infrastructure these trains need if they are going to carry passengers."
