Dominic Perrottet is vowing to push ahead with stage two of the $600 million Parramatta Light Rail, a day after an independent agency urged the NSW government to reassess the project.
The premier would initially not be drawn on how much the mega project would cost, however his office tweeted on Wednesday it would cost $600 million.
The tweet was subsequently deleted.
The premier later confirmed the government would commit $602.4 million to the project, in a tweet he said would not be deleted.
Infrastructure NSW, the state's independent advisory body, on Tuesday said the government should reconsider a number of its "megaprojects", as rising costs raised doubts over their benefit.
"These days megaprojects lay the foundations for communities to thrive and to flourish," Mr Perrottet said on Wednesday.
Labour shortages and rising material costs posed a challenge to infrastructure both locally and nationally, he acknowledged.
"It's only proper that we would ... look at the pipeline of those projects, and ensure that we sequence them in a way that works."
He earlier told the Sydney Morning Herald Infrastructure Summit the state was at a "crossroads moment".
"If the government was looking for an easy way out, an opportunity to slam the breaks and bring it all to a halt, this would be the moment," the premier said.
Infrastructure Minister Rob Stokes said the government had chosen the Western Sydney megaproject, and was fully determined to deliver for the residents of the area.
"We've already seen the transformative benefits that light rail brings to communities," Mr Stokes said.
Another megaproject, the Northern Beaches Link, was not "pork barrelling" for a 2017 by-election, and had been a response to failed planning in the 1960s, the member for Pittwater said.
"What we are recognising, however, is that because of the headwinds we are facing that ... the program of works, of which Beaches Link is a part, needs to be developed over time," he said.
Labor Leader Chris Minns said people should be wary about the government's promise to deliver stage two of the Parramatta Light Rail, saying there had been more than a dozen announcements on the project.
"The NSW Government has announced Parramatta Light Rail stage two 14 times," Mr Minns said from Wentworth Point on Wednesday.
"At the last state election, they promised the infrastructure would be put into this community, (and) straight after people voted, they yanked it from the NSW budget.
"Is it any wonder that the residents of this community are sceptical when the premier says we're finally going to deliver the infrastructure that we've been promising for years and years and years?"
"You cannot expect the people of Western Sydney to move into brand new communities, with the promise of infrastructure that you then fail to deliver when it's most needed."
Multiple high-density estates in Wentworth Point, Melrose Park, Carter Street and Olympic Park were designed for light rail, Business Western Sydney executive director David Borger told AAP.
"Western Sydney is underserved in terms of public transport. There just isn't enough," Mr Borger said.
"It has been frustrating to see projects like the Eastern Suburbs Light Rail and even the Northwest Metro, very expensive public transport projects developed without the sort of housing uplift that we see in Western Sydney."
