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Melbourne's transport system is slowly failing, a world expert says. The Government says the train system is near capacity and will soon be unable to cope with more passengers. Figures released last week show late running continues to worsen and public confidence is low.

MELBOURNE'S dysfunctional public transport system will grind to a halt without massive investment, becoming a liability for the city's much-vaunted liveability.

A major report, to be launched by Transport Minister Peter Batchelor on Monday, finds the city's transport system compares poorly with the other top 14 cities in the annual liveability rankings.

This year, Victoria's capital slipped to second place in the rankings, published by The Economist magazine, losing its most liveable crown to the Canadian city of Vancouver. Without drastic action, Melbourne's growing transport needs will cause the city to slip further, the study, Most Liveable and Best Connected?, says.

"Melbourne's public transport network as a whole struggles to offer a time-competitive alternative to car travel on almost any trip. Each public transport mode in Melbourne — trains, trams and buses — requires far-reaching innovations, in terms of operation and infrastructure, to offer premium standards of service such as those that help other cities perform better."