THE NSW Government faces another transport project running into financial difficulty after a ratings agency warned of a possible funding shortfall in a contract to deliver 626 train cars to Sydney's rail network.

Less than three weeks after the Premier, Kristina Keneally, canned the $5 billion CBD Metro, Moody's cut the credit rating of the largest privately funded transport project in NSW history, from investment grade to junk status, due to fears of ''higher risks in its financing structure''.

The $3.6 billion contract for the next generation of Chinese-made trains was running five months late and has been further undermined by a lack of confidence in debt markets.

Moody's said the consortium's financing vehicle, Reliance Rail Finance, could be exposed to a potential funding gap of $357 million from early 2012 or ''higher funding costs or both'' if its two guarantors went bust.