It is widely believed that Melbourne's rail system suffers capacity constraints which prevent it providing significantly higher service levels or accommodating higher patronage. The most important bottlenecks are said to be the city loop and the Dandenong line. This paper examines the claimed capacity constraints on the Melbourne rail system in detail, utilising throughput standards derived from current best practice, but also from past performance and planning in Melbourne. It concludes that the claimed constraints are not substantiated. The paper then considers the political factors (including 'professional politics') behind the Melbourne rail 'capacity crisis', concluding that political, and not engineering, constraints are the dominant factor.