ODT graphic.

Plans are on track to put the "rail" back into the Otago Central Rail Trail.

More than two decades after the closure of the Central Otago railway line, a well-placed rail insider has revealed plans to reinstall tracks along the line.

"With oil prices the way they are, and the growth of industries along the route of the former railway line, the pressure is on for a cost-effective form of freight," the man, who spoke to the Otago Daily Times on condition of anonymity, said.

The growth of dairying in the Maniototo, gold mining in the Ida Valley, the burgeoning viticulture industry around Alexandra and Clyde, development of a diatomite deposit at Middlemarch and the possibility of lignite mining near St Bathans have all been the catalyst for plans to revive the railway line.

"We know this might be a controversial move, but we have to look at the bigger picture," the insider said.

"It makes sense, economically, to have rail transport next to where all these developments are taking place. The railway was constructed 100 years ago and its main use over the years has been for freighting goods. Cyclists and walkers have had it all to themselves for the past decade or so, but I'm afraid they'll just have to get used to sharing it."

The 150km route from Middlemarch to Clyde "reopened" as a walking and cycling trail in 2000 and has proved popular with New Zealanders and overseas visitors.

The trail is one of the district's premier tourist attractions.

Because the structures - bridges, tunnels and viaduct - are already in place, re-laying the railway tracks should be a relatively straightforward process, the man said.

"The most complicated part will be allowing for two very different uses of the track - the recreational users and the commercial side of things - but we're confident we can manage that. Regular train services are planned, up to three times a week initially."

Traffic lights will need to be installed at the tunnels, viaduct and bridges to control traffic.

Warning signals will also be placed where the railway line crosses the highway.

"Safety is of paramount importance and, of course, traffic will be one way only through the tunnels and viaduct. The times trains will be using the track will be well publicised, but we're considering a ban on iPod use by cyclists and pedestrians too, as an extra safety measure," the spokesman said.

"Thousands of people use the rail trail every year and rave about their experience. We're hoping that having trains back on the line will add another dimension and enhance that experience for them. The trail already boosts the economy of the region and now the economy will be boosted even further by giving producers the option of rail freight, right at their doorstep."

Full details of the plans are expected to be revealed at noon today.