The newly-amalgamated Snowy Monaro Regional Council is considering the viability of rebuilding the long-closed railway line from Queanbeyan to Bombala.

The council's development strategy paints a picture of employment and industry growth around import and export freight, with rural and remote communities linked to the major cities by passenger services.

It also focuses on tourism growth by linking to Canberra's international airport and the developing cruise ship port at Eden.

With the ACT developing as a major economic hub, the strategy anticipates the growth of hinterland villages like Bredbo and Michelago as satellite communities for an ACT workforce, connected by rail.

Planning manager Mark Adams said the time was right to look ahead at the benefits of rail to regional development.

"We just want to put that idea out there and see what happens," he said.

New South Wales began extending its rail network from Sydney in the 1860s, with the first rail line reaching Cooma in 1889.

It then extended further south to Nimmitabel in 1912 and to Bombala in 1921, with plans to eventually connect with the Victorian network.

The rail motor is carrying passengers between the villages on the Monaro. The freight train is heading towards Cooma and Sydney with regional produce. ( Supplied: Ray McDermott )

The Bombala Line, as it became known, was a transport spine into the remote south-east corner of the state, servicing the communities of the Monaro as well as the coastal communities of the Bega Valley.

Dean Lynch, administrator of the new council, said the State Government had decided to close the line in the 1980s.

"The government of the day obviously saw that it was running at a loss, and to cut costs ... they closed the railway," he said.

However, the view now is that a different economic environment, together with new efficiencies in rail operating models, are leading to a resurgence in regional rail services.

Railways now far more viable

Alan Gardner, a rail industry consultant, was involved in re-introducing freight services on the Canberra to Sydney line last year.

"Rail is 10 times more efficient than roads," he said.

Citing factors such as the privatisation of rail network management, the emergence of locomotive and rolling stock lease providers, and the development of Port Botany, Mr Gardner said regional rail services were now vastly more viable than in the 1980s.

Mr Gardner said if the line was restored from Queanbeyan to Cooma, it would open up similar opportunities to an innovative re-establishment of freight services from Canberra to Port Botany that began in early 2015.

He said that had been a business model formed by ESPEE Railroad Services, a business spin-off of the ACT division of the Australian Railway Historical Society.

ESPEE's client was a recycling business in Canberra needing to freight steel to Port Botany.

ESPEE went through the process of accreditation with the national regulator as a rail operator, which is necessary to purchase access to the rail network from the network's commercial managers.

Then they leased locomotives and rolling stock from a commercial leasing company.

"You don't have the significant capital investment required to buy million-dollar locomotives. Whereas you can lease against a contract," Mr Gardner said.

The railway reached Cooma in 1889 and closed in 1989. ( ABC South East NSW: Bill Brown )

NSW Government funding to re-open regional railway lines

However, the first step is that there needs to be a railway line that is open for business.

Mr Gardner cited recent NSW Government funding of $5 million to Hilltops Council to reopen 56 kilometres of the Cowra line between Maimuru and Demondrille.

This was one of 10 projects across NSW to receive first-round funding of $15 million under the Fixing Country Rail pilot program.

In announcing the funding, NSW Minister for Freight Duncan Gay said, "The NSW Government is determined to shift more bulk freight on to railway lines to ensure we get produce from paddocks to ports as quickly and efficiently as possible."

Mr Lynch said his council had already been approached by major investors whose plans required access to a rail network.

"It's important to be able to get people and freight in and out for a region to grow," he said.

Mr Lynch said he wanted to see a business case developed over the coming year.