A political stoush has erupted in regional New South Wales politics, after the State Government earmarked a new rail maintenance facility for Dubbo in the state's central west.

The Government announced on Monday it would replace the entire regional train fleet and build a new rail maintenance facility to service the trains.

It has sparked disappointment from some community leaders in the nearby city of Orange, who wanted the facility to be based there.

The Orange electorate is now held by the Shooters, Fishers and Farmers MP Philip Donato after a massive swing against the government in a by-election last year.

The Nationals Member for Dubbo Troy Grant cited Orange's state leadership status as one of the reasons the city did not secure the facility.

"At the end of the day, that is what happens when you don't have someone at the decision making table of government," Mr Grant said.

"That is a consequence, and Dubbo is becoming more and more obvious because of the connectivity to the whole state, its geographical location is far superior to Orange."

Shooters MP labels move 'pork-barrelling'

The simmering tensions come ahead of the Cootamundra by-election, sparked by the retirement of Nationals MP Katrina Hodgkinson, where the National Party will fight to avoid a repeat of its result in Orange.

But the Shooters MP Phillip Donato said Mr Donato said he met with the Transport Minister Andrew Constance in March to discuss the possibility of basing the facility in Orange, and he had been "non-committal" about the idea.

He said he believed the electorate of Orange was being punished for not having a Nationals member of parliament.

"It looks like to me this was a pork-barrelling exercise for Dubbo, solely for Mr Grant's re-election," Mr Donato said.

"We've seen that most recently with the relocation, or the creation of the Rural Fire Service training facility in Dubbo only a couple of weeks ago and now this decision in relation to this rail maintenance facility.

"They're punishing the people of Orange for exercising their democratic right and not electing a National Party member last year.

"They're in government to serve the whole of the state, not just to serve those electorates which they hold."