The New South Wales Government has announced it will use some money from the private sector to help replace the entire regional train fleet, leading to fears about fare rises.

Deputy Premier John Barilaro said an expression of interest would soon be issued for the design, construction and maintenance of the new trains.

In October last year, the Government committed $50 million to replace the 60 ageing XPT passenger cars that operate between Sydney, Melbourne, Brisbane, Dubbo and other regional centres.

Mr Barilaro is visiting Dubbo in the NSW central west to announce the Government will also replace the more than 50 Endeavour and XPLORER trains that service Moree, Armidale, the Hunter Valley, Broken Hill and the Southern Highlands.

He said the Government would award a contract to a private company in early 2019 to help fund the fleet and ongoing maintenance.

"What we're looking at is to see how the market will respond to that," Mr Barilaro said.

"That's why the expression of interest process that we're announcing today is to first flag to the market and to see what the market is going to put up as ideas, innovative approaches to delivering the project," he said.

The bulk of the trains will be built overseas.

Mr Barilaro said a private company would assemble and maintain the trains, with a new rail service facility earmarked for Dubbo.

"We don't build trains in New South Wales, and often we will get criticised, but the reality is it's about delivery on time, efficiencies and costs," he said.

"The expressions of interest process will flag to the market what we will expect, and that is to have the final assembly and components 100 per cent in New South Wales — the maintenance component will be in Dubbo.

"I think that's a balanced approach in getting value for money for the taxpayer, getting the product that we need quicker, and understanding that that's not one of our strengths in the Australian economy.

"There are great companies that have got great partnerships and a significant investment will see, I think, joint ventures."

Fears of fare hike under new model

Orange councillor Neil Jones, who is also a member of the recently-formed Regional Rail Action NSW, said he was concerned train fares would rise under the new funding model.

"I think it will review the fare structures and could lead to significant increases to costs, we've seen it in every other public utility," Cr Jones said.

"Will they be maintained to the same standard or will it lead to improved maintenance and then actual ownership of the train? Will they be profit-driven.

"We know that regional trains run at a huge loss and I think the Government is charged with changing their loss factor and maybe private ownership will bring about a reduction."

Cr Jones is among a number of people lobbying to have the new rail maintenance facility in Orange and said he was disappointed there had been no consultation about where it should be based.

"On the one hand [Dubbo] does make a little bit of sense, in that that's where the XPT journey will start or end, so that leads to some efficiencies in relation to maintenance," he said.

"It's just disappointing that these decisions are being made without consultation with local communities, usually you're invited to make a pitch for something like this, but we've never been given that opportunity.

"I would suspect that this was politically motivated without a full evaluation of the [proposed] Orange facility."

Peter Bailey from the Foundation for Regional Development said the fleet replacement would ensure regional people would have the most efficient links to bigger centres.

But he said the ageing regional rail network also needed to be upgraded.

"It's all very fine to have the latest trains, but if they're running at 40 kilometres an hour because of the problems with the track well we've also got to address that issue," he said.