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Manager of the LVR Heritage Centre, Ian Cameron said the funding would allow them to rehabilitate the rail line between the Heritage Centre Depot in Campbell Street and the Holmwood Silo Loop.
Mr Cameron said it had been a project on the books since the state government closed the line in 2009.
"There's been no maintenance done on it (the line) for over 10 years but it was restored back in 2000 when the line was reopened for freight, so it's still in reasonable condition," he said.
"Preliminary work has already been done on the project, with a professional rail maintenance company carrying out a detailed survey of the line earlier this year.
"They've said 'yes it's quite within the realms of getting it up and running again' for the amount of money we have available," he said.
Cowra Mayor, Councillor Bill West, said the rehabilitation of the line would be tremendous for the shire.
"It's exciting times not only is it a chance to display some of the tremendous rail history, but it opens up this short length of track for important tourism industry which will be income generating," he said.
"Equally it's important to the LVR who can train drivers and crews on a line that is ideal for purpose.
"It's also a demonstration of the federal government drought funding creating economic stimulus and providing infrastructure for growth in the future," he said.
The stretch of track is around seven kilometres long and Mr Cameron said it would be a 45 minute round trip, with trains heading from the depot, through Cowra Station, crossing the highway and proceeding to Holmwood.
"Our aim eventually is to go to Woodstock, it's an ideal destination because there's a hotel and a station platform so people can get out and walk around, but you have to walk before you run," he said.
"So we figured Holmwood would be a good destination, because there is a passing loop where we can run the engine around and come back down to Cowra.
"It would take about 15 minutes to get there, 15 minutes to loop around and 15 minutes back so about a 45 minute round trip.
"Because we're planing on opening to a heritage standard, which is far less than the standard to run a freight train on and the age of the engine, we'd be restricted to about 40km/h.
"It doesn't seem very far but when you are not going very fast it doesn't really matter where you are going, if people are enjoying the sound of the steam engine and riding on a train."
Once operational, Mr Cameron said the LVR hoped to run steam trains at least one weekend a month, bushfire season permitting.
"At other times diesel engines may be used," he said.
"We are also looking at public holidays and charters, anybody could charter it to have a party on the train.
"LVR has a fully refurbished lounge car in its fleet, when coupled with a large first class sitting car it could cater for over 50 in complete comfort," he said.
Mr Cameron said the first engine to return to service would be 5367, affectionately known as Rosie, which was the beneficiary of a $50,000 NSW Transport Heritage Grant for repairs last November.
"Rosie was the last steam engine in regular service west of the Blue Mountains, leaving Parkes for the scrap yard in 1971," he said.
"The other locomotive 3026 was the last steam engine to see service in Cowra.
"Both steam engines are earmarked for repairs aimed at bringing them up to scratch to operate the tourist services.
"This plus the refurbishment of several carriages for the service is due for completion later this year," he said.
LVR secretary/treasurer John Healey said the repair works could be platform to bring trades back to the depot.
"We'd like to use this project as a springboard to reactivate all the pieces of equipment we have within the facility," he said.
"As far as I know it's all operational its just not had a job to turn them over for a while.
"Long term it would be great to think we can get fitters, boilermakers and other trades involved in the project," he said.
Mr Cameron said it was an exciting time for LVR and the volunteers were looking forward to the service.
"The two people who fascinate us are the young kids who may never been on a train, let alone a steam train," he said.
"And the old people who tell you about their memoirs, how they remember going to school, going on holidays.
"It's fascinating to talk to them."
Mr Cameron said the LVR invited anyone with questions or comments, or anyone interested in joining their volunteer workforce to contact the society via its email email@example.com
This article first appeared on www.cowraguardian.com.au
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