Quite some years back, at least 20 + there was a double page spread in one of the old Railway magazines, may have been in the NSW ARHS magazine, or the Roundhouse one, the maps included a good range of articles that highlighted at that time routes and future coal lines, along with those currently in use. Also included was the proposal for a bypass freight line, and rather than just use the old Fassifern/Teralba route, it propossed one that veered off at the bottom of Hawk Mount & ran through to Hexham. At the time there was no such future for an ILR route, but was primarilly for coal trains and other freight movements to Kooragang and PTW areas.
At the time the sidings at Hexham were not shown or mentioned, the primary call for the new line was for freight trains of all types to bypass the congestion betwen BMD and Dora Creek, both directions. At that time also, Fassifern was still in coal haulage operations to Awaba and to PTW/Kooragang, also the the Cockle Creek coal loading was in use, which meant that the coalies were more frequent, albeit shorter than what is seen today.
Part of the propossal also allowed for a Y to be built to enable trains heading to the NCL and to WCK and beyond would not need to reverse the loco's on those trains. A side note was that the XPT's and regional trains need not go to BMD but Maitland would be the primary station, that was knocked on the head as the bypass line was for freight, and Fassifern was a primary stopping station.
The old Stockrington colliery rail line, did have a fairly large amount of remedial work on the lines ROW as it crossed the edges of the swamp, the Aurizon service centre, has a longish dead end track at the Western side of the facility, while not on the old colliery alignment, there has been quite an amount of work carried out in parts of the swamp that blocks much of any potential flooding as used to happen, further work can be carried out without any excessive damage (as such) to the swamp areas.
While there is a road access from the Exit for Taro/Beresfield from the Highway that serves the Aurizon facility, there is enough solid ground there to allow for an exit to the Coal roads before the Highway Overpass, for trains heading to the Coast, there is new crossovers from the coal road to & from the main line North of Thornton, near where the old brick works were located.
While it would be more expensive, I believe its a better propossal, rather than trying to utilise the old 1:40 grade all the way on the old alignment, might be straighter but with a new estate being build right up to the edge of the old alingment, there could be resistance to it. Would benefit through Pax services though.
The other aspect regarding costs, the line would likely need to have a fair number of tunnels as the area in question from Fassi & to get to the old colliery line, is fairly hilly and much of the area is now built out.