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The NSW Government has recommitted itself to a new study looking at the feasibility of running a tram network in Sydney, including along George St. The new study would work together with local councils, with a 10 person panel already being appointed to oversea the study.
A return to the days of trams running down Sydney's George Street could be on the cards after the NSW government agreed to examine the proposal.
The government and four inner-city councils are funding a study into expanding its current light rail service further into the inner-west from its current terminus at Lilyfield.
However, Sydney Lord Mayor Clover Moore threatened to withdraw the city's contribution to the study unless it also examined a loop up George Street and down Hickson Road via the planned development at Barangaroo.
Transport Minister David Campbell, who originally rejected that request, has now changed his mind.
"I want an outcome and for that reason the NSW government will co-operate with the councils and include the George Street loop in the study," Mr Campbell said in a statement.
"This will delay the process while an expanded Request for Proposals is developed and resubmitted.
"It's important the councils come on board and assist us to get on with the job now and not allow any further delay."
A 10-person panel has already been appointed to look at the proposal, which was originally to examine expanding the light rail to Dulwich Hill via Summer Hill.
The panel, which includes representatives from the four inner-city councils, was also looking at expanding the line down Sussex Street from Central to Barangaroo.
Ms Moore welcomed Mr Campbell's decision to expand the study, saying it had the capacity for at least 4500 passengers an hour, allowing for the removal of long queues of buses from the CBD.
It would also make it easier and quicker for people to get from all parts of the city, she said.
"Light rail along George Street would transform central Sydney into a pedestrian friendly, efficient transport corridor that people would actually enjoy using," Ms Moore said a statement.
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