Seven jobs are expected to go from Nyngan as UGL Regional LINX take over operations to deliver rail maintenance and infrastructure for the country regional network project.
The new company won the 10-year contract issued by Transport for NSW for rail track maintenance, replacing John Holland Rail from January next year.
However the Bogan Shire Council were informed the Nyngan Works Depot was not included in their contract submission, and they would base their western operations in Dubbo and Orange.
Bogan Shire Council mayor Ray Donald said this would mean a mobile crew would replace the seven workers in Nyngan, who he said would be offered redundancies or alternative employment in other locations.
Cr Donald said the council, who are fighting to keep the depot open, met with CEO of UGL regional LINX, John Pistak last week who explained the Nyngan depot "wasn't necessary".
"His explanation was when they looked at the overall operation of the area that they're taking control over, they found that the Nyngan office wasn't really necessary," Cr Donald said.
The country regional network includes almost 2400 kilometres of operational rail, 300 active level crossings and 1200 property assets such as stations, including 356 which are heritage listed.
It connects passengers in regional NSW to regional and metropolitan centres, and is a vital link for customers transporting freight, grain, cotton and resources to market.
The council however have explained to Mr Pistak there would be extra freight on the line near Nyngan with the expected expansion of mining north of Girilambone and south of Nymagee.
"We got him figures on current freight movements, but we're trying to get an estimate of what increased movements might be," Cr Donald said.
"We're trying to show that the line is a very viable one and has extra freight programmed to come onto it over the next few years."
However Cr Donald said Nyngan was the only existing depot left out of their tender, and if closed could have detrimental impacts to the small community.
"This number of local jobs are miniscule to this large company's budget, but very important to our local economy and local families if they are discontinued," he said.
"The local workers know where to go when there's a lot of rain or flood waters threaten the line, they know when the line heats up over 40 degrees where to go to make sure it's still safe, and that's another big value of keeping the local workers here."
"One valid point is that the line from Dubbo through to Cobar, which is about 300 kilometres, is far better maintained by works depots in the middle, rather than one coming from one end."
Cr Donald said the council had urgently written to a number of state and federal government ministers including deputy premier John Barilaro, seeking intervention.
However it comes down to Minister for Regional Transport and Roads Paul Toole.
"You can't ignore the discontinuation of seven local jobs in a small rural community, and I hope that will be the main lever for [Mr Toole] to intervene and have that reversed," he said.
"So we're just waiting to hear back hopefully sometime this week."
The current contract to operate and maintain the country regional network has been held by John Holland Rail since 2011 and is due to expire at the end of 2021.
CIMIC Group Limited, responsible for UGL regional LINX were contacted, but declined to comment on the closure of the Nyngan depot.