UGL Regional LINX will replace John Holland Rail next year, after the company won the 10-year rail maintenance contract issued by Transport for NSW.

However under the new contract, it was announced the Nyngan depot would be closing, with seven jobs either relocating or being made redundant.

The news has ruffled feathers within the workforce, with one senior John Holland employee, who spoke on the condition of anonymity, telling the Daily Liberal there would also be almost 50 job losses, just in Dubbo.

"As you can imagine the people are pretty devastated, and there's just nothing they can do about it," he said.

The employee said there would be almost 194 job losses across the state as a result of the change, with almost 21 positions lost in Tamworth, 50 in Bathurst and 10 in West Wyalong.

Since the announcement, he said there had also been 40 key resignations.

Minister for Regional Transport and Roads Paul Toole was asked about the number of job losses in areas such as Dubbo, Tamworth, and Bathurst. He defended Transport for NSW's commitment to rural areas, stating it will be better for the bush overall.

"Through the new contract with UGL Regional Linx, a minimum of 80 percent of staff employed on the CRN must be based in regional NSW, and UGL is exceeding this target," he said.

"Through the direct employment and redeployment options under the contract there will be an overall increase in regional NSW of 71 jobs will be achieved overall."

While UGL is set to establish a network control centre in Orange, with the expectation of driving "new jobs" in the town, it's believed these jobs are being moved from other regional locations such as Dubbo, Bathurst, Tamworth, West Wyalong and Nyngan.

"They say they're creating these new jobs in Orange, which is true those jobs have never been in Orange before, but it's off the back of jobs that they're taking away from other country towns," the employee said.

In documents seen by the Daily Liberal, a number of current John Holland employees, eligible to transfer to UGL, are being subject to a two-offer process.

UGL will make an offer to transfer employment, which will be for the position they currently hold including the same terms and conditions, same remuneration and same location, in order to comply with the Fair Work Act, and guidelines set out by Transport for NSW.

However employees will then be made a subsequent offer, for either a different location or different role.

In their letter to employees, they state if you accept the initial offer, you have the option of either accepting or rejecting that subsequent offer. However if you reject the second offer, they would be required to participate in the company's redeployment program for a job somewhere in the company, which ultimately "may result in a redundancy".

The Daily Liberal's source explained what they believed was "disingenuous" and an "unfair" process for regional NSW.

"They might have somebody who is say, a track worker at Dubbo for example, they might say, you've got to role on the same terms and conditions," they said.

"But then in the very next breath with the second one, they'll say actually, you've only got a role if you're willing to relocate or if you're willing to take a pay cut, or you're willing to sacrifice these conditions or something like that.

"So they're not actually abiding by the terms and conditions of how this process is supposed to work, but Transport for NSW is not holding them to account."

Mr Toole was asked about this process and if he was concerned UGL wasn't upholding their obligations under the contact, however said the NSW government was working closely with the two companies to ensure a "robust transition" process was in place for all impacted employees.

The John Holland employee said they believed taking away the jobs from other regional towns, like Nyngan would damage response time and experience.

"It's just the worst outcome for everybody," he said.

"What they don't realise is you've got that [Nyngan] team supporting two pretty critical towns, Cobar and Nyngan.

"They have multiple level crossings in town, and what's going to happen if they have a level crossing in say Cobar failing and going off and they have to send the team up from Orange or Dubbo?

"It's just going to be going off for five or six hours which means, you're probably gonna have to call the police out and man level crossing so you're straining other agencies' resources.

"Plus, when it comes to summertime, that team is out there every day. Some of the hottest parts of the state are serviced by that team."

He added this cut to regional locations, along with the two-offer process was "squandering human knowledge and asset".

"You'll lose their experience, you'll lose their understanding of those sections of track," he said.

"The cost of keeping those guys on for 10 years is nothing. Comparatively you're saving peanuts here compared to the big picture of how much the thing costs overall.

"The human cost is pretty terrible."

"All that you can really be sure of is that there'll be longer delays when there are failures, and there will be an increase in risk of serious incidents."

Many John Holland employees are also concerned there would not be enough people to complete maintenance jobs along the track.

"Everybody that's left knows that they're going to be working twice as hard, because they already are," the employee said.

"The job hasn't changed, it's still the same railway, there's still the same amount of work to do."

However Member for Dubbo Dugald Saunders said more roles could become available with the new rail maintenance facilities at Dubbo.

"It's estimated the project will generate around 200 jobs during peak construction, and 50 ongoing jobs during operations, including traineeships and apprenticeships," he said.

UGL were contacted but stated they do not comment on matters related to their people.