On Monday, the Legislative Assembly Committee on Investment, Industry and Regional Development held its second public hearing looking into communities across regional NSW and how they will benefit from the economic development opportunities arising from the project.

The Inland Rail route will pass from Curban to Mt Tenandra, east of Coonamble.

One of the main concerns raised by Coonamble Shire mayor Al Karanouh and manager of economic development and growth Pip Goldsmith at the hearing, was the potential of missed opportunity for socio-economic growth due to the alignment.

Cr Karanouh said having the route closer to Coonamble and using the existing rail infrastructure, which would pass Combara, offered potential to reduce transportation costs, increase export competitiveness and improve economic activity in the district.

"That fell on deaf ears," he said.

"[Inland Rail] is a great thing for Australia to have and we are 100 per cent supportive of the whole project, but to miss a town that produced last year alone very close to 600,000 tones of wheat and pulses is just mindboggling."

When asked if the project would bring socio-economic positives or negatives to the Coonamble Shire, Ms Goldsmith said that was difficult to determine at this stage.

"There is indication that there may be benefits in the long, long term, in terms of supply chain efficiencies. But we don't understand what they are, so there's no confidence there will be a net positive result at the moment," she said.

In their submission, they highlight that the route poses to leave existing supply chain assets, industries and jobs in the Coonamble LGA "stranded".

"The only benefit is going to be if its more efficient, more economical for producers to access Inland Rail, and if there's some more opportunity for economic diversification locally," Ms Goldsmith said.

The inquiry highlighted concern for stranded assets, including the potential for QUBE and Grain Corp, currently based in the shire, to shift operations closer to the route, taking with it employment.

Ms Goldsmith said this could in turn heavily impact their farming sector.

"So should that infrastructure move or be stranded, it's a threat that our agriculture sector will decline ... If those assets can't remain connected and can't even remain here then there's a real concern that producers will be limited with options," she said.

Another key concern raised by both witnesses and members of the inquiry was the Australian Rail Track Corporation's (ARTC) lack of community engagement, consultation and justification.

Ms Goldsmith said while a multi-criteria analysis had been undertaken to examine several alignments, it ultimately favoured time saving over tangible enduring benefits for economic diversification.

"A lot of the questions for ARTC would be about why decisions have been made, because there is certainly community sentiment that decision making hasn't been justified and there hasn't been transparency around the process," she said.

She said residents were also concerned to see extensive greenfield development chosen over existing rail corridors, and no investigation into what the socio-economic benefits for the Coonamble LGA would be.

When asked what the state government could do in assisting Coonamble with capitalising on the project, Ms Goldsmith explained the concern about the project crossing the Castlereagh Highway at Curban.

"The Castlereagh Highway is our major road connection between here and Dubbo, which is the medical and commercial lifeline for the Coonamble community," she said.

"But for cars to not have access to Dubbo for a medical emergency, or for general business, and having to wait for trains to cross would have an enormous impact on this community."

Ms Goldsmith said the council had lobbied for a raised crossing, and were informed the federal government had identified the intersection as the third most important for grade separation.

However she said the ARTC informed her this would not be recognised in their report or design changes as it was the responsibility of the state government.

"That would be valuable for some information about what that process is and what happens there, because that will make a big impact to this community, if it's a state responsibility to manage that separation of the Inland Rail project, that would give this community some confidence and comfort," she said.