Redeveloping the 34-kilometre Bungendore-to-Captains Flat railway line as a rail trail could open a new tourism industry replicating similar trails in Victoria, according to Labor's Steve Whan.
Rail Trails for NSW has launched a fresh attempt to establish trails - closed railway corridors with the tracks removed and replaced with road base or gravel - and several regional areas including Wagga and the North Coast are pushing for them.
Pedal Power ACT vice-president Jeff Ibbotson says a key to the success of the Victorian trails is proximity to large population centres.
He said a trail from Bungendore to Captains Flat, and potentially one from Queanbeyan to Cooma, would draw many Canberra cyclists.
Mr Ibbotson said Pedal Power groups regularly travelled to Victoria.
''If they travel that far they will certainly travel 30 kilometres out to Bungendore.''
Mr Whan said rail trails would enhance the Canberra region's reputation for cycling.
''Imagine the benefit for Captains Flat businesses if cyclists take the ride out and buy lunch at the Captains Flat pub or even stay the night?
''Other decommissioned railways with great rail trail potential include Hume to Royalla or Michelago.''
Goulburn rail historian and author Leon Oberg photographed the last steam loco leaving Captains Flat for Bungendore in August, 1969, when the train was used for filming the Ned Kelly movie.
Mr Whan said it was ridiculous state laws prevented lines being used for another purpose. ''Labor tried to change the law in our last term of government but the then Opposition and Greens blocked the legislation in the upper house.
''A parliamentary committee has recently made a bipartisan recommendation that rail trails should be developed in NSW.''
Mr Whan said under the Victorian model, the government retained ownership of the rail easement.
''You have to ensure as you travel through people's farms that you are not disrupting their activity as well,'' he said.
''That, in the past, has been a bit of a barrier to doing some of these [in NSW].''
''The Bungendore community expressed strong support for a rail trail some years ago but the old law stopped it happening.
''If we get the law changed then the key ingredient will be strong community support and positive discussion and co-operation with landholders near the route,'' Mr Whan said.
An economics benefits study found three Victorian rail trails generated more than $10 million annually.