Nyngan's rail yard will be reconfigured to improve the efficiency of its rail operations.
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It will benefit freight operators on the Nyngan to Cobar rail line due to the increased capacity and more efficient trips.
"The existing 510 metre passing loop will almost double in length with a 424 metre extension, which will be partly built using rail and sleepers from the removal of redundant siding infrastructure as part of the project," Regional Roads and Infrastructure parliamentary secretary Chris Gulaptis said.
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"The completed project will allow mineral ore and bulk grain trains to operate more efficiently and will reduce congestion around the grain siding.
"The extended loop in Nyngan yard will complement the 1300 metre siding being built at Hermidale, with both projects due to be completed by the end of the year. This follows siding extension projects already completed at Trangie and Nevertire."
