Duncan Gay, the Minister for Roads, Maritime and Freight met with stakeholders in Cowra last week, including those involved in the tender process, and council representatives from Harden, Young, Cowra, Blayney and Weddin councils to deliver the news about the Cowra lines.

Mr Gay said that he was as disappointed with the outcome as the other stakeholders involved.

"I would have loved to see this project go ahead, and I still believe there is potential," Mr Gay said.

"We aren't just going to give up and go gardening."

According to Mr Gay the tenders were rejected on financial grounds.

"We went through the numbers and there was not enough revenue to make any of the tenders a viable option," he said.

The Cowra Lines would have cost $30 million to restore, and an additional $2 million per year for upkeep, according to Mr Gay's figures.

"The tender process revealed that there was too much uncertainty in the ability of the tenderers to return the lines to full service and run a commercially sustainable business without significant tax payer support, but the government remains open to future proposals to make the lines operational again," he said.

The Blayney Demondrille lines, also known as the Cowra lines comprise of 200 kilometres of non operational lines between Blayney and Harden and Koorawatha and Greenethorpe.

The government has committed $400 million to NSW's Fixing Country Rail program, while $153 million is set to be invested in upgrading 996 kilometres of grain line across the state over three years.

Mr Gay says in the future the Blayney Demondrille lines may be eligible for some of that funding.

"That money has been put aside for country rail networks, so there is no competition with the city, just other country rail," he said.

Mr Gay also said that while the tender process did not result in the Cowra Lines being leased to a private sector operator, it has generated market interest and provided valuable information that may assist in bringing the lines back to operation in the future.