THE Federal Government is being urged to fund a study to identify a route for a Fassifern to Hexham freight rail bypass of Newcastle and prevent housing and other development blocking the corridor.
The Hunter Business Chamber is pushing for the feasibility study and is approaching federal MPs to back their appeals to Canberra.
The bypass is a crucial part of plans for a freight hub near Maitland that would be fed from a container terminal at the Port of Newcastle.
The plan would rid tracks through Newcastle of freight trains that cause delays at railway crossings, such as at Adamstown.
Crossing closures are tipped to become more frequent once mining at Wyong begins and coal is brought to the port.
A study for the Department of Premier and Cabinet last year suggested a 37 kilometre-long bypass could be built for about $330 million by extending an existing coal railway loop to the hub and linking south to Fassifern.
The aim now is to preserve a rail corridor even if the project does not proceed for several years.
A new paper by the chamber identified the bypass as one of the solutions needed to overcome rail freight constraints in the region.
The paper, Where the tracks are heading, provides an overview of the freight rail needs in the region and highlights the infrastructure "gaps", or capacity limits.
Chamber chief executive Peter Shinnick said the State Government had to deliver on its commitment to make Newcastle the second NSW container terminal, a role it had identified in 2003.