The loops will be located between Lithgow and Blayney and will allow slower trains to move off the track so that faster ones can pass.

Freight minister Melinda Pavey visited the Georges Plains site of one of the loops on Thursday to make the funding announcement. The other loop will be three kilometres south of Rydal Railway Station.

“The two loops will ensure the nine million tonnes of freight transported annually along the western corridor moves more efficiently, reducing the cost of getting export freight to port and domestic freight to markets,” she said.

“Sometimes we’d have 30 minutes wait while trains pass each other.”

Business Grainforce, based in Bathurst currently freights 250,000 tonnes of product annually into Port Botany, the equivalent of keeping 10,000 trucks off the road.

Managing director Derek Larnach said delayed trains cost money and can mean his company misses vital dock loading times.

“The congestion on the lines at the moment can be a little challenging,” he said.

“We need to be on time every time, 95 per cent of our business is export to Asia.”

Ms Pavey said the Main Western Rail Line Capacity Enhancement program will help rail operators to meet the growing demand for freight on the corridor, reducing the demand for road freight without negatively impacting passenger services that run along the line.

“It means important increased capacity for the minerals, agricultural and interstate freight moved along the western corridor, supplying domestic and international markets,” she said.

Bathurst MP Paul Toole said each loop will be 1.8 kilometres long and will be able to accommodate the passing of trains up to 1.5km in length.

“It will mean more passenger trains like the Bathurst Bullet, the Central West XPT, as well as the Indian Pacific and Broken Hill Xplorer passenger services will no longer be held up by freight trains on the line,” he said.

“The NSW Government has invested more than $1.3 billion in the operation and maintenance of the Country Regional Network since 2011, demonstrating its commitment to this important freight and passenger link.”