It was part of a morning of funding announcements, including $1 million for works at Lithgow Public School. 

The railway works covered by the allocation will include clearing and resealing the car park, refurbishing the amenities building and the crossing, track works and the installation of two electric charging stations.  

Zig Zag Railway chairman Lee Wiggins said the goal was to have the railway reopened for passenger trains by its 150^th anniversary, which would be in October next year. 

"There’s a lot of work to be done between now and then,” he warned.

“It's critical for this money to come from the State Government – and to upgrade the car park and the toilet facilities is critical for our return to operation,” he said. 

“Without the car park seal, without the facilities upgraded, it’s probably not possible to do it in any short time frame. It would still have to be done but this money means that we can do it that little bit quicker.”

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It is estimated it will take two to three months to repair the track to allow rolling stock to access key parts of the track around the station. 

“And then we can start getting all our building and our materials in to fix other areas and get all the damaged stuff from the bushfire out and then we’ll have a functional railway all the way back to Clarence,” Mr Wiggins said. 

Trains have not run to Clarence since June 2012. The area was significant damaged by bushfires in 2013, which destroyed carriages, the workshop and accommodation onsite. 

The hardships have not dampened the enthusiasm of the volunteers, however, who Mr Wiggins said continued to dedicate between 600 and 700 hours a week to the project. 

“This couldn’t happen without them,” he said. 

In announcing the funding, the Premier said she thought the plan was “a fantastic idea”. 

“It’s not just fantastic for Zig Zag, it’s fantastic for NSW. It’s going to generate a lot of tourism,” Ms Berejiklian said. 

“We hope this is the start of Zig Zag coming into its own, reaching its potential and to become a wonderful place of destination and stopover… for all of NSW.

“Hopefully the next time I’m here I’ll be seeing a lot of progress.” 

Bathurst MP Paul Toole said the Zig Zag Railway had the potential to add significantly to the region’s tourism economy. 

“Everybody knows that by reopening the Zig Zag, we are going to bring tens of thousands of visitors back into the community of Lithgow and that’s actually going to support businesses, it’s going to support the local economy and it’s also going to go towards creating jobs.”

Lithgow City Council mayor Ray Thompson welcomed the announcement. 

“This is most probably one of the most unique pieces of engineering [of Australia’s early history]… Of all the great tourism things we have in Lithgow, this is probably the most important, so we need to get it back on track” he said. 

Cr Maree Statham said seeing the project get support was very satisfying. She said she knew the Premier never visited without having a “purse full of money”. 

“But I didn't think she’d have this today,” she told the crowd gathered at the station. 

“When the fire happened I was down here regularly and started lobbying Paul Toole and the federal government and Paul has taken this on – he’s had many many phone calls from me over the last six years,” she said. 

“At one stage I thought there was no way it was ever going to get up and running again but because of the NSW State Government and Lithgow City Council pushing and pushing and pushing [it will].”