Friday's multi-million dollar announcement by the Federal Government will explore a business case for fast rail between Parks and Sydney through Orange, Bathurst and Lithgow.

The government's Australia' Future Population plan, that aims to take population pressure off big cities and "support the growth of regions", is focusing on rail connections between major cities and regional hubs. 

However, ORAG committee member Neil Jones said while the group welcomed the commitment of funding, he said it was "long overdue". 

Mr Jones said the announcement did nothing to provide services Orange was crying out for. 

"ORAG has identified urgent rail needs for the electorate including seamless, daily passenger services to Sydney," he said. 

"Even adding a second Bathurst Bullet, there's no connection to it from Orange ... there's a pressing need for a direct service to Sydney."

Mr Jones also said the timing of Friday's Federal Government announcement, one day before the state election, was interesting. 

Federal Member for Calare Andrew Gee said the business case would determine the government's priorities for construction and further funding and said he was "excited" the route was being assessed. 

"This initiative is all about easing congestion in the big cities while at the same time encouraging growth in regional Australia," Mr Gee said. 

"If we want to keep encouraging decentralisation and if we want to keep reducing the tyranny of distance between the city and the bush, fast rail is a great way to do it.

"I'll certainly be encouraging all of our local councils and regional development organisations to get involved in the formulation of this business case because I think it's a real opportunity for the whole region for both passenger and freight services."

The Central West rail announcement is part of a $40 million dollar spend on assessments of five rail corridors, three of which are currently being funded by the Federal Government. 

The Australian Government will create a National Fast Rail Agency to guide the work, determine priorities based on the assessments, work with state governments and communities and the private sector and provide innovative finance solutions.

The Agency will be established by 1 July, 2019.