Read this - It is very disappointing to see how wasteful the government was in the closure of the line...
http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/0430636eb8f221a3ca256ec80017fba8/$FILE/sub%20215.pdf
thanks and yes clearly some questionable actions by the Carr govt and this was limited to this branch.
For the record,
I didn't agree with closing the line then or now, but you need to question the viability of a 150km long branch line for 1 train a day and something and to change. Problem is once closed it was unlikely to return as the line was indeed questionable to remain open. The loss of both freight and Ritz Rail didn't help and the line was approaching some major upgrades over coming years with many old timber trestle bridges needing to be modernised.
I have no issue with the use of XPT technology in NSW, however the North Coast services are one area where this does fall over as both Brisbane and Mur'bah would have benefited from a double daily split, with half a train continuing to each terminus. I'm sure this would only boost numbers, even if small and reduce busitution or needs for it to purely Mur'bah to Surfers Paradise.
This would also provide a daily return option for users from North of Grafton to Brisbane and Mur'bah/GC. To do this the XPT would have needed to be replaced with DMU : DMU operation like NW service. Or the train and Casino track layout changed in some way that spiting the XPT at Casino was practical. I think this could have been done if the XPT sets were captive to the North Coast.
I still think the Casino XPT should terminate at Lismore.
The steam train option is but a pipe dream, a rail trial would be better and more practical.