The Tasmanian Government has confirmed the operator of a heritage tourist railway will not be penalised for breaking its 20-year deal with taxpayers.
The Federal Group will stop running the West Coast Wilderness Railway in April because of rising maintenance costs and declining passenger numbers.
The company is halfway through a 20-year lease with the State Government which owns the infrastructure.
"My advice that I've received from DIER through the Minister for Infrastructure is there is no penalty for them walking away but what we really want to focus on is the future and what we can all do to work towards finding a new operator," he said.
The original developer says the line can not be left to deteriorate.
He says Federal took over the railway because the previous operator could not make it work.
"[Federal took it over] on the understanding that they may not make a lot of money out of it but it's an important part of the state and they did that and over the last 10 years they've honoured all of the aspects of the lease that they entered into," he said.
Mr O'Byrne says the Government will look for a new operator but has ruled out the freight operator, TasRail, taking over management of the track.
He will talk to the Federal Government and the community about attracting a new operator but the business case needs to stack up.
"The money that's going to be needed, public monies potentially, to get it back and running again is not insignificant."
The attraction's original operator, Roger Smith says the 35 kilometre line must be looked after.
"If they leave it to moulder in the forest then it's going to cost not perhaps $10m or $20 million rolling over four or five years to do the things that are needed."
"It's just if they don't do these works in the future which has to be provided for then the railway will become inoperative."
The Tourism Industry Council is meeting today to discuss the impact of the closure.
Tourism businesses were already struggling due to a downturn in visitor numbers and there are fears some will not be able to survive without the major drawcard of the railway.
West Coast Mayor Darryl Gerrity says the region's economy relies heavily on tourism and he is worried about businesses such as transport, hotels and cafes which rely on the tourists who come for the rail experience.
Despite the Government ruling out a takeover by TasRail, the Cradle Coast Authority is confident the community will rally to save the railway.
Chairman Roger Jaensch says a quick fix is needed while a long term strategy is worked through.
"In order to retain the skilled people and to maintain the infrastructure that already exists, we have to find a holding pattern that buys us the time to find the long-term solution," he said.
"We're heartened by the comments some people have made today, certainly the will of the local people and some encouraging noises from State Government."