A "second city" could be created around a very fast rail train station to help fund a line through the region, Lake Macquarie council has told a federal parliamentary committee.
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The council proposed the idea in a submission to the House of Representatives Standing Committee on Infrastructure, Transport and Cities, which is running an inquiry into options for financing fast rail.
The committee held a public hearing via teleconference on Tuesday.
It heard from the likes of the National Faster Rail Agency, which in conjunction with state governments is investigating upgrades to multiple corridors - including Sydney to Newcastle - and CLARA, a consortium proposing a Sydney to Melbourne line part-funded by the creation of new towns along the route.
Much of the hearing's discussions centred on how to best capture value from land along potential lines.
Committee chair John Alexander said governments had previously failed to garner returns from uplifts in property prices associated with major infrastructure projects.
He cited missed opportunities with Sydney's Metro North West where there were "uplifts 20, 30 or 40 times the value of homes around proposed train stations".
"It's absolutely imperative if we're going to have infrastructure projects to stimulate the economy, we must find every last dollar that can justly be applied to the infrastructure," he said.
The council did not reference a specific location for its "second city", but as an example a 2013 federal study identified a site in Cameron Park for a Sydney to Brisbane high-speed rail line station.
"Very fast rail will trigger transport-oriented development on a ... scale not yet seen in Australia, particularly in areas close to VFR stations," the council said in its submission.
"A transport-oriented development approach to delivering a VFR station in the Lower Hunter could support the creation of a 'second city' for the Lower Hunter and Central Coast, encompassing several businesses, residential, tertiary education and innovation precincts.
"The ability to capture the value of this growth and economic activity would greatly contribute to the cost of delivering the project."
Regional Development Australia Hunter shared a similar vision in its submission, pointing to development around Shin-Yokohama Station in Japan after fast rail was built.
"As a fundamental prerequisite for a faster rail network, RDA Hunter advocates for the preservation of the corridor to enable construction of this transformative project," RDA Hunter executive officer Trevor John said.
City of Newcastle outlined its general support for fast rail, but said it was difficult to offer "considered feedback" given a business case examining potential upgrades to the existing line between Newcastle and Sydney was not yet publicly available.
The Newcastle Herald reported last month that the NSW government was tendering for project managers to complete a detailed investigation building on the strategic business case.
