The disused rail line has been recognised for some time as a great community asset. In 2004 a group of interested locals began planning the construction of a rail trail on the old rail line. A scoping study was conducted which included extensive consultation with local businesses, community groups and land owners. The study concluded there was significant support for the rail trail, including the local council (Palerang), and that economic benefits from users of the trail would likely repay the cost of construction in a few years.

The study also identified issues from land owners that a full scale feasibility study would need to address. An application for the Molonglo Recreational Trail, of which the Bungendore to Captains Flat Rail Trail was one section, was submitted to the Australian Tourism Development Program in 2007. The Molonglo Recreation Trail was an ambitious and complex project, involving the disused rail line in NSW and walking/riding tracks to be developed in the ACT. Unfortunately the application was not successful due to lack of available funding and to difficulties relating to decommissioning the rail line.

The abandoned rail line, constructed in 1939, was used to transport ore from the mines around Captains Flat and was closed to all traffic in 1968 after mining ceased in 1962. There is no expectation that it will be reopened as a railway.

The picturesque 32km route begins 8km from the village of Bungendore, runs across the farmland plains of Lake George, along the Molonglo Valley and across the Molonglo River on the impressive Foxlow Bridge. It passes through native forests in the rugged Tallaganda region and climbs just 150m overall to arrive at the old rail head 1km from Captains Flat. The rail line passes a variety of railway heritage items.

Bungendore is a thriving country town with cafes, galleries, independent shops and a range of accommodation. Hoskinstown, a small vibrant community, and Captains Flat, with extensive infrastructure left from its mining boom, are smaller.   The Captains Flat pub boasts the longest bar in the southern hemisphere and has accommodation. Free camping is available, along with a pool, oval and tennis courts.

All three communities are excited about the rail trail as a community asset that will provide safe recreational activities for all, especially young families. They also see the rail trail as the best possibility to stimulate economic growth. Currently there are very few employment opportunities in Captains Flat, but the rail trail would certainly turn that around and even create new business opportunities in Hoskinstown.

Cycling is a popular activity in the region. Canberra is 35 minutes from Bungendore. According to surveys in 2011 and 2013, 47% of ACT residents ride at least once a year. 34% ride at least once a month. 24% ride at least once a week. Bungendore also has a number of regular cyclists. The growing numbers of families in Bungendore, Captains Flat and Hoskinstown with children would be users of the trail. Putting these numbers together suggests the rail trail will see significant use. Use of the trail by horse riders will be explored in a feasibility study.