Kingston Acquisitions Ltd put the train up for sale in November, after the company defaulted on its $4.7 million loan from financier Prudential Mortgage Nominees.
Kingston Acquisitions director Robbie Caldwell said the Kingston railway was the only part of the New Zealand rail infrastructure in private ownership.
Several other preserved railways are operated by societies and trusts.
The then Labour Government bought back Toll NZ's rail and ferry business for $665 million, after several months of negotiations in May 2008.
"We would welcome the Government . . . with open arms," Mr Caldwell said.
He hoped to meet Prime Minister John Key and understood he would be in Kingston next week, to explore a link to Queenstown as part of the $50 million New Zealand Cycleway Project he and the Government are promoting.
The Ministry of Transport did not respond to questions yesterday.
Mr Caldwell said other attempts to the sell the train and associated businesses had failed.
Prudential had vetoed two offers from a US-based boutique train operator Railmark Holdings Inc this year.
Railmark had offered $2.5 million for the train and track in February, with a view to expanding the business.
Prudential was unwilling to allow the company to sell its assets for less than the debt amount.
"We had a white knight willing to come in and operate the train in Kingston, retaining all 20 staff. To me, it was a fair offer, but we had to say no," Mr Caldwell said.
The company's other Kingston land, excluding the track land had been valued at $3.2 million.
Mr Caldwell's brother Ian and associate Phil Kerr operate the train and the Kingston Inn, as Kingston Flyer Steam Train Ltd and Kingston Village Inn Ltd.
The businesses were operating at a profit but the loan made to Kingston Acquisitions several years ago had not been repaid.
The train company's investors were determined to make sure it had a future, Mr Caldwell said.
There was not enough money to operate the train for the coming tourist season, despite group bookings confirmed two years in advance.
The train was likely to "rust" if investment was not forthcoming, he said.
Selling the train was the only way to keep it going.
"If it doesn't operate this year, it would take a lot of time and money to get it up and running again," he said.
The Kingston Flyer has operated twice-daily 14km trips between Kingston and Fairlight, from October 1 to April 30.
