The train includes two Pacific-type locomotives as well as wooden passenger stock of the pre-World War 1 era.
Previous approaches to Development West Coast, which did a feasibility study about two years ago, drew a blank.
However, Mr O'Connor said yesterday it was a prime opportunity to leverage tourism opportunities and bolster the regional rail link, run in conjunction with the Tranz Alpine train drawcard.
"I've heard the cautious views on it and understand the challenges, but given the current dilemma we face with the temporary loss of the Tranz Alpine ... this would be a tourist attraction that will lift the profile of Greymouth and the West Coast.''
He said there were obvious synergies with the existing engineering employment in the area, and the existing steam and coal heritage and Shantytown.
Having the train "hissing and steaming'' in the centre of Greymouth would be another feather in the cap for the area,
which needed "soft'' heritage tourism options alongside natural visitor attractions.
A Greymouth base gave multiple options to run trains to Hokitika, Reefton, the Buller Gorge and Moana.
"I think it's essential we take a serious look again ... in my view it's a no-brainer,'' Mr O'Connor said.
"We've got capital there that can be used to lift the profile of the West Coast. In the end, there has to be a group of capable people who can put a proposal to DWC for a suitable joint venture.''
Agent for Kingston Flyer owner Adrian Chisholm, of Tourism Properties, said the train, stationed at Lake Wakatipu, was for firm sale at $2 million as one asset, including the land and buildings.
Interest was high, but mainly from people wanting parts of the asset, he said. If a West Coast consortium did want to buy the package, the land would be easily on-sold, Mr Chisholm said.
Some West Coast interests had canvassed what it would take and they "should keep the pressure on'' as he saw it as a natural fit with the region, given its steam and coal heritage.
Mr Chisholm said the Queenstown Lakes District Council was at present lowering the heritage covenant restrictions that prevented the train from being taken out of the district.
The existing location at Kingston, early in the 12-hour-long return tourist route between Queenstown and Milford, was untenable given time constraints of the tourist market.
"It's in the wrong place. It would be a good great attraction for the West Coast ... I have every steam buff in the world ringing me to work on it or buy it,'' Mr Chisholm said.
- Greymouth Star