Wimmera Container Line owner and managing director Rodney Clarke told the Mail-Times another operator was interested in establishing a base at the former freight terminal site in Mill Street, where Wimmera Container Line operated before moving to the Wimmera Intermodal Freight Terminal at Dooen in September this year.

Horsham Rural City Council chief executive Peter Brown confirmed in Monday's Mail-Times there was another company looking at establishing a base in Horsham.

Council is keen to relocate the rail line outside Horsham but the development puts these plans in doubt.

Workers from rail contractors McLeod Rail have been working on the rail track this week in readiness for another company to move onto the site, but the company is yet to be confirmed.

Former MP, Horsham's Bill McGrath, said he could not believe the news.

He said the new freight terminal had ample room and capacity to handle all container movement in and out of the Wimmera.

"For years Horsham North residents have been lobbying to have the transport traffic and rail line moved to the outskirts of Horsham," he said.

"The decision to recommence a container operation at the Horsham North railway yards is kicking dirt in the face of Horsham North residents.

"When does commonsense prevail?"

A Railway Avenue resident, who asked not to be named, said she was upset upon hearing the news.

"A local company has relocated to a new site and they seem to be at a disadvantage now because the old site hasn't been decommissioned," she said.

"There have been people there and it looks as though they are prepping the site for someone to move in.

"If that is the case, I wonder why $17.5 million of taxpayers' money went to developing a freight terminal at Dooen.

"I am not aware of all the facts but this doesn't seem right."

A Horsham North resident, who also asked not to be named, said he had spoken to other residents and everyone was concerned.

"We're going to cop it all again," he said.

"People in our street alone aren't happy about it."

Business Horsham chairman Robin Barber said everyone was shocked.

"We've got to investigate further into the issue. It makes no sense," he said.