I suspect that there could be a case for extending the Gwili Railway as a tourist investment, using Welsh Government funding. This investment would include simultaneous private and local authority investment in providing tourist accommodation and other facilities. A while back, when visiting Carmarthen, I looked at the possible walks from the Gwili, and noticed how badly these were maintained and signposted.
It seemed to me that the creation of that no-longer used concept 'private - public partnership' is the clue here. As far as the direct recreation of a proper rail north south connection is concerned, well, this seems over-ambitious. One thing might lead to another in future, but I think, start modest and develop gradually, seems a more sensible proposition.