Kiriana Buffett was standing near the entrance to the carriage when the bar burst in, narrowly missing her head after she ducked underneath it.

"I just remember seeing it punch through the floor and then towards me – I don't know what happened next," said Ms Buffett, who sat in shock for 20 minutes after the incident. "Someone said it slowed down but I didn't see it go slow at any stage. I'm pretty lucky to be alive actually."

The chief executive of Sydney Trains, Howard Collins, said the bar that broke through the carriage was a piece of "metal channelling" attached to a concrete walkway near Edgecliff Station.

"It was a corner piece of metal, literally that covers the edge of the concrete," Mr Collins said. "But it is too early to say this has anything to do with the actual cause of it."

He said the derailment may have occurred through "either something connected to the train which has damaged the infrastructure of the track, or it was something on the track".

The bar came through the third carriage on the train, causing the wheels of that compartment to derail.

The Transport Management Centre said all services on the T4 Eastern Suburbs and Illawarra Line had returned to normal by Thursday morning.

"Incident response crews from Sydney Trains worked overnight to get trains running again. All services have now resumed," a spokesman said.

Earlier, Mr Collins said he did not believe the incident was the fault of a systemic problem with Tangara trains. "If there is something wrong with this train we haven't found anything unusual, we don't suspect it is a fleet issue."

The Eastern Suburbs line was closed between Martin Place and Bondi Junction immediately following the incident, with passengers reporting delays and congested platforms at major stations such as Town Hall, but the Transport Management Centre said it was unaware of any platforms being closed.

Ms Buffett said passengers detected a burning smell from the moment they boarded the train.

"We all knew something was wrong from the beginning," she said.

"When we started moving there was really loud knocking all the way, and when we stopped at Edgecliff it was like a mad explosion. I saw it come through the floor, and when it came through the floor it just went over my head."

There were about 700 passengers on board the train. They were evacuated at about 6pm on to a nearby train heading in the opposite direction.

One passenger, Peter Pulu, said: "It was just like a monster coming up from the floor. It was not that fast. It went up and hit the roof."

"It was terrifying," said another passenger, Nicola Walsh. "There was a major smell of burning rubber.

NSW Transport Minister Gladys Berejiklian is on leave.

with Annie Dang

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