Aurizon on track to beef-up Territory railway

The owner of the Alice Springs to Darwin railway is investing tens-of-millions into the Territory to boost the struggling asset. Read what’s planned.

Just months short of its 20th birthday, the Tarcoola to Darwin railway is in the middle of a revitalisation its new owners hope will breathe new life into the underperforming asset.

About 30 investors attended a presentation in Darwin on Tuesday where rail-owner Aurizon’s chief executive Andrew Harding laid out the company’s short to medium term plans – and the Northern Territory is expected to play a big part.

Aurizon finalised the purchase of the railway a year ago and is spending up to $350m on upgrades and improvements across its network as well as rolling stock.

In the Territory, it has just begun with a 30-year rail concession lease and stevedoring license at Darwin Port and the $26m purchase of two mobile harbour cranes which are expected to arrive in the Territory shortly.

Andrew Harding chief executive Aurizon

Aurizon chief executive Andrew Harding readily acknowledges the railway line, which was first proposed in the late 19th century and finally opened in January 2004, has underperformed and failed to meet the potential implied by its $1.2bn price tag.

About one train a day comes back and forth between Darwin and Adelaide rather than the dozens of vehicles that operate on Aurizon’s busy east coast routes.

This is remarkable because it’s the only major line in Australia where vehicles can travel at 110kmh.

The plan behind the railway’s re-emergence has its foundations in the past – development of landbridges linking international freight forwarders with Darwin Port by road to the main Australian capital cities.

Landbridging and the economic activity this would bring was one of the incentives used to persuade former Liberal prime minister John Howard to invest almost $200m from Commonwealth coffers to the project.

John Olsen and John Howard about to turn the first sod of the Alice Springs-Darwin railway on July 17 2001.

The plan was to freight and unload goods to Darwin Port for distribution around the rest of Australia, but then disappeared without a trace as soon as the railway opened.

While the train into Darwin is well used, carriages on the return trip to Adelaide generally track at about 80 per cent empty.

Mr Harding said landbridging means distributors will be able to move freight a week faster in some major markets.

“There’s a higher demand for shorter delivery times and we’re interested in not competing through Darwin with east coast ports for high-value products where there is a desire to get there faster,” he said.

“We’ll be offering a containerised solution which actually allows containers to get from Shanghai to Melbourne in 10 days. That market doesn’t exist anywhere in Australia at the moment to get to Melbourne, so we’ll be creating something new.

Floods in South Australia closed the Alice Springs to Darwin railway

“We did the research to identify opportunities and found there were opportunities to deliver freight more quickly. There is an interest in a higher-value premium service that gets products quicker to the east coast.”

The second part of Aurizon’s Territory strategy is bulk transport of goods between Darwin and Adelaide.

Before buying the line from One Rail, Aurizon identified about 250 potential resource, agricultural and other projects about 300km either side of the line between Darwin and Adelaide that could potentially deliver business.

Aurizon singled out a number of NT resource assets including Arafura Resources rare earths, Avenira phosphate, KGL Resources copper, Lincrestand Northern Iron iron ore, Tivan vanadium and Verdant Minerals’ phosphate.

Floods in South Australia closed the Alice Springs to Darwin railway

While the railway will remain a single track operation into the foreseeable future, improvements including real-time rainfall and water depth measures are being installed to enhance reliability and safety.

“Aurizon is Australia’s largest rail freight operator. The NT and the iconic railway line is the premier part of our growth aspirations for the future both from a mineral exporting and agricultural exporting dynamic,” Mr Harding said.

“We also believe based on a shorter seven-day delivery time we can land containers on the east coast of Australia, you’ll see a massive step-up in the importation of containers through Darwin and then they’ll go out through other states and countries.”

Aurizon has up to 700

The NT and South Australian governments contributed a combined $368m and the remaining $700 came from private investors including giant American company Halliburton.

Aurizon has about 700 engines and 15,000 containers servicing Australia’s largest rail network.