Too damn quick!

http://archives/rail2.jpg (881581 bytes) Earlier this afternoon we drove down towards Palmerston (Darwin’s satellite city, more commonly known locally as Palmerslum) to inspect progress on the Darwin-Alice Springs Railway. Track-laying reached Palmerston on Friday and was supposed to be due to end 10 km further north at East Arm Port next Wednesday. As my parents are due to arrive here Tuesday morning for a couple of weeks, we thought it might be nice to take them down and watch a truly historic event: the completion of the north-south rail link promised ever since South Australia handed over the Northern Territory to Commonwealth control in 1911.

Unfortunately, we were too late! They’ve already just about finished. As we arrived, the automated tracklaying train (pictured) had just finished laying track across Berrimah Road to within a couple of hundred metres of the intended passenger terminal near East Arm port, and they were just installing the level crossing warning lights on Berrimah Road. So the railway is to all intents and purposes complete, some 7 months ahead of schedule. It looks like they’re going to leave that last couple of hundred metres for the scheduled theatrical completion ceremony on Thursday, even though they could actually have finished it today if they’d wanted.

It remains to be seen whether the Darwin-Alice Railway will be a commercial success, and whether it will act as a catalyst for a truly sustainable industrial economy in Australia’s north. But the sheer speed with which it’s been built makes this an astonishing engineering feat, and unquestionably a great exercise in nation-building. I’m sure this post will generate the usual cynical comments, but as a Territorian for more than 20 years, I can’t help feeling just a touch of pride and even excitement. Then again, I even got excited when McDonalds opened its first outlet in Darwin.

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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Michael Jennings
2021 years ago

I think my position is that I am unconvinced by the economic case for the railway, but on the other hand it would certainly be fun to go on the train some time. I am assuming that “seven months ahead of schedule” also means it is significantly under budget, too.

So when did McDonald’s come to Darwin?

cs
cs
2021 years ago

Must say, I’m pretty happy about this one too Ken. It is also an interesting case study in development-led economic activity … if you build it, will they come? … I bet it is a success (assuming competent management), proving the flat-earth-brigade wrong yet again … but I don’t count the win as being in the bag, and it will be interesting to see. Could be the food for a Fin column here.

Scott Wickstein
2021 years ago

Must admit I’m not that thrilled by the idea of a three day train ride through the desert. I will stick to the “Orient Express” I think.

Homer Paxton
Homer Paxton
2021 years ago

where would the N/T be today without the white Elephants we have had to pay for?

Enjoy

Graham
2021 years ago

I don’t think bulk freight will go too badly, compared with road trains. It’s got to be more viable than Alan Jones’ Munchausenesque idea of piping water from the tropics to NSW…

Some of the Tin Foil Hat Brigade which I am unfortunately acquainted with seem to be under the impression that the railway is being built and operated by a subsiduary of Halliburton. True or not?

os
os
2021 years ago

Yairs, I love to take the piss out of those bloody Victorians, useless Cornstalks, hopeless Croweaters, lunar Bananabenders … but when I realise that the things that unite us are far greater than the points of difference, why I get all emotional. One more great train journey of the world. Onya.

Geoff Honnor
Geoff Honnor
2021 years ago

Well I’m a hopeless romantic about this sort of thing – and an unreconstructed nation-builder to boot I fear. Bugger the economics, there’s something profoundly right about a railway from Adelaide to Darwin – even if it’s about 100 years late.

Kellogg, Brown & Root – which is indeed part of the Halliburton group – heads the construction consortium, but I doubt whether it’s part of some dastardly Cheney vision for Total World Domination….”today Tennant Creek! Tomorrow The World!!!

Pity it’s not terminating in a Northern Gate at East Arm, like the Gateway to the West that soars over the Mississippi at St Louis – beats the Big Banana any day.

Ken Parish
Ken Parish
2021 years ago

Halliburton itself even has a headquarters in Darwin, right across the road from where we bought all our bathroom fittings for the recent renovations. I never saw Dick Cheney sneaking in or out though. Still, there must be somthing sinister. What about those persistent rumours of a US military base being secretly planned for Australia’s north? Hmmm.

Michael Jennings
2021 years ago

Transcontinental freight railways can make plenty of economic sense, particularly in these days of container shipping which makes loading and unloading freight froms ships a trivial exercise. The railway that goes from San Diego across Texas to somewhere or other on the east coast is the most important competitor to the Panama Canal. If you are carrying standard shipping containers that far then a train is certainly better than doing it by road. I suspect though that if you are carrying freight from Sydney, it is better to put it on a ship in Sydney, as the rail route is such a long way. This may be true from Melbourne also. And I rather doubt there is enough freight actually coming from Adelaide to justify it. This is an awfully long railway to have been built for a couple of trains a day.

Michael Jennings
2021 years ago

And of course I today bought an economy return plane ticket from London to Sydney. It cost less than a first class one way train ticket from Darwin to Adelaide and it takes rather less time, too.

woodsy
woodsy
2021 years ago

I suspect that many of you don’t know that the railway is an integral part of the defence of the north. The ability to quickly move vast amounts of very heavy military equipment underpins the raison d’etre. And BTW, the operators have pre-sold $5 million worth of passenger tickets so some-one must think it’s an interesting journey.

Michael Jennings
2021 years ago

woodsy: that’s a very fair point. This quite possibly does justify the government’s contribution to the cost.

rdb
rdb
2021 years ago

Without knowing the costs, couldn’t it make a big
difference for incoming freight – unload at Darwin
and transfer by rail to Adelaide and the East coast
rather than unloading ships at Melb. or Sydney?
Wouldn’t that be quicker at least for imports from
Asia?

cs
cs
2021 years ago

I just heard Chris Corrigan describe the likely returns on the railway as “smaller than a tick’s testicles”. Not a bad turn of phrase, even if he is a well known liar. I guess it doesn’t bode well for the business plan of our aspirant transport tzar.

Ken Parish
Ken Parish
2021 years ago

Chris (and others),

As the operator of the main competing long-haul rail line (from Perth), and with most of his interests involved with stevedoring out of the major ports of Sydney, Melbourne and Brisbane, you’d hardly expect Corrigan to be extolling the virtues of the Adelaide-Darwin line. They’re his competition; it’s a bit like expecting Qantas to say nice things about Virgin Blue entering the market. The NT government has given the AdRail/FreightLink consortium operating rights over the Darwin port so it can run freight as a fully integrated operation, presumably effectively excluding Corrigan.

That said, I find it hard to believe that merely supplying Darwin and other towns along the line could ever hope to turn a profit in the immediately foreseeable future. However, the consortium’s base projections claim commercial viability based purely on domestic freight (excluding expanded mining activity or “landbridging” exports/imports (claimed to be a potential major growth source for “time-sensitive” freight, because it’s significantly quicker to get freight to or from most southern cities to most parts of Asia using the railway and shipping into/put of Darwin than just shipping straight into/out of Sydney/Melbourne/Brisbane).

Since the private consortium building and operating the railway (for the next 50 years) was able to ante up over $700 million in equity and loan funds, presumably both they and their bankers have a very different view from Chris Corrigan.

Here’s an extract from an AdRail consortium fact sheet:

Considerable research has been done by Governments and the private sector in determining the economic viability of the line. The 1984 Hill report found there would be a benefit/cost ratio of between 0.28 and 0.31 (at 7%).

The Wran Report, commissioned by the Commonwealth Government in 1994, found the cost benefit ratio for the Alice Springs to Darwin Railway to be .78 (8% discount rate) and 1.09 (6% real discount rate). The Wran Committee said the project should be economically viable by 2005 and was a matter of “not if but when”.

The Wran Committee’s independent consultant revised these figures in 1995 when provided with new Australian Bureau of Statistics data, finding the cost benefit ratio was 1:27. In 1999, Booz-Allen and Hamilton found the cost-benefit ratio was 1.88 (which means that every dollar invested should return $1.88).

The strongest endorsement came from the market in 1997, with 30 tenders received from 60 national and international companies submitting expressions of interest to build, own, operate and transfer back the railway.

At the time of the Commonwealth Agreement on Government funding, in October 1999, both the Asia Pacific Transport Consortium’s banker (Macquarie) and the AustralAsia Railway Corporation’s banker (Deutsche Bank) agreed the project was “bankable”.

Asia Pacific Transport has done its own freight studies based on domestic freight and has interviewed prospective customers. The base case – or existing domestic freight – is the basis on which bankers consider supporting such a project and its bankers were satisfied with the viability of the project. Their estimates do not include likely new freight, such as that generated by mining and ‘landbridge’ freight (i.e. freight transhipped from ships at East Arm Port to the railway).