Construction of the final section of the Adelaide to Darwin Railway was the final link in a national railway network, built as governments increased their focus on critical rail infrastructure around the country.
The project included:
The project is a Build, Own, Operate and Transfer Back (BOOT) scheme, with lease arrangements covering 50 years’ operations before the railway is handed back to the Northern Territory and South Australian Governments.
This is part of a trend to transfer commercial risk for major infrastructure projects to the private sector.
Under the PPP model, government contributes to the cost of building infrastructure to reflect the broader social and economic benefits such infrastructure brings but passes commercial risk to the operator.
When the original operators of the AustralAsia Railway failed to generate the expected revenue and went into receivership, the original investors bore the losses not the Government. There was no government bailout and the railway continued to operate.
The operating lease was then purchased by Genesee and Wyoming Australia.
Both governments are confident that this investment by the new operators will see the benefits flow to both states as the Freight task grows.