In 1995, based on mutual self-interest in seeing the establishment of a transcontinental trade route, a Memorandum of Understanding was signed between the South Australian and Northern Territory Governments.
This led to the establishment of the AustralAsia Railway Corporation in 1997 under the chairmanship of prominent South Australian businessman Rick Allert and a board of South Australian and Northern Territory businesspeople and senior government staff.
The Corporation’s Chief Executive Officer was Paul Tyrrell, a relentless promoter of the project over many years.
The Corporation’s role was to manage contractual arrangements for the project and ensure all the necessary building blocks were in place, including government funding and a third party access regime that made it sufficiently attractive for a commercial operator to run the line.
After a lengthy tender process, the Asia Pacific Transport Consortium was selected as the preferred bidder in 1999. A complex contractual arrangement meant it was July 2001 before the first sod was turned in Alice Springs in 2001.
The Northern Territory, South Australian and Australian Governments contributed up front funding of $165 million, $150 million and $165 million respectively to ensure the project was commercially viable, recognising the social and economic benefits of the railway while passing on commercial risk to the private sector.
The remainder of the $1.3 billion design and construction costs came from the Asia Pacific Transport Consortium, which comprised industry heavyweights such as Kellogg Brown and Root (KBR), John Holland, Macmahon Holdings, Barclay Mowlem, the Australian Railroad Group and financiers National Asset Management and Colonial First State Investment.
In January 2001, another $79 million in standby funding was provided by the three governments on commercial terms.