NOT everyone has followed Opposition Leader Mark Latham in renouncing their doubts about the viability of the new Adelaide to Darwin rail link. Politicians and freight operator FreightLink have been ringing their bells and blowing their whistles over early freight contracts totalling 170,000 tonnes of freight a year, though this is still a long way short of capturing the estimated 600,000 tonnes of freight a year that currently travels this route, very efficiently, by road.

It’s a good start but the cold, wet flannel wielded by several respected economists in reports over the past 10 years says that if all this freight were converted to rail, which they consider impossible, it still wouldn’t represent an adequate return on $2 billion spent building the line (including the earlier line to Alice Springs).

If the northern rail link is 90 years too late and its economic benefits are dubious, it’s as if some sort of missing link has now been filled in. The Prime Minister calls it nation building; others might say “it’s about time, now let’s get on with it.”

Which raises the leading question of what has to happen now that the rail link has been completed for South Australia to gain maximum benefit from it?
Chris Corrigan, whose Patrick Corporation jointly owns rival freight business Pacific National, is predictably sour about the Adelaide-to-Darwin rail link, saying its chances of making a profit are smaller than a tick’s testicles.

He’s joined, though, by more measured responses from economists such as Dr Tony O’Malley, chairman of SA’s Business Vision 2020 project, who has followed the railway’s fortunes closely since he prepared a report on its viability for former treasurer and transport minister Frank Blevins in 1990.

O’Malley concluded only two things could pull it off: enormous population growth along the route, which wasn’t going to happen; and finding another 2 million tonnes of freight from somewhere.

He’s angry and critical of the train of events that has finally seen the line built. “The economists of Australia should hang their heads in shame,” he says. At the same time, though, he says those who were opposed to the railway weren’t listened to.

“Many of those opposed to the railway were simply gagged by (former premier) Olsen,” he says. One example that never saw the light of day was a 1996 report by the Transport Policy and Strategy Group that O’Malley says was frozen by Olsen because it showed there would be negligible high-value freight from SA industry that might benefit from any likely time savings.

Other economists, such as Michael O’Neill, director of the SA Centre for Economic Studies, puts it a little differently: “It was more that we were not invited in,” he says. “I could never find anyone who was invited to look critically at the economic assessments – certainly the Centre for Economic Studies wasn’t. Everyone has made it hard to have an independent analysis of the viability of both freight and tourism on the line.”

The Centre is now trying to redress this with an Economic Issues Paper called “Gateway to Asia – Implications for Australian trade of the Adelaide to Darwin railway and Port of Darwin developments”, which should be released early in February. In particular it will consider the value of the railway from the view of Asian freight shippers.

O’Malley’s opposition is ironic because one of the signatures on the 1907 NT Surrender Act, in which SA traded the NT in return for the Adelaide to Darwin railway line, belonged to his great uncle and then SA Attorney General, Patrick Glynn. One of the problems was that there doesn’t seem to have been any mention of a construction deadline.

“At that time it made eminent sense but not any longer,” O’Malley says, adding that claims the line might be useful in the defence of Australia are ludicrous. “The last time a railway had any strategic military importance was when Kitchener used the line from Egypt in the siege of Khartoum. And how many bombs would it take to knock the whole thing out?”

O’Malley has collected a half-metre-high pile of reports opposed to the project, including a 400-page report by Neville Wran’s Committee on Darwin in 1995, which said that if such a huge chunk of Australian savings was used to build it, it must make a difference.

“There’s nothing you can move to Darwin now, with the railway, that you couldn’t do 10 years ago,” he argues. He doesn’t see any cost savings – just double or triple handling of containers as they move from truck to rail to ship. Given that sea freight to Singapore from Melbourne is about the same cost as Darwin to Singapore (a figure that obviously may now change), the cost of the extra handling and rail freight doesn’t make sense.

So we must look at what happens now. One undersung benefit has been the construction triumph by ADrail, the construction consortium pulled together by local firm KBR, which managed the project and brought it in five months ahead of schedule with a long list of homegrown technical innovations.

WHILE the success of the new line almost certainly will put the future of Port Adelaide under pressure and focus sea freight on Port Melbourne, there will be an undeniable tourism benefit.

The SA Tourist Commission is cockahoop that at last it has a new product to sell – potentially as valuable an “authentic Australian experience” as another Barossa, Flinders or Kangaroo Island. It could realise Adelaide’s potential as starting place for an Outback/Aboriginal experience with its SA Museum and Tandanya assets and a route north taking in the Flinders, Alice Springs and Uluhru, Katherine, Darwin and Kakadu.

No tourist-increase projections are available but the figure of $16 million in advance bookings for the next 12-18 months by late January (and rising by about $1m a week) is beyond expectations. With up to 90 international media on the first Ghan tourist train on February 1, international interest is high in what is now the world’s longest north-south rail line.

Perhaps SA’s attention should turn to building the relationship with the NT – something that both Premier Rann and Chief Minister Claire Martin seem keen to do. A Memorandum of Understanding was signed between the SA and NT in 1995 and promptly disappeared without trace. Some thought its mantle had been taken over by the Rail to Asia group, whose role was to extract as much benefit for SA business during the line’s construction (worth nearly $450 million) but it wasn’t so and that body has now expired.

Through the MOU, the NT built great relationships in South-East Asia, especially with Jakarta through its envoy, former Indonesian Cabinet Minister Frans Seda. However it didn’t have a lot to offer the region – though SA did: education, water management, health services, agricultural technology, manufactured goods and so on.

The answer would have been for SA to piggyback on the NT’s relationships with Asia but it never happened. Now, there’s talk of a new MOU, presumably to achieve the same goal, although the NT is no longer our poor cousin, with billions of dollars of investment pouring in, mostly in the minerals and resources industries.

The railway may never make a dollar, or at least not the sort of dollars economists would consider adequate for such an investment. It may have downsides, such as the Federal Government saying that SA has had its share of the public purse.

But it may be the making of SA, if enough political and commercial will is applied to ensure our industries grow and funnel their goods and services north through a stronger relationship with the NT. We’re not looking at the market of 200,000 Territorians, but 200 million Indonesians and many more beyond.

The earlier MOU may have been an important opportunity missed but the railway can provide the impetus to recreate that opportunity and build on our existing relationships with the NT and Asia. SA can’t let Chris Corrigan be right; much rests on what the SA government plans to do to prove him wrong.