Business

Company claims it can build rail $1b cheaper than Adani

Aurizon has also applied to the Northern Australia Infrastructure Facility.
Aurizon has also applied to the Northern Australia Infrastructure Facility. Claudia Baxter

AURIZON believes it can build a rail line through the Galilee Basin to access new coal reserves a billion dollars more cheaply than Adani can.

Yet Adani said it will not withdraw its application to borrow money from taxpayers to build its rail line from its proposed Carmichael coal mine to the Abbot Point port.

Rail company Aurizon applied to the $5b Northern Australia Infrastructure Facility this week, to build a rail line into the Galilee Basin.

Adani launched a similar application months ago.

It was a move an Aurizon spokesperson said it had discussed with Adani, GVK Hancock and other potential participants in the Galilee Basin.

Yet an Adani spokesperson said discussions with Aurizon had "solely related to access arrangements for Aurizon's corridor, which only covers a portion of our planned line."

"We note that Aurizon has endorsed our mine-rail-project," he said. 

"While it's true that we have been holding discussions with Aurizon for a number of years, there is no arrangement or deal that would see us alter or withdraw our NAIF application."

But Aurizon indicated they would deliver a line that would be about $1b cheaper.

This is because it would look to upgrade an existing rail corridor and connect that with the new line, rather than starting from scratch entirely.

Their spokesperson said this would also reduce the impact on local communities, land acquisitions and have less impact on the natural environment and agricultural land.

It also highlighted that, unlike Adani, it was an Australian-owned company.

"Aurizon has continued to support the development of the Galilee but the company wants to ensure it is done on the most prudent basis by minimising cost and time to construct, and that government is provided the opportunity to consider all alternative options in relation to NAIF funding," the spokesperson said.

"Aurizon is a locally based company with demonstrated capability in heavy haulage rail operations and infrastructure development in Queensland. We can provide a common-user infrastructure solution that is cheaper, faster to market, and open to all players."

However, long-term take or pay contracts for the full capacity and at "appropriate rates of return" would be required before Aurizon committed to invest in the rail line.

It's likely to fall to Minister for Northern Australia Matthew Canavan, who is in charge of the NAIF, to decide which company it will lend the money to.

Topics:  adani assets aurizon northern australia infrastructure fund railway

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