Australasia railway: trade won't happen overnight, says study

Wednesday, 14 January 2004

Australia's northern most city of Darwin will move closer to its goal of becoming a trade gateway to Asia this week when the first train runs on the new Adelaide to Darwin railway, according to a forthcoming study by the South Australian Centre for Economic Studies (SACES).

The Centre, a joint applied economics research and consultancy venture of the University of Adelaide and Flinders University, says the railway, combined with construction of a new deepwater container port in Darwin, and an associated business park, will offer an alternative import-export corridor for international trade through the middle of the continent to southern Australia.

But the Centre cautions that these international trade flows will not appear overnight - major international trade flows may take a decade or more to develop.

"The key challenge for developers and governments wanting to promote Darwin as an Asian Gateway for container trade will be attracting more shipping services connecting Darwin to Singapore and also direct to China, and its large and fast growing economy, and the rest of northeast Asia," says Mr Michael O'Neil, SACES Director.

"This in turn will need anchor import or export volumes of reasonable scale in order to justify the services. Once the shipping is in place, there will be opportunity to offer services for those wanting to import or export smaller volumes.

"Another possible development over the long term is the emergence of Darwin as a hub transhipment port for trade in eastern South East Asia, connecting small ports in the region to larger international ports," he says.

Mr O'Neil says domestic market development - that is, the flow of goods to Darwin for domestic consumers via the railway, and replacing road haulage - is a different story.

"The flow of goods for the Darwin and Northern Territory domestic market should become significant almost immediately. There are clear cost and time advantages shipping by rail rather than road.

"And the domestic demand in Darwin and the Northern Territory should grow strongly in coming years, driven by resources, construction and infrastructure and defence projects," says Mr O'Neil.

The new Australasia railway, completed in September 2003, provides a new 1,420 km segment of line from Alice Springs to Darwin.

The line connects to the existing Alice Springs to Adelaide line and in turn, is linked to the eastern capitals of Melbourne, Sydney and also Brisbane to the northeast. It also links with the east west line from Sydney to Perth.


Contact Details

Associate Professor Michael O'Neil
SA Centre for Economic Studies
University of Adelaide
Business: +61 8 8313 4545
Mobile: +61 (0)408 812 032

Media Team
The University of Adelaide
Business: +61 8 8313 0814