A SCOPING study into the 600km railway line from the Territory to Mt Isa in Queensland will look at the economics of the project including the gauge it will run on.

Railway gauge is a major issue because Australia does not have a standard railway gauge system.

Queensland operates off a narrow gauge while the Territory uses standard gauge.

Port Jackson Partners, who completed work on the North East Gas Interconnector, will do the economic modelling which will include an engineering and commercial study. Six firms responded to the scoping study request.

Chief Minister Adam Giles said the Northern Territory Government was currently working with its Queensland counterparts on the railway link to create a corridor. Queensland is not contributing to the cost of this scoping study.

“This is a building Australia project. Potentially it can help protect the Great Barrier Reef in the long, long term. Eventually you could bring cargo through Darwin and save days in sailing time,” he said.

“At the same time the Port Jackson Partners are looking at the economic modelling, what you need to do to get this to stack up, we are also working conjunctively with the Queensland Government on starting the process of clearing railway corridors and getting environmental approvals and getting the pathway right.”

If the economics of the railway link does not stack up the corridor will be protected.

The Darwin to Alice Springs railway cost $1.2 billion to build and is 1100km in length. The Territory Government contributed nearly $500 million into its construction.

Byron Pirola, director of Port Jackson Partners, said the challenge was not the engineering but the commercial case. Industry sectors including defence, agriculture and the resources would be prime commercial targets.

“Our job is to get in quickly and, with the existing engineering work and all the estimates you can, is to work out if you can get close to a value creating project for the country and the government,” he said.

“Is there the demand? How does this economic case stack up? How does this rail link compete with existing transport? Is there enough volume? Is it the right time?

The scoping study will determine the cost of building and how to get to the next step. The current changes in Asian market with China indicating it wishes to build a “maritime Silk Road” will be taken into account.

“There will be judgments about the type of engineering that will be required and this will impact on cost,” Mr Pirola said.

The scoping study is expected to be finalised in November this year.