Australia to forge railway across outback's dead heart

It has been talked about and fought about for more than a century. Now, at last, one of the great railway pipe dreams of modern times may be about to happen.

The railway line in question is planned to run through some of the world's most remote, barren and inhospitable land, from Alice Springs to Darwin, almost 1,500km across the "dead heart" of Australia's outback.

From tomorrow, the Australian government will call for expressions of interest from international companies to build, own and operate this railway that has been part of Australian folklore since it was first proposed in the 1870s.

This follows an announcement by John Howard, the Australian Prime Minister, that the federal coalition government would spend A$100m (pounds 47m) on building the railway between the two outback towns. The governments of South Australia and the Northern Territory have each committed A$100m, leaving most of the estimated A$1.2bn construction costs to be found from private entrepreneurs.

The reaction since Mr Howard promised the federal money on Saturday has been a mixture of excitement among diehard railway buffs and scepticism from hard-nosed economic analysts, who say it will turn into one of the greatest white elephants in the history of railway-building.

The Alice Springs-Darwin line was first suggested in Australia's colonial era as part of a grand vision of a 3,000km line that would link the continent from south to north, enabling it to tie in to the lucrative markets of Asia just across the sea from Darwin.

An east-west transcontinental line was built early this century, connecting isolated Western Australia with the populous eastern cities of Sydney and Melbourne. But the north-south dream remained just that.

A line north from Adelaide, through sandhills and desert scrub, was opened in 1929. But it finished at Alice Springs, and various reports and inquiries since then - often commissioned by federal political leaders as elections approach - have recommended that it would be economic mad ness to finish the line up to Darwin.

But in the 1990s, railways in Australia, as elsewhere, are undergoing a revival. The new argument goes that Darwin, whose port is being hugely expanded, could become Australia's main entry point for sea trade, and that the new railway line could become a high-speed freight link with the rest of the country, slashing days and even weeks off journeys to Japan and other Asian centres from existing, inefficient ports in Sydney, Melbourne, Adelaide and Perth.

There are also two elections pending, one in the Northern Territory, the other in South Australia. The conservative Liberal Party that Mr Howard leads in Canberra also holds power in Adelaide, the South Australian capital; its equivalent reigns in Darwin, the Northern Territory capital.

But Mr Howard sounds serious. The federal money he has promised will come from a so-called Federation Fund of A$1bn that his government has set up to fund projects of national significance leading up to the centenary of Australia's federation in 2001.

If the railway does get built this time, it will need a lot of freight to make it pay its way. The route through the Northern Territory contains less than 1 per cent of Australia's population of 18 million, so there will be very few paying passengers along the track.