Debt laden Australian railway could be portent for Yukon line

In the recently released $5 million railway feasibility study, the Yukon government identified revenues and costs.

In the recently released $5 million railway feasibility study, the Yukon government identified revenues and costs.

It didn’t evaluate the potential rail line in terms of existing railways, said the study’s project manager Kells Boland.

“We didn’t do a comparative analysis with other railways around the world,” he said.

“This might be something we do in phase two, if it goes ahead.”

But during his technical briefing, Boland did reference Australia’s 3,000-kilometre Adelaide-Darwin line.

“It’s not unlike ours — it, too, was built to stimulate mining,” he said.

Boland looked at the Australian line in terms of tourism potential.

The study didn’t assess its success as a freight carrier, he said.

In the 2005-06 fiscal year, the Adelaide-Darwin line operator’s debt jumped from $36 million to $137 million.

“There is uncertainty as to whether the company will be able to continue,” said auditor KPMG International in September.

So far, the operators have injected $42 million into the project.

The federal, South Australia and Northern Territory governments paid the balance of the $1.3-billion project.

The service was launched in hopes of stimulating trade with Asia.

If built, the Yukon/Alaska line would cost more than $11 billion.

The 1,900-kilometre railway would be built to stimulate resource development and trade.

It could end up hauling more than 50-million tonnes of freight a year and make almost $1 billion in annual revenue, said Boland.

But even operating at capacity, the railway would still be in the hole after 50 years, he added.