railway

WESTERN Australia's Carpenter Government yesterday agreed to a restricted tender process to build new port and rail infrastructure in the state's Mid West region, after surrendering all hope of getting two competing mining companies to collaborate on the project.

Planning and Infrastructure Minister Alannah MacTiernan said the companies - Murchison Metals and Midwest Corp, or their nominees - would be invited in January to submit proposals to build the Oakajee port, north of Geraldton.

The rail component of the project was less clear, with cabinet deciding to offer B&B offshoot WestNet Rail the opportunity to build the associated rail network, but also giving Midwest and Murchison the right to build their own rail lines, even if it meant duplication.

WestNet currently operates about 5100km of rail infrastructure throughout the southern half of Western Australia and crucially owns and operates a link between Mullewa and Geraldton, which would have to be upgraded to meet iron ore demands.

Murchison, backed by Mitsubishi, declined to comment yesterday but Yilgarn Infrastructure, which is aligned to Midwest and is backed by Chinese investors, welcomed the announcement as "a way forward". Midwest said it was digesting the minister's statement.

Ms MacTiernan said the port construction was likely to cost about $1.5 billion and the rail network a similar amount. She denied the all-in rail decision could cause problems.

"We're very conscious of the community's concern that we might have the Mid West (region) criss-crossed with a whole raft of rail (but) we don't believe that would happen because, ultimately, at some point in this game, economic commonsense is going to come into play," she said.

Ms MacTiernan said she was "very disappointed" the Government had been unable to get the companies to work together.

"You will recall that early on they promised that they would work in an alliance," she said.

"Unfortunately, that alliance has fallen apart, so now we have two companies that have quite clearly indicated to us, despite our best endeavours, that they are unable to work together."

She said the new strategy was the best chance of seeing the Oakajee project finally become "something other than a pipedream", although she conceded it was unlikely to be built before 2012.