Treasurer Joe Hockey has given the strongest hint yet that the federal government could consider a taxpayer-funded loan for a rail line to Australia's largest proposed coal mine.
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Mr Hockey says the government has been in talks with Queensland Treasurer Curtis Pitt about Adani's Carmichael coal mine, which recently had its federal environmental approval set aside.
He said the talks had focused on a 388 kilometre rail line the Indian mining company would build from its mega mine in central Queensland to coal terminals at Abbot Point near the Great Barrier Reef.
"One of the things they are looking at is how we can ensure that the railway line remains financially viable. I can't give away too many details, but we are working away at that," Mr Hockey told ABC radio on Monday.
Fairfax Media understands the government is considering whether the project could be assessed for a loan from a $5 billion northern Australia infrastructure scheme announced in this year's budget.
While the government is still drafting eligibility criteria, a railway line that would open the vast Galilee Basin in Queensland would fit the mould of projects that could apply for finance.
However, the government has emphasised companies would have to demonstrate their projects would not be viable without taxpayer assistance.
As the government indicates it may support this $2.2 billion rail line, it is still declining to fund the rail link to the second Sydney airport at Badgerys Creek, estimated by the NSW government to cost $2.5 billion.
Fairfax Media lodged a freedom of information request with Treasury for documents relating to the northern Australia fund and the Galilee Basin.
The heavily redacted documents identify Galilee Basin rail lines as projects that could come forward for finance.
Treasury withheld a number of documents on the grounds they could damage relations between a state government and the Commonwealth, could damage international relations, or could interfere with the functions of Treasury.
The former Queensland LNP government had promised hundreds of millions of dollars toward Adani's rail line if it was re-elected, provided Adani made its railway available for use by other companies that developed in the basin.
The new Labor state government took a promise to the January election that it would not contribute any finance for the rail link for the multi-billion dollar project.
"We are doing everything we can to help to get the Adani Carmichael mine open," Mr Hockey said on Monday.
"We are working together to see what we can do to further encourage Adani to continue with the mining process."
The government has come under fire after it announced last week it wants to repeal a section of the Environment Protection and Biodiversity Conservation Act to stop what it has branded "lawfare" by environment groups that challenge large projects.
It came after a Federal Court challenge by the Mackay Conservation Group successfully highlighted a flaw in the government's environmental assessment of the Carmichael project.
The government's proposal would make it harder for third party groups, such as green groups, to appeal environmental approvals, but it looks unlikely to find support in the Senate.
