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Heritage trains in Sydney

Keith Audet, director and project manager of 3801 Limited, talks about the challenges the company faces over the possibility of not controlling their workshop.

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The Prime Minister's wife, Margie Abbott, was there and so were the top brass of the railways. The Make-a-Wish Foundation had assembled hundreds of children at Central Station for a steam-train ride to Rosehill  and a picnic.

The chief executives of Sydney Trains and NSW Trains, Howard Collins and Rob Mason, gathered to be photographed with the 120-year-old steam locomotive. The railway band played carols.

But, despite the cheer, there was an air of tension around those in the know at Central's platform one on Thursday.

In control: Garry Ballhouse prepares to drive one of the steam engines stored at 3801 Ltd's Everleigh shed.

In control: Garry Ballhouse prepares to drive one of the steam engines stored at 3801 Ltd's Everleigh shed. Photo: Peter Rae

The train to Rosehill was being organised and run by a rail heritage group called 3801 Ltd.

And this week, 3801 Ltd was facing a heightened threat to its existence, in a chain of events that has embroiled Transport Minister Gladys Berejiklian's office in claims of conflict of interest, and whose origins stem from enmities within the world of NSW rail heritage almost as old as the trains they care for and restore.

The organisation, 3801 Ltd, is named for the first locomotive entirely constructed in Australia.

Built in 1943, it had been decommissioned for years before a group of railway enthusiasts started to lobby then NSW railways boss David Hill in the 1980s for a restoration.

By 1986, the train was returned to its full glory, and two years later the ''Bicentennial Train'' was touring the country in triumph.

But Mr Hill did not want to return the loco to its former custodians at the state's Rail Transport Museum at Thirlmere in the Southern Highlands. The museum was too far out of the way, and its members did not have the expertise to manage such a valuable restoration, he believed.

He instead created a new not-for-profit company, 3801 Ltd, chaired by John Glastonbury, dean of the faculty of engineering at the University of Sydney. The company was to operate out of a cavernous 19th-century shed at Eveleigh near Redfern. It has used that shed since, largely rent-free, and to the increasing ire of Thirlmere.

''There were some grumblings at Thirlmere when we took 3801 out of there, but the fact is Thirlmere had absolutely no plans and no capacity to restore, maintain and operate 3801 then and it hasn't now,'' Mr Hill said last week.

But he also came to believe he had made a major error in only handing 3801 Ltd a 20-year lease on the locomotive, after which it would revert to Thirlmere.

That lease expired in 2006, and then railways head Vince Graham moved 3801 out of Eveleigh into the control of Thirlmere.

For Mr Hill, this was a tragedy, compounded by the fact that 3801 has not run since 2007, the victim of a badly mishandled boiler replacement.

''I think the most successful rail heritage operator in Australia has been 3801 Ltd. If it ain't broke why did they try and fix it?''

But 3801 Ltd continued on, running regular heritage services like this week's Make-a-Wish trip, though on less striking rolling stock.

The organisation, however, now faces a new threat, with Ms Berejiklian determined to overhaul the way rail heritage works in NSW.

A review commissioned by the minister, which reported in February, found the divisions within the sector had badly damaged it. The state was missing out on millions of dollars in tourism revenue due to ''poor governance, mismanagement, low morale and in-fighting'', Ms Berejiklian said.

The review focused on the fact that the best place to run heritage trains was at Eveleigh's old erecting shed. But the bulk of the state's heritage assets, and the bulk of its financial contribution to heritage, was at Thirlmere.

The review said that other organisations should be able to use the erecting shed. It recommended a new body called Transport Heritage NSW, which was established this week, take control of all rail heritage assets in the state.

Complicating matters is that Ms Berejiklian's chief of staff, Owen Johnstone-Donnet, runs his own rail touring company. That company, St James Rail, hires trains for his tours from the Thirlmere museum.

A friend of Mr Johnstone-Donnet, Andrew Killingsworth, is also set to be named chief executive officer of Transport Heritage NSW.

These links have drawn inevitable claims of conflict of interest from the Labor opposition, as well as other figures in the industry.

''From my perspective everything needs to be open and above board and there has to be equity for all organisations,'' said Peter Anderson, of the Australian Railway Historical Society's ACT division.

Professor Glastonbury and 3801 Ltd, meanwhile, fear they will lose their Eveleigh base, and with it their existence. ''Otherwise we wouldn't be able to put out trains like this one immediately behind us,'' he said at Central in front of the train to Rosehill, as it puffed steam into the sky.

Clique