The northern railway from Port Augusta was begun in 1878: it was envisaged as a railway that would link the southern portion of South Australia with its territory in the north. By 1881 this narrow gauge railway had crawled as far north as Beltana, by 1884 to Marree and by 1891, Oodnadatta. Here the railhead remained until the Commonwealth Government took over the railway as part of the deal with South Australia for the transfer of the Northern Territory to Commonwealth control in 1901. The Commonwealth eventually extended the line to Alice Springs in 1929, at the same time extending the line south from Darwin as far as Birdum.
The railway to Oodnadatta was affectionately called the Ghan, recalling the Afghan cameleers who for many years were the only means of transport in the South Australian outback. These men with their camel trains supplied remote pastoral stations, telegraph stations and even carried the supplies for the building of the railway. The train's symbol of the Afghan rider on the camel reflects this heritage.
The route of the railway was tortuous: winding through the Flinders Ranges, and across the dry remote and flood prone country of the interior, supplying many small towns along the way. Washouts after sudden thunderstorms were common: the train could be delayed for days or weeks until the water receded and the line repaired if necessary. Heat damage to the rails was another problem as was termite damage to the sleepers. Eventually in 1980 a new line via Tarcoola was built, more to the west and more flood-proof. The new line was standard gauge, built on termite proof concrete sleepers. But the line still only reached Alice Springs.
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