MELBOURNE (Reuters) - Aurizon Holdings Ltd <AZJ.AX> has scrapped plans to build a rail line that could have served Indian conglomerate Adani's <ADEL.NS> long-delayed coal project in Australia, Aurizon and the Australian government said on Friday.
The country's biggest coal hauler had applied for a loan from the government-run Northern Australia Infrastructure Facility (NAIF) to build a rail line from the Galilee Basin to transport coal nearly 400 km (250 miles) to the coast from a number of proposed projects.
Adani's $4 billion Carmichael mine and rail plan is the most advanced of the projects in the untapped Galilee Basin, but has been held up by lack of financing and a barrage of legal challenges by green groups concerned about climate change.
Aurizon said it had failed to line up any contracts to use the rail line, so it would shelve its plan to build it.
"Our NAIF application is, in part, predicated on having customer contracts secured. Given this is unlikely to occur in the near future we believe it is prudent to withdraw the NAIF application," Managing Director Andrew Harding said in a statement.
Adani had separately applied to the Australian government fund for a A$900 million loan but the state government of Queensland said it would veto any loan to Adani, ruling out government funding for the rail line.
Adani said Aurizon's decision to pull its loan application would not impact the Carmichael project.
"We're progressing with our project. We're focusing on early works," said a spokeswoman for Adani Australia.
Adani Australia's chief executive Jeyakumar Janakaraj told Reuters last October the company aimed to line up financing for the Carmichael project by March 2018. The spokeswoman declined to comment on whether that was still possible.
In an effort to cut costs after missing out on a federal loan for Carmichael's rail line, Adani cancelled plans with contractor Downer EDI Ltd <DOW.AX> last December to develop and run the mine.
(Reporting by Sonali Paul; editing by Richard Pullin)
