Higher fuel prices and concern about the environment have shifted attention to rail as a better option for freight transport.

In a world first, the Australian Rail Track Corporation hopes to double capacity on its national freight network by switching to a AUD500 million computerised management system that allows trains to run safely at shorter intervals, according to a report in The Australian.

The corporation has signed a AUD74.8 million deal with Lockheed Martin for a 120km proof-of-concept section from Adelaide to Port Augusta to test the Advanced Train Management System which does away with traditional signalling technology, which can force train intervals out to more than 60km.

To fix a train's position on the track, the system uses inertial guidance technology backed up by GPS. Location, speed, weight and engine data are constantly fed back into a central management system, which monitors train separations and can override the driver, if needed.

The system also operates as a computerised dead man's switch.

The system communicates with trains over Telstra's 3G network, backed up by the Iridium satellite phone network.

Under a separate AUD70 million contract with Telstra, about 800 locomotives that operate on the ARTC network are having their onboard communications systems upgraded to work with the new system.

When completed, the test system will be the only one on an operating railway line in the world.