According to Mackay’s Daily Mercury newspaper, work has been put on hold as the involved mining companies assess their options.

In November ABN Amro Morgan analysts raised doubts over whether coal producers could fully underwrite the Northern Missing Link-Abbot Point expansion and new Wiggins Island coal export terminal in Gladstone, given the difficult financial climate.

At a cost of some $A680 million, the Northern Missing Link was aiming to provide a rail connection between the Newlands and Goonyella systems in Queensland’s northern Bowen Basin coal fields through an alliance of government and the private sector.

Meanwhile, the treasurer said the state government was committed to building the Northern Missing Link project, including doubling the Abbot Point Coal Terminal.

Current contracts with coal companies were set to expire this week, but Fraser said the state government will offer an extension until June.

Fraser added that coal companies were now saying they have very different tonnage profiles for the coming years and the coal tonnage forecast for the first two years of the project was 90% lower than originally planned for.

''The downturn in the resources sector is massively reshaping the sort of volumes the coal companies believe they will need,” he said.

''Whereas we previously faced infrastructure bottlenecks, there is now going to be 30 million tonnes of spare capacity on the network this financial year."

He said the state government was committed to building the link but the volume it carries will be determined by what the coal companies are seeking.

He also said no Queensland Rail employee would lose their job.