The Australian Government is extending five passing loops across Victoria and South Australia to facilitate the operation of 1,800m trains.
The $15m loops extension project will be carried out at Mile End in South Australia, and Pyrenees, Murtoa, Pimpinio and Diapur in Victoria.
Longer trains will see a 20% increase in capacity for each rail freight service at a little additional cost to operators. This would increase competitiveness and rail capacity between the eastern states and Western Australia (WA).
Australia's Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss said: "With rail dominating the supply chain for Australia's east-west freight, today's investment will make interstate freight more efficient.
"Rail has around 80% of the land transport market from east to west and many Australian businesses rely on this corridor to service substantial WA markets.
"Making rail more productive and competitive makes economic sense because reducing costs in the supply chain leads to cheaper goods on the store shelf for Australian consumers."
The Australian Logistics Council has recently published a report, which showed that just a 1% improvement in productivity in the logistics industry can strengthen national GDP by $2bn.
Australian Rail Track (ARTC) has undertaken an analysis on the project in consultation with customers, as well as evaluated the benefit of new centralised train control (CTC) signalling implemented between Port Augusta and Tarcoola in South Australia.
ARTC CEO John Fullerton said: "Passing loops effectively duplicate a short section of track, to allow one train to hold while another passes in the opposite direction, before the train in the passing loop continues on its way.
"We already have a limited number of 1,800m trains operating in the Melbourne to Adelaide section each week, but these longer passing lanes, in conjunction with the Torrens Junction separation planned by the Australian and SA Governments, will allow high-productivity trains to run in both directions."
Construction work at Pyrenees is expected to be initiated later this week and the complete project would be completed by mid-2016.
In addition, Western Australia has joined the National Rail Safety Regulation and Investigation programme, which includes South Australia, Tasmania, Northern Territory, New South Wales, Victoria and the Australian Capital Territory.
Truss added: "The WA parliament's passage of the Rail Safety National Law last month enables the state to join the scheme, with regulatory oversight by the Office of the National Rail Safety Regulator.
"Rail safety in Australia was once a patchwork of state and territory arrangements, but is now an increasingly seamless and efficient national system."