The decision comes as a blow to the much talked about "logistics and agribusiness hub" which is in its final planning phase to be built between the Katherine railway terminal and the Victoria Highway.

Defence has opted to use road tankers to supply the new six million litre fuel farm on the Tindal base which is part of the new upgrade, a parliamentary hearing was told last week.

The US military is also building fuel storage facilities as Tindal as part of the United States Force Posture Initiatives.

It has long been hoped Defence would be a big user of a freight hub in Katherine to funnel munitions and fuel into the base.

The dream of Defence becoming an anchor tenant of any freight hub goes back as far as the CLP Government of Adam Giles.

Transport Minister Peter Chandler in 2016 said a rail link between the hub and Tindal could give Katherine the edge it needed to be viewed as the NT's transport heart.

The Defence White Paper outlines $20 billion in federal government spending on infrastructure over the next two decades, including a potential link to the base from existing rail network "to support the transporting and handling of explosive ordnance and bulk fuel", Mr Chandler then said.

A Federal Government public hearing on the upgrade was to be held in Katherine last week but submissions were instead made by teleconference.

Despite Prime Minister Scott Morrison's enthusiasm for the project when he visited in February, the Parliamentary Standing Committee on Public Works has to look closely at the spending detail and heard from Defence last week, including its decision not to build a rail link.

Subject to the expected Parliamentary approval, the design work is expected to be finished by mid-2021, with construction expected to start in the next few months and be completed in late-2027.

The first part of the works "will also address a significant shortfall in permanent living in accommodation facilities required by the increased operational tempo at RAAF Base Tindal".

The committee heard a separate fuel farm, aircraft parking apron and associated facilities are proposed to be constructed at Tindal by the US to support its own flying operations.

"Refurbishing the existing fuel farm will not provide the increased capacity and utility required," Defence officials told the commiittee.

While a traditional design approach was considered, the preferred option is new construction based on a proven US Department of Defense 'cut and cover' design involving hardening of a minimum of two bulk storage tanks by encasing in concrete and mounding with fill. This approach will ensure that the proposed adjacent fuel farm can operate independently and/or be linked to operate with a fuel farm planned by the United States Government. The fuel farm design also provides for a hydrant refuelling system to service the proposed aircraft parking apron.

An aviation fuel farm is proposed, to provide a total storage capacity of six megalitres. The two storage tanks will be made of steel, encased in concrete and earth-mounded for protection. The fuel distribution system will enable fuel to be off-loaded from road tankers, checked for quality, stored and then pumped into RAAF refuelling trucks or directly to aircraft parked on the nearby aircraft parking apron using an integrated hydrant refuelling system. The control system, pipework reticulation and hydrant systems have been designed to integrate with the planned United States fuel farm to be constructed under the United State Force Posture Initiatives.

The proposed fuel farm includes a control centre and fuel quality laboratory, tanker loading and off-loading equipment, electrical and mechanical services buildings and measures to protect the environment from potential fuel spills.

More reading: Drilling down into the detail.

More detail was also provided to the committee on the "significant shortfall in permanent living in accommodation facilities required by the increased operational tempo at RAAF Base Tindal".

"New construction was the only viable option for providing the required increase in capacity for members entitled to a permanent standard of living in accommodation. A medium density design is considered the most cost-effective option as it will provide flexibility for future development of the residential precinct," the committee was told.

"The three-storey medium density design reduces the proposed development footprint which will maximise the potential for future development in the residential precinct. Three buildings are proposed which will provide 108 single occupancy units, including a number of accessible units. Each room will be 30m2 and will include an ensuite, built-in fixtures such as wardrobes, cupboards and desk, furniture, and will be air conditioned. Each room will have a balcony or patio. Laundries will be provided on a "one per four units" basis. Covered car parking will be provided for each unit."

The term "local" for the purpose of contractors hoping to secure some of the Tindal work has been expanded to include the NT.

"While local contractors will be sought to undertake the works, off-base accommodation for construction workers will be required for an extended period. The planned expansion of the existing privately-operated off-base construction workers camp is anticipated to minimise the impact of the construction workforce on the availability of local tourist accommodation during the dry season."

The base's sewer network will be upgrade with the existing rising mains to be replaced, the sewerage treatment plant upgraded, and six sewer pumps to be remediated or replaced to improve the performance of the sewer network. New rising mains will follow the existing service alignments where possible.

Stormwater diversion bunds and detention basins will be constructed in key areas of the airfield to divert overland stormwater flows and control the rate of flow into downstream drainage systems. Flood modelling was used to optimally locate and size the bunds and detention basins to reduce the extent of flooding in and around the airfield.

A further study is planned to understand the potential impact on the environment of increased surface water run-off resulting from the proposed works. The findings of the study will include measures to avoid or minimise the potential impacts of the works on the local and regional hydrology and groundwater.

PFAS contaminated soils and groundwater may be encountered, contractors have been warned.

"If any is found, stormwater management measures will be applied to manage the impacts to groundwater of construction activities. PFAS contaminated soils will be stockpiled, classified and managed in accordance with the Defence PFAS Framework - Construction and Maintenance Projects. Development of a water and soil PFAS contamination strategy is proposed for the Project."

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