The proposed multi-user, open-access 204km railway, sometimes referred to as the Southern Missing Link, would connect the existing narrow gauge Queensland Rail line near Wandoan, 230km northwest of Toowoomba, with Aurizon's Moura railway network at Banana, 130km west of Gladstone.

The consortium, which includes Atec Rail Group, Xstrata and Aurizon, designed the SBR to link planned coal mines in the Surat Basin with the Wiggins Island Coal Export Terminal at Gladstone.

Lawyer Mr Tom Marland told ABC television that the consortium has failed to act on its notice of intention to acquire the land, leaving the landholders he represents with thousands of dollars in legal fees.

Surat Basin Rail CEO Mr Allan Miller says the line will be constructed to an extended schedule because of challenging market conditions.

Queensland's deputy premier Mr Jeff Seeney says landholders should seek compensation for expenses accrued over the discontinued notices of intention to acquire land.