A public-private partnership may be Ohio’s best hope for passenger rail

Brightline trains began operating in South Florida on Jan. 12, 2018 -- the USA's first new privately-initiated passenger rail project and service in more than five decades. The project involves substantial real estate development around stations as well significant public-sector assistance too. But the project was not government-led, unlike passenger rail projects in the USA since the 1960s. (Modern Cities photo)

Brightline trains began operating in South Florida on Jan. 12, 2018 — the USA’s first new privately-initiated passenger rail project and service in more than five decades. The project involves substantial real estate development around stations as well significant public-sector assistance too. But the project was not government-led, unlike passenger rail projects in the USA since the 1960s. (Modern Cities photo)

All Aboard Ohio’s most recent hard-copy newsletter’s content was as much of a mixed bag of good and bad news as one could possibly imagine.

The lead story about the Federal Railroad Administration’s (FRA) Midwest Regional Rail System (MWRRS) study showed that Ohio is a strong market for passenger rail. The second front-page story showed that Ohio’s leaders are still unwilling to invest in anything other than more roads. Their neglect of public transportation to better link people with jobs is what I’d expect from Banana Republics or the USA’s Deep South where poverty is rampant.

And then there’s was the newsletter’s centerspread. It listed urban, regional and intercity passenger rail projects in Ohio that are or were in the planning pipeline. All they need is lots of money – a wee technicality! The reason why All Aboard Ohio did this centerspread is because there is private investor interest in Ohio rail projects. And that’s a good thing considering the near-total lack of public-sector interest in passenger rail, especially at the state level.

For the first time in nearly 50 years, the private sector is investing in passenger rail. You’ve probably read about Japanese leadership of the Dallas-Houston high-speed rail project. Well someone had to finally step up and do the obvious – link the nation’s seventh- and ninth-largest consolidated metro areas, separated by only 240 miles, with high-speed rail. The Japanese, who saw such large cities so close together, came to the natural conclusion.

Thankfully, Americans were able to see the light in Florida – eventually. After Gov. Rick Scott gave back $2.4 billion in federal funds to build Tampa-Orlando high-speed rail, a private-sector effort got rolling. This effort, led by All Aboard Florida (later called Brightline) on behalf of Florida East Coast Industries (FECI), had an advantage – it owned most of the route necessary to link Miami-West Palm Beach (the nation’s 10th-largest consolidated metro area) with Orlando (the nation’s 17th largest).

But there’s some significant public-sector contributions to this project. All Aboard Florida received a tax-exempt $1.75 billion Private Activity Bond (PAB) allocation from the U.S. Department of Transportation. It has permission to build tracks on a narrow strip of state-owned land along 35 miles of Florida Route 528 from Cocoa to Orlando International Airport. The state is spending $215 million to build a railroad station at the Orlando airport to also serve Brightline, Sun Rail commuter trains and a maglev.

Funding also includes $130 million for the 3-million-square-foot MiamiCentral Station from EB-5 immigrant investor visas purchased by wealthy Chinese. Lastly, local governments are providing $70 million for track construction so Tri-Rail commuter trains can also serve MiamiCentral.

While Ohio isn’t growing like Texas and Florida, it’s a populous state surrounded by populous cities. And, as we all know, Ohio is horribly under-served by passenger rail.

In the 1980s, All Aboard Ohio founder David Marshall doubted the state government would ever take the lead in sponsoring a passenger rail project. He said governmental initiative ran counter to Republicans’ policies and Democrats were only willing to be polite toward passenger rail, limiting the state’s leadership to endless studies.

However, the late Mr. Marshall did say Ohio might support a project led by others, be it Amtrak or a private initiative. Unfortunately, Amtrak doesn’t usually take the initiative in passenger rail development and instead reacts to state efforts to purchase new rail services.

So what about a private-sector initiative? What’s interesting is that there are private investors nosing around Ohio. One is Brightline which said it wants to do another rail project, possibly outside of Florida, after it gets its trains into Orlando. Another is a Kentucky investor who rightfully sees the Chicago-Indianapolis-Cincinnati/Louisville travel market as ripe for passenger rail. And the Chinese have been looking in Ohio and elsewhere for projects that combine rail/real estate development, be they urban, regional or intercity passenger rail.

Some believe that private sector leadership of a passenger rail project is the only way Ohio will get trains. To them, the FRA’s updated MWRRS plan may be good news. While trains services below 90 mph aren’t likely to garner much private interest, the MWRRS report will show that all proposed Ohio routes operating at 90-125 mph or faster, as part of a connected Midwest network, will generate enough operating revenues to at least cover the operating costs.

According to the FRA’s preliminary data, the Midwest’s most promising market is the Chicago-Detroit-Toledo-Cleveland-Pittsburgh corridor network. At 90-125 mph or faster, its frequent trains are projected to attract 7.2 million riders per year and achieve a revenue-to-cost ratio of 157 percent. The reason? There’s 10 million people in the consolidated metro area of Chicago (3rd largest), 5.3 million in Detroit (12th), 3.5 million in Cleveland (15th), 2.6 million in Pittsburgh (20th), 650,000 in Youngstown (74th) and in Toledo (75th).

That should draw private-sector interest. So might federal PAB or a low-interest federal loan from the Railroad Rehabilitation & Improvement Financing (RRIF) program. Both can be used to fund rail infrastructure, trains, stations and, just as important, real estate development around stations to enhance ridership and revenues.

Let’s see how the private and public sectors react to the FRA’s MWRRS report when it is released in December. All Aboard Ohio is already doing its part to make sure they’re aware that Ohio’s looks pretty good in it.

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Midwest rail plan is promising for Ohio

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Preliminary data shows the Midwest’s most promising passenger rail route for future development is a 580-mile corridor network linking Chicago (the nation’s 3rd-largest consolidated metro area) with Detroit (12th-largest), Cleveland (15th-largest) and Pittsburgh (20th-largest) plus lots of smaller metros, tourist towns and college towns. As part of a larger network, frequent trains operating at 90-125 mph or faster could attract 7.2 million riders per year and produce revenues 157% greater than operating costs. But will the public/private sectors lead/support the development of this corridor in Ohio?

Although it is still a few months away from completion, the Midwest Regional Rail System (MWRRS) study by the Federal Railroad Administration (FRA) and its consulting team is delivering some early returns. Those returns are in the form of ridership and operating cost-effectiveness projections that show Ohio has several potential intercity passenger rail routes deserving of strong consideration for public and private investment.

SEE SELECTED GRAPHICS AT END OF ARTICLE OR THE FULL PRESENTATION HERE (PDF) STARTING ON PAGE 48.

Indeed, one of the Ohio routes is projected to have the highest revenue-to-cost ratio of any Midwest route studied, according to preliminary data. All Aboard Ohio is already engaging stakeholders statewide to make them aware of the MWRRS findings. Please let us know of any stakeholders who should be contacted by e-mailing us at info@allaboardohio.org or calling us toll-free at 1-800-464-RAIL (7245).

Estimates of ridership, revenues, operating costs, capital costs and benefits are being developed for multiple Ohio routes, both as stand-alone corridors and as parts of an inter-connected system. The Ohio routes in this study include:

  • Cincinnati-Indianapolis-Chicago (via Greensburg, IN and/or Oxford, OH)
  • Cleveland-Columbus-Dayton-Cincinnati
  • Cleveland-Toledo-Chicago (via Fort Wayne, IN, South Bend, IN and/or Detroit)
  • Columbus-Chicago (via Lima, OH-Fort Wayne and/or Dayton-Indianapolis)
  • Detroit-Indianapolis (via Toledo-Fort Wayne)
  • Eastern Gateways (Cleveland-Buffalo, Cleveland-Pittsburgh, Columbus-Pittsburgh, plus two that bypass Ohio – Detroit-London-Buffalo and Detroit-London, ON-Toronto-Montreal)

This study represents an update of past, Midwest network planning efforts in the 2000s and in the 1990s. Those efforts ultimately resulted in upgrading the Wolverine (Detroit-Chicago) and Lincoln (St. Louis-Chicago) corridors to 110 mph standards as well as developing new services to the Quad Cities and to Rockford.

The next step in the current study will be to develop some estimates of conceptual capital costs and for user (riders) and non-user (society) benefits from three different service tier options for each route. The three service tiers are:

  • Core Express – over 125 mph, frequent service on dedicated tracks except in terminal areas, using electrically powered trains serving major metropolitan centers, and an on-time performance goal of 99 percent.
  • Regional – 90-125 mph, frequent service on dedicated and shared tracks, using electrically and diesel-powered trains connecting mid-sized urban areas with each other or with larger metropolitan areas, and an on-time performance goal of 95 percent.
  • Emerging/Feeder – up to 90 mph, several daily trains powered by diesel on shared tracks, connecting mid-sized and smaller urban areas with each other or with larger metropolitan areas, and an on-time performance goal of 85 percent.

Then, the planning team will prioritize each route for investment and at what service tier would be most beneficial for investment. So while the Wolverine and Lincoln corridors have already seen significant capital improvements upwards of $2 billion in total, the study may show they are deserving of more investment to further increase train speeds and frequencies.

Routes not yet developed also are showing strong ridership and cost-recovery potential and are likely to rank highly in this report. Twin Cities-Rochester-Madison-Milwaukee-Chicago appears to be the strongest, as-yet undeveloped route west of Chicago.

But east of Chicago, all of the Ohio routes are projected to earn revenues in excess of their operating costs when those Ohio routes are operated with a Regional service tier (90-125 mph) and in a network context.

In fact, the strongest proposed route evaluated in the entire MWRRS is a Chicago-Detroit-Toledo-Cleveland-Pittsburgh corridor network (includes branches and network connections to Grand Rapids, Lansing, Toronto and Fort Wayne). This corridor network is projected to attract 7.2 million annual riders and generate revenues that are 157 percent greater than its operating costs. This is sufficient to warrant a service tier of no less than Regional and perhaps as great at Core Express, according to the FRA’s preliminary findings.

But it is important for those of us in Ohio to remember that Eastern Gateway routes through Canada that bypass Ohio are also being considered by this report. While a Buffalo-Cleveland route with an Emerging/Feeder service tier is projected to attract 500,000 annual riders, the route through Canada is projected to be an even stronger network connection to/through Buffalo.

Although it’s not projected to be as strong as an Eastern Gateway via Pittsburgh, a route through Ontario has a political advantage. Ontario is aggressively developing passenger rail which includes planning for a 155-mph Windsor-London-Kitchener-Toronto route. Midwest routes with a Chicago hub can have their Eastern Gateway through Canada if Ohio continues to sit out the passenger rail renaissance.

At the next stakeholder workshop to be held Dec. 6 in Chicago, the FRA’s study team intends to release a draft, proposed Midwest regional high-performance rail network including:

  • Corridors with proposed levels of service
  • Potential stations
  • Capital costs, operating/maintenance costs
  • Prioritized phasing based on cost-benefit analysis

Planning documents, presentations given at the first three workshops and other materials are posted on the FRA’s MWRRS Web site at www.midwestrailplan.org. The FRA’s study team includes the Williams Sale Partnership Ltd. (WSP, based in the United Kingdom and which recently purchased U.S. engineering giant Parsons Brinckerhoff), Quetica which is a supply chain management/eCommerce consultant, and SMA Rail Consulting that provides rail consulting and internet technology services.

SEE GRAPHICS BELOW SELECTED FROM THE FULL PRESENTATION HERE (PDF) STARTING ON PAGE 48. CLICK ON THE IMAGES TO ENLARGE THEM.

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Help All Aboard Ohio on Oct. 10-11

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Please mark your calendars!

All Aboard Ohio’s largest fundraiser is coming up — lasting 26 hours starting at 10 a.m. on Oct. 10 and continuing to 12 noon on Oct. 11. Donate during that time to All Aboard Ohio through the Columbus Foundation and the foundation will match your generosity with its own donations to All Aboard Ohio! See details below or go to ColumbusFoundation.org.

With the Federal Railroad Administration’s Midwest Regional Rail System plan showing promising data for multiple Ohio routes (see the next newsletter, due in the mail by mid-October), we’ll need your help to make sure Ohio’s local, regional, state, federal and business leaders are aware of what’s in this terrific report, due out at the end of the year. We also need resources to make sure Ohio’s gubernatorial candidates know how important trains and transit are to Ohio’s future. That takes money so our dedicated staff and volunteers can reach out to educate and activate our leaders.

That’s where The Big Give comes in — by amplifying your generosity!

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(CLICK GRAPHIC FOR A LARGER VERSION)

 

A reminder — All Aboard Ohio and other local meetings this month are:
Oct. 13 – 3 pm, Toledo (MLK Plaza, 3rd Floor, 300 MLK Jr. Dr.);
Oct. 14 – 10 a.m., Cleveland (Tower City Sustainable Cleveland Ctr, 3rd level, 230 West Huron);
Oct. 14 – 10 a.m., Columbus (Grandview Public Library, 1685 W. First Ave.);
Oct. 23 – 11 a.m. Toledo Rail Forum (The Toledo Club, 235 14th St.);
Oct. 25 – 7 p.m., Cincinnati (Lydia’s on Ludlow, 329 Ludlow Ave.).

 

THANKS FOR YOUR CONTINUED SUPPORT OF ALL ABOARD OHIO!

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CSX, Wall Street want a steel wall across Ohio

CSX added a second main track along much of its 350-mile Chicago-Cleveland line in 1998. This track construction view was in New London, OH (All Aboard Ohio file photo).

CSX added a second main track along much of its 350-mile Chicago-Cleveland line in 1998. This track construction view was in New London, OH (All Aboard Ohio file photo).

Imagine how Ohioans would react to a new Ohio Turnpike commissioner seeking to halve the busy toll road from six lanes to three. It would be soundly rejected and the commissioner promptly shown the exit.

An equally zany idea is reportedly being pursued by E. Hunter Harrison, the new CEO of CSX Transportation Inc., one of the nation’s largest railroads. CSX’s spine line is its Chicago-Albany, NY corridor which carries as much gross freight tonnage per year as the Ohio Turnpike.

CSX carries that much freight by operating more than 60 trains a day over any given Chicago-Boston segment. That number may be halved by running trains twice as long as before Harrison’s arrival. To him, that presents an opportunity only Wall Street would like — single-tracking a valuable transportation artery that parallels the Ohio Turnpike west of Cleveland. Ironically, Harrison’s plan would likely clog the Chicago-Albany mainline and send more rail shippers to dial up pavement- and bridge-damaging trucks that use the turnpike and other roads. Each train carries enough freight to fill 250 trucks.

The CSX mainline goes through these and other Ohio cities (from west to east): Hicksville, Defiance, Deshler, North Baltimore, Fostoria, Tiffin, Willard, Greenwich, New London, Wellington, Grafton, Berea, Brook Park, Brooklyn, Cleveland, East Cleveland, Euclid, Wickliffe, Willowick, Willoughby, Mentor, Painesville, Perry, Madison, Geneva, Ashtabula, and Conneaut to name just a few.

However, there are two main differences with the Ohio Turnpike: 1. The CSX mainline crosses hundreds of state and federal roads, city avenues, small-town streets and farm access routes at-grade. 2. CSX’s mainline is a privately owned property and must be profitable to Wall Street’s standards, whereas the Ohio Turnpike is a government-owned property operated for the public’s benefit. It should be noted that CSX’s predecessors did not gain their properties from 19th-century federal land grants. Indeed only 7 percent of U.S. railroad route mileage was built on land grants and nearly all was west of the Mississippi River.

But that doesn’t excuse Harrison who cares more about Wall Street and less about Main Street. He is a pathological, public-be-damned executive straight from 19th century robber baron lore, selected by Wall Street hedge fund managers who dominate CSX’s shareholders and the company’s board of directors.

What he seeks to do with the Chicago-Albany line would literally cut in half dozens of Northern Ohio towns with a steel wall — longer, slower-moving trains up to three miles long that are more susceptible to mechanical breakdowns from burned-out locomotives, broken couplers and frozen brake lines. Northern Ohio businesses, school buses, safety forces and agricultural commerce will also be blocked by long freight trains stopped for tens of minutes or even hours in sidings more than three miles long. There they will wait for opposing rail traffic to clear each 10- to 15-mile single-tracked portion in between sidings. There will be dozens of these sidings across Northern Ohio. Consider:

  • CSX’s Chicago-Albany mainline has 247 route miles in Ohio;
  • This mainline has 259 public and private road at-grade crossings in Ohio;
  • Also in Ohio are 10 critical, busy junctions with other railroads where their rail traffic may be slowed as well;
  • 25.5 continuous miles of CSX mainline through Greater Cleveland have no at-grade road crossings;
  • Excluding Greater Cleveland, there is an at-grade road crossing every 4,500 feet along the CSX mainline in Ohio;
  • Building new taxpayer-funded roadway overpasses / underpasses costs $10 million to $20 million each.

“There comes a point where the national interest must come before Wall Street’s desire for more profits,” said All Aboard Ohio Executive Director Ken Prendergast. “This is one of those cases. Following deregulation in 1980, the nation’s railroads were allowed to eliminate parallel railroad lines to boost profitability. There are only a few trunk lines left and they are heavily used. That means any further reductions in capacity will harm shippers, communities, and rail passengers by negating nearly $1 billion in infrastructure investments along this rail corridor by federal, state and local taxpayers over the last 40 years. Control over this strategically important national asset should not be left to the whims of a management that wants to conduct a fire sale.”

From Greenwich, OH eastward, roughly 530 miles of the 815-mile Chicago-Albany mainline was acquired by CSX during the split and purchase of Conrail’s assets in 1999 by CSX and rival Norfolk Southern. Conrail, by the way, was restored to profitability thanks to hundreds of millions of dollars in taxpayer-fund infrastructure improvements in the 1970s and 80s. As part of the Conrail acquisition, CSX invested nearly a half-billion dollars of its own capital to add a second main track along the single-tracked portions of the 350-mile Chicago-Cleveland portion.

In the last decade, CSX benefited from $280 million in federal and state funds, including from Ohio, to upgrade portions of this and other rail infrastructure for CSX’s $850 million National Gateway Corridor linking Ohio to the East Coast. The Greenwich-North Baltimore, OH portion of the Chicago-Albany mainline was a beneficiary of some of this public investment. That doesn’t include many millions more spent by taxpayers to build roadway overpasses and underpasses to mitigate the community impacts from freight rail traffic increases since the 1999 Conrail split.

Harrison’s plan is similar to what he did with the less-busy Chicago-New Orleans Illinois Central Railroad years ago. There, he took a two-track railroad mainline with fluid traffic flow, combined its freight trains to make them longer, and then removed the second track wherever possible. For more than a year after single-tracking, the Illinois Central mainline was in chaos. After enough shippers fled the railroad and train dispatchers got a handle on what was left, things settled down on the former “Mainline of Mid-America.”

But Chicago-Albany is a different animal. CSX runs a lot more daily trains here — more than 60 freight trains and up to eight Amtrak passenger trains east of Cleveland and especially east of Buffalo (where state and federal taxpayers are investing $200 million to construct or improve tracks, signals, crossings and stations to make passenger service more convenient and efficient). The route east of Cleveland has been called the “Water Level Route” for more than a century when it was the pride of the New York Central System (the route follows the shoreline of Lake Erie as well as the Mohawk and Hudson rivers). West of Cleveland, the railroad is mostly straight and flat, too. These physical conditions have, no doubt, influenced Harrison to try to squeeze more efficiencies out of this line. But Wall Street’s gain will be Ohio’s pain as this valuable transport asset is diminished at Main Street’s expense.

What can we do?

Get informed: Local, state and national leaders along the route need to learn from professional, independent railroad operations managers and planners what impacts Harrison’s plan will have on Northern Ohio communities, businesses, shippers, safety forces, and road traffic. See All Aboard Ohio’s backgrounder to learn what at-grade crossings and communities would be affected.

Get organized: One city, even one as large as Cleveland, might not be able to force a multi-billion-dollar Class I railroad company or the federal Surface Transportation Board (federal regulatory body that oversees railroads) to positively respond to any complaints. All affected stakeholders need to unite and speak as a single, coordinated voice.

Consider the options: Action steps could include filing a taxpayers’ lawsuit considering the amount of taxpayer money invested into rail-related infrastructure along all parts of this corridor in recent decades. Also, stakeholders should consider filing complaints with the Surface Transportation Board (as Murray Energy just did) which is charged with having a big-picture public interest when it comes to vetting potentially destructive actions by private interests. Lastly, public agencies such as the New York State Department of Transportation, the Ohio Turnpike & Infrastructure Commission and/or others should consider buying significant portions of the CSX mainline and lease it back to CSX or other qualified, competing bidders.

CLICK ON IMAGE TO ENLARGE IT.

CLICK ON IMAGE TO ENLARGE IT.

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