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Detroit-Windsor rail tunnel project put on hold

From Crain’s Detroit Business:

Detroit-Windsor Rail Tunnel.
Detroit-Windsor Rail Tunnel.

The $400 million effort to build a new rail tunnel underneath the Detroit River has been put on hold because its private-sector backers say the business case for new tunnel doesn’t exist.

“It’s idle for now,” said Marge Byington Potter, executive director of corporate affairs for the Continental Rail Gateway. The project has been in the planning stage since 2001.

She did not explain why the project is on hold and deferred all other comment to the project’s primary financial backers, Toronto-based Borealis Infrastructure Management Inc. and Calgary, Alberta-based Canadian Pacific Railway Ltd.

The companies issued a joint statement via email Monday afternoon: “The Continental Rail Gateway replacement tunnel is being idled pending review by the partners, Canadian Pacific and Borealis Infrastructure. At present, the business case and economics of the project are not sufficient to proceed with a majority privately funded development. We continue to focus our attention on the existing tunnel, which remains in full commercial operation and is a key component of Canadian-United States border infrastructure.”

CP and Borealis had committed $200 million to the project, with the remainder expected to come from government sources.

The state of Michigan last year committed $10 million to the tunnel project, contingent on its getting all its other funding and approvals. No other government funding had been secured.

Borealis is the investment arm of the Ontario Municipal Employees’ Retirement System. It is financing most of the tunnel work and owns the land necessary for the project near Detroit’s current rail tunnel. Borealis increased its stake in the tunnel and the project to 83.5 percent from 50 percent in an $87.7 million deal in 2009.

Montreal-based Canadian National Railway Co. had been part of the project but sold its share to Borealis in February 2000.

Byington Potter told Crain’s this month that project officials were in talks with the U.S. Federal Railroad Administration for a $190 million Railroad Rehabilitation & Improvement Financing loan to round out the capital costs. For the loan to happen, Canadian federal environmental approval and all other permits had to be in hand. That process was ongoing, Byington Potter said at the time.

She said she expected Canadian environmental approval by the end of summer. The project wasn’t seeking any other Canadian and U.S. grants to offset the borrowing, she said.

Once all the capital was in place, the project had to receive approval to proceed under the Canadian International Bridges and Tunnels Act and get a U.S. presidential permit from the U.S. State Department.

Construction was estimated to take two years.

The financing premise is that the project would recoup its costs from tolls that rail companies negotiate. Such tolls are typically based on each kind of rail car, such as tankers and boxcars. Byington Potter didn’t have toll estimates.

Land for the new tunnel is near the current rail tunnel’s Detroit entrance, just southwest of the U.S. post office at West Fourth and Eighth streets. It handles about 400,000 rail cars annually.

The traffic volume with the new tunnel was expected to be about the same but would be done more efficiently with the use of double-stacked rail cars, Byington Potter said.

The new tunnel was planned to be about 50 feet below the riverbed, 30 feet deeper than the current tunnel. It also would be several hundred feet longer and would be dug by specialized boring machinery rather than constructed as tubes sunk into the river, which is how the current tunnel was built in 1910.

Design and engineering work on the new tunnel has been done by Omaha, Neb.-based HDR Inc.; Toronto-based MMM Group; and Iselin, N.J.-based Hatch Mott Macdonald Group Inc.

The current twin-tube tunnel underwent a $27 million enlargement of one tube in 1993 that allowed it to accept some but not all modern stacked container rail cars.

That expansion of what’s known formally as the Michigan Central Railway Tunnel eliminated the need to move cargo, especially automobiles and trucks, by ferry across the Detroit River. The tunnel remains unable to accommodate the largest stacked rail cars, especially the 9-foot-6-inch “high-cube” shipping containers that are stacked.

Canadian National built a large, modern tunnel underneath the St. Clair River between Port Huron and Sarnia that opened in 1994 at a cost of $200 million. CN maintains that tunnel almost exclusively for its own trains.

The new tunnel would be open to all rail companies, Byington Potter said.

The plan for a new tunnel originally called for the current tubes to be converted into a commercial truck link, but that was scrapped after Canada and Michigan opted to build a new bridge about a mile from the Ambassador Bridge — a span scheduled to open by 2020 and be called the Gordie Howe International Bridge.

Before taking on its current name, the tunnel effort was called the Detroit River Tunnel Partnership, and the tube itself was nicknamed the “Jobs Tunnel” because of the thousands of jobs backers predicted it would create or preserve.

Tunnel backers also noted that the new tube would be near the proposed $445 million Detroit Intermodal Freight Terminal being built by CSX, Norfolk Southern, Canadian Pacific and Canadian National as a consolidated terminal near Wyoming Avenue and I-94. The terminal is designed to accommodate existing and future freight demands.

John Taylor, chairman of the supply chain management department at Wayne State University’s School of Business Administration, has been on record for years as skeptical about the tunnel project.

“It’s very difficult financially because there’s so little traffic that doesn’t fit now,” he told Crain’s this month. “It’s just hard to justify the financing. Until we get to the point most of the container traffic does not fit, it’s just hard to justify a new railroad tunnel. I think it’s up in the air. The business case is very difficult.”


Grand Rapids, Detroit train idea taking shape

From The Detroit News:

The Michigan Environmental Council has undertaken a $100,000 feasibility study on public transporation options, including establishing rail service between Detroit and Grand Rapids.(Photo: John T. Greilick;file / The Detroit News)
The Michigan Environmental Council has undertaken a $100,000 feasibility study on public transporation options, including establishing rail service between Detroit and Grand Rapids.(Photo: John T. Greilick;file / The Detroit News)

Passenger train service between Detroit and Grand Rapids could be reinstated in the next decade if state transportation experts determine the public has an appetite for a new line and can figure out how to pay for it.

Supporters say the idea of connecting Michigan’s two largest cities by train is gaining appeal on both sides of the state as each undergo economic and cultural revivals making passenger service more appealing to business travelers and tourists.

The Michigan Environmental Council, the Lansing-based group that supports increasing public transportation options, has undertaken a $100,000 feasibility study and embarked on a series of hearings this summer along the route to get the public’s input. More hearings are scheduled later this month in Dearborn, Plymouth, Ypsilanti and Brighton. Also involved in the effort are the Ann Arbor Area Transportation Authority and the Michigan Department of Transportation.

“There really is not a way to connect to Michigan’s major cities and our coasts without taking a car,” said Elizabeth Treutel, a transportation police expert with the council. “There are no rail options. If Michigan wants to be competitive, if we want to attract talent, if we want to keep our college-educated people here, we have to have more and better options to get around. And people have to be willing to recognize that and invest in it.”

Even boosters acknowledge that re-instituting the service will be challenging.

“Getting rail service up and running is a very difficult task,” said Kathleen Lomako, executive director of the Southeast Michigan Council of Governments, which helps regional leaders with transportation planning. SEMCOG has been working on a passenger rail project from Ann Arbor to Detroit for years and struggled with funding.

“Connecting our region to other parts of the state, it’s a good thing. It’s about figuring out how difficult is that going to be to do, how much it’s going to cost and who pays for it. Those are all questions that need to be answered.”

The Detroit to Grand Rapids line isn’t the only one being explored. Preliminary discussions have been underway for months on establishing a rail connection from Ann Arbor to Traverse City. The Michigan Land Use Institute is pushing MDOT officials to study the feasibility of the route using existing freight rails with the hope that it could be operational by 2025.

Michigan hasn’t had a Grand Rapids-to-Detroit line since Amtrak was created in 1971. Those heading the effort said that four feasibility studies on resuming service were done in the 1980s through 2002.

The current Coast-to-Coast Passenger Rail study is examining three possible routes that would run on freight tracks from Holland through Grand Rapids and Lansing and to Detroit. Two routes would go through Ann Arbor; one going through Jackson and Ann Arbor and the third through Plymouth and Brighton.

The study will be conducted by a transportation management firm to determine cost, time, ridership and how to fund it. It will also consider public feedback given at meetings held by the Michigan By Rail team, a coalition of organizations led by MEC and the Michigan Association of Railroad Passengers.

Organizers said the line could take a decade to implement. The train, Treutel said, would have to go between 79 and 110 mph to compete with car travel.

The only way to get from Detroit to Grand Rapids and back by passenger train involves traveling to Chicago and connecting for a return trip.

Andrew Layman, who lives in Ann Arbor and attended a public hearing on the rail project there last month, said he’s interested in seeing better rail options in the state that are “reliable and affordable.” But he worries about whether the public will eventually support the service with tax dollars.

“The entire country and the state of Michigan is lacking, really,” said Laymen, 29, comparing the state’s train service to that of Europe. “I just think we’re behind the times and this is long past due. It’s a good initial study.”

Grand Rapids Mayor George Heartwell, who backs the passenger rail concept, said he’d like to see it “be a reality” rather than a “pipe dream of train enthusiasts.’’

“I suspect that people here would want to make good use of a train if it was available to Detroit for business, for entertainment, to go over and see a Tigers game in the afternoon and the Red Wings in the evening,” Heartwell said. “I hope there would be a similar appetite in Detroit to come over to Grand Rapids … for ArtPrize or to drink the craft beers.”

But Heartwell sees more taxes as the stumbling block.

“If you are looking at Proposal 1, you say it’s a pretty slim appetite,” the mayor said of last spring’s statewide road proposal that was trounced by voters.

State officials said they are interested but proceeding cautiously.

“MDOT is working with the locals to address the legislative requirements, but there is a lot of ground to cover before this would advance beyond a study,” said Tim Hoeffner, director of MDOT’s office of rail. “We will need to examine various factors like what the ridership and revenue will be, where the operating funding would come from, whether or not communities would provide stations, would the host railroads allow it, and what kind of safety systems are needed.”

Still, Treutel said there is a “viable reason to look at this right now” in part because Amtrak ridership has been climbing over the last decade.

Michael Ford, the CEO of the Regional Transit Authority, said that although his focus is on improving transit in southeastern Michigan, the discussions for the passenger rail service are important for the public to weigh.

“Any mobility options that can connect the region from a city like Grand Rapids into Detroit would be obviously very, very important,” Ford said. “People want more mobility, they want to be able to get to great cities and go back and forth and not have to take their car.”


Operation Lifesaver awarded grant to boost rail safety education and awareness

qi9kIxKKThe state is getting a new grant to boost rail safety education. Michigan Operation Lifesaver has been awarded $8,400 from Operation Lifesaver, Inc., in partnership with the Federal Railroad Administration.

It is part of the nonprofit safety group’s ongoing “See Tracks? Think Train!” public awareness campaign.

The money will be used to boost awareness on billboards, movie theater advertising and displays for public events.

Federal statistics show that about every three hours, a person or vehicle is hit by a train in the United States.

Michigan ranks 10th nationally for crossing collisions train incidents, with 13 deaths from 79 crashes in 2014 according to Sam Crowl, State Coordinator for Michigan Operation Lifesaver.


New East Lansing Station to open this summer

From the Lansing State Journal:

The new Amtrak Station in East Lansing .(Photo: Dave Wasinger/Lansing State Journal)
The new Amtrak Station in East Lansing .(Photo: Dave Wasinger/Lansing State Journal)

The new Amtrak station near Harrison and Trowbridge roads will be complete this summer (2015).

The station, which is part of the new $6.3 million Capital Area Multimodal Gateway, will be three times larger than the existing station on the property. It will have an enclosed lobby with floor-to-ceiling windows as well as luggage and bike storage, said Laurie Robison, spokeswoman of Capital Area Transportation Authority, which operates the station.

There is no set date for completion of the station. Construction crews just have to finish mechanical and electrical work before final inspections can begin, Robison said.

Once the station is ready to open, CATA will demolish the smaller station – something customers have been waiting for.

“It’s absolutely needed,” said Gerald Lee, of Lansing. “This station is very small and a lot of Michigan State University students use it when they move in. I can’t wait.”

Lee was waiting for a Greyhound bus to Buffalo, N.Y., to meet with his six sisters for a small family reunion. Lee said he uses the bus service at the station three times a year, but would likely travel more often when the new passenger station opens.

Renovations include adding four canopied bus bays, 150 parking spaces with a payment kiosk and an overflow area for taxis and buses. When the project is fully complete this fall, the station will serve as a transit hub for Amtrak trains as well as bus service from Greyhound, Megabus and Indian Trails.

Jonathan Keith, a cab driver for M-Cab, is relieved there will be spaces for taxis. In the cramped parking lot only made smaller by construction, Keith said he’s had to wait 15 minutes to exit onto Harrison Road with a van full of passengers.

“It’s a pain,” Keith said. “Buses just park on the road because they can’t navigate through the parking lot. This is long overdue. I’m glad CATA stepped up to it.”

Work began on the property in August 2014 when the former Michigan State University Surplus Store and Printing Services buildings were torn down. MSU owns the site and leases it to CATA.

The project is funded by a $6.3 million grant by the U.S. Department of Transportation.


Algoma Central Railway stakeholders back to the table

From the Sault Star:

Photograph:  August 21, 2009   Ren Farley
Photograph: August 21, 2009 Ren Farley

ACR passenger rail service officially ceases Wednesday, July 15, 2015.

It’s the second time this year that passenger train service between Sault Ste. Marie and Hearst, Ontario has been threatened to come to a screeching halt.

Last week’s announcement that Railmark had not been able to meet the precondition of securing a line of credit for the operation and would not be running the passenger rail service after July 15 means it’s back to the drawing board for the stakeholder working committee in search of a new third-party operator.

Economic Development Corp. CEO Tom Dodds said late Tuesday that the train will stop on Wednesday.

In the meantime, Mayor Christian Provenzano, and Dodds, in his position as chair of the stakeholder working group, are both penning letters to CN Railway, requesting that they consider operating the service on an interim basis until a new operator is found.

“We know CN doesn’t want to run a passenger service but we’re trying to thread something together that will see the operation of the train for a period of time while we can work together and find an operator,” Dodds said.

CN Rail could be the recipient of the federal government subsidy provided to operate the train.

“We appreciate that they don’t want to run the train full time. That’s why we began this process but unfortunately, it didn’t net us the result we were looking for,” Dodds said.

CN Rail was ultimately responsible for choosing the third-party rail operator.

It was the city who chose not to sign a contractual agreement with Railmark because it failed to meet a precondition of securing a line of credit of about $550,000 – or three months of operational costs.

Dodds said that work is being done to rework the expression of interest and request for proposals into one document in an attempt to get interested parties to submit a proposal and business plan.

“We’re hopeful that we can drive to a quicker solution because we’ve been done this already,” he said.

Of the original 20 or so expression of interests that were initially received, four serious applications were received.

Of those, one proponent revealed he didn’t have the experience required and withdrew.

Eventually, Railmark had been selected.

Dodds said media reports about the situation have created a renewed interest in the route again.

The reinstatement of the federal government funding also offers more hope that another viable proposal will come forward, he said.

“The reality is we need someone who can pick up and run that train Thursday, but I have no sense right now if that is possible or not,” he said. “CN has been given the information and they need to make their decisions internally.”

The ideal candidate would be a current Canadian operator who already has the licencing and insurance requirements needed to run the service.

Also needed is enough trained rail crews to ensure that standards are met and relief engineers are available to meet the ‘go slow’ orders on the track.

Familiarization of the line also becomes an asset with those orders.

But Dodds said all options will be explored.

Sault MP Bryan Hayes said he hasn’t been officially asked to do anything at this time but has been involved in the process since the beginning and will continue to serve as an intermediary between the working group and Transport Minister Lisa Raitt.

“The stakeholder group is going to continue to work with Transport Canada officials to develop a solution,”Hayes said.

“I have been assured by Minister Raitt that the money is still there but we want to find a qualified operator. It’s unfortunate that things didn’t pull through with Railmark.”

Hayes said if a new operator is found, the same due diligence process will have to be undertaken by the federal government, ensuring that a viable business plan is in place.

“Whoever comes forward still has to have a business plan that makes sense to the federal government. We want long term sustainability without ongoing requirements of federal funding down the road,” he said.

Hayes said he will support the city and the stakeholder group and do what he can to assist from the federal government perspective.

He too expressed hope that CN considers running the train service in the interim.

“They have expressed that they are not interested in the passenger service. . . They continue to be supportive of a third party operator but I hope in the interim, they step up because if they don’t, it will shut down until we find a third party operator,” he said.

Railmark provided the passenger train service since May 1 without any government subsidy because the agreement had never been signed.

Dodds said that to his knowledge, there has been no request or action from Railmark to receive funding.

“I don’t know of his intent but there was no agreement in place and there never was,” Dodds said.