FEC in talks to run Tri-Rail

Discussion about Florida commuter rail operations including Miami/Dade Metrorail, Sunrail (Orlando), and Tri-County Commuter Rail Authority in southern Florida. All Aboard Florida (Brightline) is discussed here: Florida East Coast Railway).

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FEC in talks to run Tri-Rail

Postby JasW » Mon Aug 29, 2011 6:43 am

I meant to post this last week when it came out. I'm surprised no one else has. From what I can gather, FEC would run Tri-Rail on the CSX tracks (and possibly extend service north of Mangonia Park on its own tracks?). It's hard to tell exactly what is going on with this idea from the article. But note that it points out that service could not be shifted off of the CSX tracks to FEC tracks because the state would then be required to repay the federal grant money used for double tracking.

Sources: State talking to FEC about running Tri-Rail; cutting Tri-Rail board out of talks

A Palm Beach Post exclusive
By Joel Engelhardt and John Kennedy

Palm Beach Post Staff Writer

Updated: 7:43 a.m. Wednesday, Aug. 24, 2011

Posted: 8:05 p.m. Tuesday, Aug. 23, 2011

The state has been in secret talks to transfer the operations of the South Florida commuter rail line, Tri-Rail, to the Florida East Coast Railway, The Palm Beach Post has learned.

The FEC, owned by the $44 billion capital management firm Fortress Investment Group, wants to provide passenger service on its line, which cuts through downtowns along the southeast coast. Tri-Rail operates on the CSX Railway farther to the west.

Negotiations have been so quiet that even Tri-Rail board members have not been informed.

"This has been so cloak and dagger the way this is all working out," said Tri-Rail board Chairwoman Kristin Jacobs, a Broward County commissioner. "We've never had dealings with another public agency where we were not at the table."

The talks have been led by the Florida Department of Transportation, which contributes about $30 million a year to Tri-Rail's $61 million annual capital and operating subsidies. About $13 million comes from Palm Beach, Broward and Miami-Dade counties and the rest from the federal government.

Those close to the negotiations say legislation is likely to be proposed for the session beginning in January that would allow private firms to bid on running Tri-Rail, with the winning company agreeing to operate and manage the line at a price below the current taxpayer contribution.

If FEC were selected, it could gain political leverage and state savings that could be used to help finance its push to improve its freight line along the state's east coast. A $300 million expansion and improvement project has been under review for several years but has languished in the weak economy.

Gov. Rick Scott, who has ridiculed Tri-Rail for falling short of meeting its operating costs - fare revenues bring in just $11 million a year - is open to the idea of turning over management and operations of the train to a private company, at the right price.

"The governor is always willing to privatize portions of state government that doesn't compromise public safety or necessary services," said Steve MacNamara, Scott's chief of staff. "But I have not yet seen a good privatization plan for Tri-Rail."

The Republican governor used Tri-Rail as a weapon last spring against the state's high-speed rail proposal. Scott refused $2.4 billion in federal money for the Tampa-to-Orlando leg of high-speed rail, saying he didn't want to become embroiled in another money-losing venture.

On Aug. 5, in an address to road-builders, Department of Transportation Secretary Ananth Prasad announced that the state would embark on a public-private partnership along the Tri-Rail corridor "where we can expand service, lower the cost to the taxpayer, all while providing quality services to the customer."

Negotiations have not focused on a Tri-Rail takeover, FDOT spokesman Dick Kane said, but rather on running passenger rail on the FEC line and "perhaps running Tri-Rail so as to extract savings and directing those savings to expand service along their tracks."

The talks came as news to Tri-Rail officials, who say they already have privatized 80 percent of their services. For example, Veolia Transportation of Chicago has a seven-year, $64 million contract to oversee operations, and Bombardier Transportation of Montreal has a seven-year, $90 million contract for train maintenance. The FEC has never bid on those contracts.

The Scott administration has little control over the decisions of the South Florida Regional Transportation Authority, the nine-member board that oversees Tri-Rail. The governor has just three appointees to the board, dominated by officials from Miami-Dade, Broward and Palm Beach counties. The chairwoman, Jacobs, is a Broward County Democrat.

Among the governor's advisers on transportation is Robert Poole of the Reason Foundation, who advocates road-building over passenger rail. He served on the governor's transition team and will be among the speakers, along with Jacobs and an FEC vice president, at a transportation forum this afternoon at Lynn University.

On Friday, the Tri-Rail board is expecting an appearance by Jim Wolf, the head of FDOT's Fort Lauderdale office. FDOT has not revealed the subject of his presentation.

FEC has been pursuing expansion in South Florida since Fortress' $3.5 billion buyout of Florida East Coast Industries in 2007. Fortress' purchase included the railway, with its freight line from Jacksonville to Miami, and the Flagler Development Group, an owner of office and industrial space.

The rail line is poised to profit from the expansion of the Port of Miami, recently keyed by the Scott administration's infusion of $77 million toward a dredging project to enable the port to accept the largest cargo ships from the soon-to-be-expanded Panama Canal.

The FEC also is moving forward with government-subsidized, $50 million projects to provide direct links between docks and rail lines at the Port of Miami and Port Everglades in Broward County.

To make passenger rail work with freight on the FEC line, Husein Cumber, an FEC vice president, said the company would seek to add two lines within its 100 foot right of way . If the FEC could run Tri-Rail for less money, its reward could be valuable land density increases near train stations.

It is unlikely that the FEC could usurp the CSX line for passenger service south of Mangonia Park to Miami, because the state would be forced to repay a $275 million federal grant if it halted passenger service on the CSX. That money paid to add a second set of tracks in 2006.

But because the CSX tracks curve westward after the northernmost Tri-Rail stop in Mangonia Park, the FEC offers the only option for passenger service in northern Palm Beach County and beyond.

source
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