May 03, 2017
Investors float $2.8 billion plan to get around Chicago's rail bottleneckComments Email Print
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A former software businessman and president of the Union League Club has formally asked a federal regulator to approve his plan to build a $2.8 billion, 261-mile freight railroad line that circumvents Chicago.
The Great Lakes Basin Transportation company, chaired by Frank Patton, filed an application today with the Surface Transportation Board. The company is seeking permission to construct a privately funded railway that would charge other railroads to use its tracks to skirt the congested city. It is an attempt, company President James Wilson writes in the application, "to do something no one has attempted for over a century: to build a new common carrier freight railroad bypassing the Chicago area."
But while the company has 10 principal investors—whose names are redacted from the application—it has yet to obtain funding to complete the project. Nor is it expected, according to the application, until Great Lakes Basin "receives (Surface Transportation Board) authority to construct the proposed line."
Patton, 74, who sold his company Portfolio Dynamics in 2002, has championed the project for eight years. In 2015, the transportation board began studying the proposed railroad's environmental impact. Since then, Great Lakes Basin has asked for an extension, and then a suspension, of the study, while it hurried to provide requested information and finish its formal application by the May 1 deadline.
The proposal lands at a time when the new chief executive at CSX, one of the six major railroads operating in Chicago, has advocated diverting freight traffic away from the city. About 25 percent of the country's freight moves through the region, with 29 to 50 percent of that volume passing through en route to another destination, according to the application.
"If Chicago's rail facilities are overwhelmed by today's freight volume, they will be even less adequate to handle the much greater traffic levels projected for future years," the application says.
The railroad proposed by Great Lakes Basin would skirt downtown by 38 to 89 miles at any given point, the application says. The route runs from near Milton, Wis., in the north, past Rockford, Rochelle and Kankakee in Illinois, and terminates near La Porte, Ind. With 36 interchanges, it would allow 110 trains a day to bypass Chicago.
The railroad could be fully operational within three years of the transportation board's final approval and obtaining construction financing and legal right-of-way, the application says.
The project will be funded through a combination of debt and equity financing. A pro forma income statement has Great Lakes Basin losing $151 million in 2021 but turning a $216 million profit in 2025.
The news was first reported by the Post-Tribune.
Above is from: http://www.chicagobusiness.com/article/20170503/NEWS10/170509929/railways-plan-takes-aim-at-chicago-freight-bottleneck
