Tuesday, May 02, 2017

Software tycoon plans belt line around Chicago

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Software tycoon plans belt line around Chicago GLBT Inc.

An investment group is seeking federal permission to construct a privately-owned, all-new railroad that would bypass the congestion of Chicago.

Great Lakes Basin Transportation Inc. on May 1 filed an application with the Surface Transportation Board to construct and operate as a common carrier a railroad line through parts of Wisconsin, Illinois, and Indiana.

In the filing the Delaware-incorporated company cited statistics showing the decades-old congested network of rail routes through Chicago delays 500 or so trains – about 25% of all rail-borne U.S. freight – each day. While it noted the volume of rail freight is projected to grow by 80-90% by 2040-50, the company added in the filing that there haven’t been any significant additions to the Chicago rail infrastructure since 1907.

It called the process of moving railroad shipments through Chicago “slow, inefficient and time-consuming,” and the rail infrastructure “woefully inadequate” to handle current traffic moving from railroad to railroad. It said it takes trains as long as 30 hours to pass through the Chicago area, longer during severe winter weather.

Great Lakes plans to build an “entirely new” 261-mile railroad from 38 to 89 miles from downtown Chicago, fully grade-separated from other rail lines and highways, for the purpose of moving up to 110 freight and passenger trains through Chicago without stopping. It would interchange with all the Class 1 railroads except Kansas City Southern, and six regional railroads via 26 interchange points. (Download the map from the link below.)

The new railroad would improve the flow of freight and passenger trains originating and terminating in the Windy City, the company stated.

The corporation lists 24 investors led by majority shareholder Frank Patton. Patton left Lehman Brothers to found financial software start-up Portfolio Dynamics in 1970, which he sold in 2002. He first proposed a number of years ago a toll road for trucks around Chicago before transitioning to a rail concept.

In 2016 Patton convinced 14 investors to contribute as much as $50 million to help pay for the STB’s environmental study of the proposal, including James Wilson, a former assistant vice president of operations for Santa Fe. Wilson is Vice Chairman of Great Lakes.

Patton in published reports said that he has had discussions with potential railroad partners dating to 2009, but has not disclosed details.

In the filing Great Lakes said construction would require no public funding, and would be paid for mostly through the sale of debt securities. It pegged construction costs at $2.8 billion.

The application is STB Finance Docket No. 35952. (Download the docket from the link below.)

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