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The first private-sector investment in inter-city passenger rail in the United States for well over half a century is underway, with the first trains scheduled to enter service in mid-2017. Mike Reininger, president of All Aboard Florida, talks exclusively to David Briginshaw about this ambitious venture.
THE United States is about to witness the rebirth of profitable passenger rail. All Aboard Florida has nearly completed raising $US 5bn of private capital in a combined passenger rail and property venture to introduce an inter-city rail service along Florida’s east coast between Miami and Orlando.
This project turns on its head decades of perceived thinking in the United States that inter-city passenger rail cannot make money and should be left to the public sector. The last private investment in long-distance passenger rail was made in the 1950s and 1960s when the Class 1 railways had a last throw of the dice in a bid to fend off competition from the rapidly expanding airlines and interstate highway network by investing in streamliner trains. This largely failed and led to the formation by the federal government of Amtrak in 1971, which has had a monopoly on the operation of inter-city and long-distance passenger trains ever since. This allowed the Class 1 railways to concentrate on freight while hosting Amtrak trains on their tracks.
There is a fundamental difference between the traditional way of funding passenger rail investment and All Aboard Florida’s approach, as the company’s president, Mr Mike Reininger, explains: “Our approach is pretty different from that of other transport-only services where traditionally they target ridership at the lowest cost possible. We view this more as a hospitality product than as public transport. We are targeting revenue rather than riders, looking for the optimal revenue profile.” There are around 500 million car trips annually between Miami, Fort Lauderdale, West Palm Beach and Orlando, which will be served by the new train service. “We only need to capture a small percentage of the travel market – single-digit penetration gets us to profitability,” Reininger says.
The first phase of the project between Miami and West Palm Beach is expected to attract 3 million riders after 18 months of operation, while the entire route to Orlando is expected to push annual ridership up to 5 million passengers a year over the following 18 months, after which the rate of growth will slow to more normal levels. “This will get us to profitability,” Reininger says.
According to Reininger, the project has attracted “overwhelming” interest both in Florida and further afield, and tremendous support from the state which appreciates the private-sector input into transport, which has produced a huge amount of goodwill. Nevertheless, Reininger recognises that most Americans either drive or fly and rail is rarely an option for an inter-city trip, and certainly not in Florida. “Travelling by train in the US is not as instinctive as elsewhere so we need to make people more aware of rail travel,” he explains. “But it cuts both ways. While rail travel is not at the top of most people’s minds, the novelty and newness will attract them to try out our service. We then need to convert them into regular users.”
All Aboard America is a subsidiary of Florida East Coast Industries which is owned by private equity funds managed by affiliates of Fortress Investment Group, a global investment manager set up in 1998, which currently manages assets worth $US 70.6bn. It was Fortress’ co-founder and co-chairman Mr Wesley Edens who first had the idea for the rail and property project.
A big advantage of the scheme is that it is able to use the existing Florida East Coast Railway (FECR) right-of-way and land, and only a relatively short section of new railway construction is required. FECR is aligned with sister company, Flagler Global Logistics, which is also a subsidiary of Florida East Coast Industries.
The railway element of the project requires an investment of around $US 2.5bn to:
- upgrade the existing 321.8km line between Miami and Cocoa
- build a new 64km line from Cocoa to Orlando
- resignal the line including the provision of Positive Train Control
- build new stations at Miami Central, Fort Lauderdale, and West Palm Beach
- equip the new station at Orlando Airport which is being built as part of an intermodal terminal to serve the new South Terminal at the airport, and
- acquire a fleet of 200km/h trains from Siemens.
Upgrading the existing railway includes doubling the remaining single-track sections and increasing line speeds. The FECR line runs at grade through a densely populated area between Miami and West Palm Beach and this 107.8km section has 180 level crossings. Even the 214km segment from West Palm Beach to Cocoa has 170 level crossings.
The new signalling system includes upgrades to level crossings, effective communications with approaching trains, a system for triggering level crossing gate opening and closure, and regulation of train-crossing times. As a result, All Aboard Florida’s trains will clear level crossings in under 60 seconds, which is less time than road vehicles wait for a traffic light.
Even so, the Miami - West Palm Beach section will be restricted to 127km/h. Trains will be able to accelerate to 177km/h between West Palm Beach and Cocoa, while the new 64km line from there to Orlando is being designed for 200km/h operation. These speeds will make the new rail service highly competitive with road (Table 1).
Miami Central and Orlando will be the two largest stations. Miami Central will have five platform tracks, three for use by All Aboard Florida, and two reserved for a future extension of the TriRail commuter rail service which connects Miami with West Palm Beach on a separate alignment. Orlando station, which was originally intended for use by the Orlando - Tampa high-speed rail project (aborted in 2011), will have three platform tracks with space for a fourth.
This article first appeared on www.railjournal.com
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