As All Aboard Florida continues with its plan for high speed passenger rail service from Miami to Orlando, bits and pieces of the plan have become more evident. Within a brief period of time that the public has become aware of the plan, most of the citizen concerns have been focused on public safety, noise and other quality of life issues.
However, there are two additional concerns that should be discussed in depth: financing and freight. In a recent Martin County Taxpayers Association TV debate with an AAF executive on WPTV, Channel 5, a comment was made that AAF was not asking for public financing.
However, it is our understanding that AAF is requesting a Redevelopment Rehabilitation Improvement Finance loan of approximately $1.5 billion. Whether this is a direct loan or a federally guaranteed loan is unknown. Since we have limited information regarding the finance strategy, the whole idea of paying back the loans with passenger service seems remote.
What we do know is this:
First, we cannot find any passenger train systems in the United States that break even, let alone produce a profit. We believe there are only two passenger services in the world that make a profit. Having said that, AAF states that their passenger service will be able to pay back the loans as well as produce a profit. We question that premise.
For the record, there are a number of passenger trains running in Florida and all are subsidized. At a May 15 MCTA-sponsored public forum, Congressman Patrick Murphy noted that U.S. passenger rail service “has a history of unprofitability,” inferring that AAF would fare no better.
Additionally, AAF has been unwilling to talk about collateral. Fundamentally, if there is insufficient collateral to secure a loan it is possible that the federal government (the taxpayers) could be responsible for the loan if it defaults. For example, because the federal government is highly desirous of high speed rail service there could be loans made with only the trains as collateral — but not the tracks.
Thus the question: “Why is AAF proposing the service?” We believe there are several reasons.
In AAF’s conglomerate of companies there is one that owns key parcels of land that will become more valuable if the trains run between Miami and Orlando. Of particular note are the large commercial tracts in downtown Miami that will have increased commercial value.
In a previous MCTA article, we noted that the most significant factor in the AAF plan is freight. The Panama Canal is in the final stages of redevelopment and this expansion will nearly double the freight capacity. Also, the canal redesign facilitates the use of large mega-ships that transports containers. The Miami port has just finished its own redevelopment and is now the only port on the eastern seaboard south of Norfolk, Virginia, that can handle these mega-ships.
When presented with the question, “Will there be more freight trains as a result of these developments?” the answer was “it’s speculative.” That is correct. However, what seems clear is the fact that there will be an increase in freight moving on the tracks, which translates into more trains. How much is debatable.
In conclusion, AAF is desirous of moving forward with the plan to double the tracks along Florida’s eastern seaboard. Sixteen trains per day, two trips each way equates to 32 trips through our area each day. This doubles the number of trains that currently running and thus creates serious doubt that the Treasure Coast will not be negatively impacted by this ambitious plan. We therefore continue to oppose it.