This has been in the works now for a while, and I believe it is likely to go.
Posted by PullmanCo (Member # 1138) on :
The Flagler lines re-embracing passenger?
This I've got to see...
Posted by Gilbert B Norman (Member # 1541) on :
Quite simply, volks, there will never be a passenger train operating over the Florida East Coast Ry FOR THEIR OWN ACCOUNT. I give Amtrak operation over the FEC at best a 50-50. So long as Martin County FL remains "train hating" country, I do not foresee any Northward expansion of Tri-Rail to locations such as Stuart (FEC) or Northwestward to, say, Indiantown (CSX) as Florida law requires any county desiring rail service to impose a tax (ad valorem or excise) dedicated to that rail service's funding.
A locally funded intercity Corridor operation including the FEC?. Oh, about the same as Atigun taking the Belmont (Edit: he did "Show" let it be noted).
Because the "private equity" outfit that bought up FEC cannot make a buck with the present capitalization (about 90% debt), they are looking for a buyer - and the buyer they have in mind is the State. Neither of its JAX interchanges is interested in acquiring it owing to the debt structure - and the shippers, be they in place or "in waiting" post-PANAMAX, do not want any merger either, for they want the South Florida maritime ports to be "open", i.e. there is a competitive rail service, albeit in this case it is 350 miles away in Jax.
This "faux passenger rail initiative" is simply a ploy to make any proposed sale to the State, which has a "whale of an interest" in ensuring a viable rail connection open to all, more palatable to the voters. Should such a sale be consummated, the passenger initiative will sort of go the way of Sunset East.
Finally, a word on FEC; during 2010, they made about $25M on railroad operations, but owing to the leveraged buyout, they are burdened with about $35M in debt service costs (2011 results have not been publicly disclosed). So long as that debt structure remains in place, they "ain't a gonna make it', and a bankruptcy petition is simply inevitable and worse to "massa", a bankruptcy court might attach non rail assets to satisfy railroad creditors (I'm not enough of a lawyer to pass an opinion on whether or not such could come about).
It's a ploy; enjoy the fun and dreaming while it lasts.
Posted by Doodlebug (Member # 4564) on :
I have no way of knowing the likelihood of restoring passenger service to the FEC, nor do I understand high finance (or low, for that matter). But I'm acquainted with the FEC's antipathy to labor unions and its relationship to the cessation of passenger service in the 1960s as well as the near-universal objection of all major U.S. freight railroads to restoring their own passenger service.
So I've been skeptical about FEC's passenger plans from the first word of it. GBN has, as far as I can tell, beaten every news media organization in providing a plausible motive for what FEC is doing that doesn't rely on taking FEC's plans at face value. Thanks. I find it difficult to believe that the railroad really intends to launch a passenger service.
Posted by George Harris (Member # 2077) on :
Does that $35 mil in debt service cost include any payoff of the principal? If not, then they are a sinking boat.
Posted by Gilbert B Norman (Member # 1541) on :
Mr. Harris, debt service refers to the entire cost (note I avoid the term expense), interest and principal, a borrower entails to meet the covenanta of the loan agreement. That $35M is the amount of cash they must "come up with' in order to satisfy the agreement. In this case as I recall, some is directed to principal repayments and maybe there is a sugar daddy to see 'em through it. Otherwise as you note, time to man the lifeboats on the Titanic.