The Great Chicago Rail Loop - Why It's Needed

Executive Offers $8 Billion Remedy for Midwest Rail Logjam

Excerpt:

A software industry veteran is taking on one of the toughest problems facing the U.S. railroad industry: the chronic traffic bottleneck surrounding Chicago that can take more than a day for freight trains to move through.

Frank Patton, 73 years old and chairman of fledgling Great Lakes Basin Transportation Inc., wants to build a privately-financed rail route through Illinois, Wisconsin and Indiana that would allow trains to loop around the congested rail hub.

Mr. Patton’s proposed 280-mile line would reduce the about 30-hour train travel times through Chicago to eight or 10 hours. It would take about five years to permit and build and cost $8 billion, he said, monies that eventually would be paid off by user fees from the six major North American railroads the line intends to serve.

Its hurdles are many. Great Lakes Basin Transportation still has to assemble financing and obtain regulatory and environmental approvals. And the plan faces opposition from affected landowners and a so-far cool reception from railroads, which are pushing their own plan to dislodge the Chicago rail logjam.

But Mr. Patton is undaunted. “Anybody who looks at the projections for a 60% increase in traffic by 2040, they know something has to happen,” he said. “The Chicago terminal is one snowstorm away from disaster.” He is moving quickly to get regulators’ approval and to line up financing.

Comment: Great Lakes Basin Transportation Inc. See The Chicago Railroad bottleneck:

Shippers complain that a load of freight can make its way from Los Angeles to Chicago in 48 hours, then take 30 hours to travel across the city. A recent trainload of sulfur took some 27 hours to pass through Chicago — an average speed of 1.13 miles per hour, or about a quarter the pace of many electric wheelchairs.

Think:

Chicago's shell game

How Chicago has used financial engineering to paper over its massive budget gap
Excerpt:

Two administrations have:

• Used long-term debt to finance everyday expenses and maintenance;
• Used long-term debt to finance judgments and settlements, including police brutality cases, and retroactive wage increases and pension contributions for its unionized employees;
• Restructured the city’s existing debt to extend the maturities on its bonds far out into the future in order to avoid having to pay the debt as it was coming due;
• Borrowed more money than it needed in order to make payments on the bonds its was issuing to avoid debt service expenses, essentially using debt to pay debt; and
• Possibly used the city’s portfolio of interest rate derivatives as an ATM.

Comment: "Conjurer Bosch" by Hieronymus Bosch (circa 1450–1516). See wiki on shell game. Next decade's Detroit!

The Chicago Railroad bottleneck

Freight Train Late? Blame Chicago

Excerpt:

Shippers complain that a load of freight can make its way from Los Angeles to Chicago in 48 hours, then take 30 hours to travel across the city. A recent trainload of sulfur took some 27 hours to pass through Chicago — an average speed of 1.13 miles per hour, or about a quarter the pace of many electric wheelchairs. With freight volume in the United States expected to grow by more than 80 percent in the next 20 years, delays are projected to only get worse. The underlying reasons for this sprawling traffic jam are complex, involving history, economics and a nation’s disinclination to improve its roads, bridges and rails. Six of the nation’s seven biggest railroads pass through the city, a testament to Chicago’s economic might when the rail lines were laid from the 1800s on. Today, a quarter of all rail traffic in the nation touches Chicago. Nearly half of what is known as intermodal rail traffic, the big steel boxes that can be carried aboard ships, trains or trucks, roll by or through this city.

Winter Took its Toll on the Achilles’ Heel of American Railroads

Excerpt:

CSX Corp.chief executive Michael Ward insisted today that the railroad operator is not running out of capacity, even as analysts questioned the continuing costs, delays and fallout from the great rail tie-ups and tangles of the first quarter. “You don’t build the church for Easter Sunday,” Mr. Ward said in an interview after his first quarter earnings call. “We have plenty of capacity for all the growth you can foresee — but not for one of the coldest and snowiest winters in history.” Normally in Chicago, you have either cold winters or snowy winters, he told the analysts. “It’s highly unusual the winter is both,” he said. But in what has become a railroad mantra lately, he said there had been twenty-five significant snowfalls during the third coldest winter ever in Chicago this year. And Chicago happens to be the Achilles’ Heel of the rail system — a major bottleneck where all the major railroads converge. Problems there have a “cascading impact” on the rest of the network, Mr. Ward said.

Here's the long-term solution:

Plan floated for $3 billion Chicago rail bypass

Excerpt:

Under the plan, a six-track, freight-only rail line would be built between Coal City, Ill., and Wellsboro, Ind., in a portion of the right-of-way that transit officials hope to acquire for the proposed Illiana Expressway. The line could be extended farther west later. The $3 billion structure faces all kinds of obstacles, not least among them the fact that the Illiana Expressway still is just a dream. But the idea of getting private investors to put up money that would be repaid by railroads paying charges to use the tracks does have a certain big-picture beauty to it. That would make the line something like a public utility.

The Chicago political culture: "where money and government power seem especially fungible"

The Chicago Way, on Tape: This wiretap was golden

Excerpt:

The Governor's comments were taped in court-approved wiretaps and include such self-incriminating classics as: "I've got this thing [the power to appoint Barack Obama's Senate replacement] and it's [expletive] golden, and, uh, uh, I'm just not giving it up for [expletive] nothing. I'm not gonna do it. And, and I can always use it. I can parachute me there." We recommend the entire 76-page FBI affidavit for every high school civics course as proof of the need for political checks and balances.

Comment: 76-page FBI affidavit & Dept of Justice press release. If you have Acrobat Reader - search for "Candidate 5" in the 76-page FBI affidavit. Think "son of shakedown". More from the Wall Street Journal editorial:

If convicted, Mr. Blagojevich would be the second consecutive Illinois Governor to be found guilty of a felony, and the fourth in 35 years. We'd ask if it's something in the water, but that would be unfair to the Chicago River. It is certainly something in the Chicago political culture, where money and government power seem especially fungible.

....

Now would be a good time for the President-elect to say that Mr. Blagojevich and his cronies should have nothing to do with naming Mr. Obama's successor. And that, given the taint of corruption that now hangs over any choice, the state should hold a special Senate election.