News Column

Exclusive Special Report: All Aboard Florida seeking $1.875 billion in federal loans

August 29, 2014

By Lisa Broadt, Treasure Coast Newspapers, Stuart, Fla.



Aug. 29--All Aboard Florida requested $1.875 billion in federal loans to help build its high-speed passenger rail line, according to public records -- though the private rail company contends its federal loan request stands at $1.6 billion.

All Aboard Florida submitted the $1.875 billion loan application on March 15, 2013. The Federal Railroad Administration had not completed its assessment of the application or made any decision on issuing the loan as of Aug. 15, according to a letter attached to the application.

But since filing the application, the request has decreased, according to All Aboard Florida.

"As we have publicly stated, our current pending ... loan request is for $1.6 billion," an All Aboard spokeswoman said, "there is nothing further that we have to share at this time." All Aboard declined to share any supporting documents.

Scripps Treasure Coast Newspapers requested all versions of the loan application; no application changes were included in the file.

The two loan documents totaling 189 pages obtained by Scripps lay out All Aboard Florida's plan to run 32 passenger trains along the Florida East Coast Railway, from Miami to Orlando, every day.

The loan request is split into two parts: The company requested $740 million for the 66.5-mile stretch from Miami to West Palm Beach and $1.135 billion for the 168.5 miles from West Palm to Orlando.

Nearly all other financial information in the documents, however, was redacted. Under federal law, documents that would disclose trade secrets can be withheld from public records requests.

But the documents did reveal new information.

All Aboard Florida's passenger rail and Florida East Coast Railway's freight trains will interconnect, according to the loan document. As Scripps previously reported, All Aboard Florida will build a second track along the existing Florida East Coast Railway corridor, currently used for freight.

Infrastructure improvements could allow for a greater volume of freight trains running at "somewhat higher speeds within the 128.5-mile corridor between Cocoa and West Palm Beach," All Aboard Florida said in the loan application.

The company said in the application it plans to upgrade its freight and passenger tracks from Class 4 -- the most common mainline track in the United States -- to Class 6.

As a Class 6, freight and passenger could run at speeds up to 110 mph, though that's unlikely for freight, according to Bob Ledoux, FEC senior vice president and general counsel.

Freight currently moves somewhere between 45 to 60 mph but with the rail upgrades those speeds could rise to about 70 mph, Ledoux said.

"But there aren't any passengers sitting there waiting for the train," he said. "Going faster doesn't necessarily benefit us."

All Aboard Florida's capacity models have "assumed operation of additional freight trains to accommodate the future freight growth," according to the loan request, and needed improvements to track and signal infrastructure are planned.

Freight will continue to run as passenger rail is built and upgraded, according to the loan application.

Other previously unknown and updated information:

--The environmental impact statement is nearly one year behind the schedule suggested by All Aboard Florida in the loan application. The document -- a highly anticipated report expected to answer many remaining questions about All Aboard Florida -- was scheduled for draft release in October 2013. But the FRA, which is responsible for the report, says there is no anticipated or announced release date.

--All Aboard will have 10 train sets with eight in service and two in the Orlando Maintenance Facility. Trains will rotate through service. Each train will consist of two locomotives, two business cars, one cafÉ/economy car and four economy/coach cars.

Federal law allowed All Aboard to flag any information that would disclose trade secrets or that contained certain confidential financial information. The Federal Railroad Administration then reviewed and redacted that information, according to a letter attached to the Railroad Rehabilitation and Improvement Financing Program loan application sent to Scripps.

Among the redacted information was:

--A ridership study, intended to determine whether the project will "meet existing needs for such service."

--All Aboard Florida's financial model.

--Its business plan.

--A description of the collateral it will put up for the loan, though documents previously obtained by Scripps Treasure Coast Newspapers, indicated All Aboard Florida would use the Florida East Coast Railway tracks as collateral, should it default on the mammoth federal loan.

About this story

As part of its continuing coverage of All Aboard Florida's plans for high-speed rail through the Treasure Coast, Scripps Treasure Coast Newspapers filed a Freedom of Information Act request with the Federal Railroad Administration in Washington, D.C.

In its March 13 request, Scripps asked for copies of the applications All Aboard Florida -- Operations LLC submitted for Railroad Rehabilitation Improvement Financing loan(s) to provide new intercity passenger rail service.

After seven phone calls and two emails, Scripps received the documents in the mail Aug. 25.

Most financial information was redacted.

FRA counsel William R. Fashouer said the redactions were allowed under law related to trade secrets. AAF was given an opportunity to submit potentially identifiable material and the FRA made an independent determination whether those were allowable under the law, Fashouer said.

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(c)2014 the Treasure Coast Newspapers (Stuart, Fla.)

Visit the Treasure Coast Newspapers (Stuart, Fla.) at www.tcpalm.com

Distributed by MCT Information Services


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Source: Treasure Coast Newspapers (Stuart, FL)


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