June 5, 2017

Rail regulators ask Great Lakes Basin for more info before acting on rail line bid

New rail line to bypass Chicago; UPS supports proposal.

By DC Velocity Staff

Federal rail regulators have asked Great Lakes Basin Transportation Inc. (GLBT), which plans to build a 261-mile rail line connecting with six of North America's seven largest railroads to bypass Chicago, for more information before they can evaluate its bid to resolve the bottlenecks that plague the nation's busiest and most congested rail hub.

In a decision issued Friday, the Surface Transportation Board (STB), which oversees what remains of rail regulation, asked GLBT to provide a list of cities and counties to be served; GLBT only submitted a list of the counties, the agency said. The Board also directed GLBT to file a copy of its latest balance sheet and income statement documents. The Board also rejected GLBT's designation that its list of its 10 principal stockholders and their respective holdings be classified as 'highly confidential."

The agency set a June 22 deadline for filing the additional information.

The privately funded line would skirt Chicago to the south, passing through counties in Indiana, Illinois, and Wisconsin. According to GLBT, the line would permit a train to travel between any two of 26 proposed interchange points in eight hours or less. Currently, it can take as long as 30 hours for trains to navigate Chicago's existing rail network to deliver goods not destined for the city or its environs. GLBT said the line would allow up to 110 trains per day to avoid the Chicago terminal.

In response to concerns that the line would encroach on residential neighborhoods, GLBT said it would build a one- to two-mile buffer zone separating it from towns along the proposed route.

GLBT founder Frank Patton has called the line the largest freight rail project in the Chicagoland region in more than a century.

The proposed railroad is part of an ambitious multi-modal scheme that includes the construction of the "Burnham Expressway," a privately funded toll road designed to route traffic around Chicago by connecting the Indiana Toll Road with five interstate highways, and an airport in Chicago's southern suburbs that would relieve traffic congestion at O'Hare International Airport northwest of the city and at Midway International Airport on Chicago's south side.

Three of the top five executives, Jim Wilson, vice chairman and president of Great Lakes Basin Transportation; Mike Vlaszak, chief legal and administrative officer of the parent; and William Miller, chief commercial officer, spent time at the old Santa Fe Railway, which was acquired by the former Burlington Northern Railroad Co. in 1995 to become what would eventually be known as BNSF Railway.

Two of the six "Class I" railroads, Omaha, Neb.-based Union Pacific Corp. and Norfolk, Va.-based Norfolk Southern Corp., have said they would not participate in the project. Other railroads would have to pay to gain access to the line, and those that aren't interested may believe that the cost would be too dear or that a new line would threaten their own market shares.

However, Atlanta-based UPS Inc., the nation's largest transportation company and a huge user of the rails to move intermodal traffic, supports the proposal.

In an April 28 letter to the STB, UPS said that "any effort to build new rail capacity and bypass the notorious Chicago rail bottleneck would have a material positive impact on the fluidity and velocity of the freight rail network, and a direct benefit to UPS and our customers."


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