Railroad Tycoon II - $556.2 Million
Given the success of rail projects in West Texas since the completion of the UPRR in the late 1800s, I like to watch for news regarding the latest attempt at North-South Rail in the Basin, specifically the Seagraves-McCamey rail line.
It seems the La Entrada El Pacifico Rural Rail Transportation District and MOTRAN have had the 46-page Economic and Feasibility Study by Cambridge Systematics since late March. The MRT had a quick blurb about the study being presented to the MDC, but details were few and far between.
Recently, the plan was presented to the Seminole EDC, and their reporting was a little more insightful. Where the MOTRAN officials quoted the $3.7 Million per mile figure, the folks in Seminole did the math for the readers:
In total, the estimated price tag presented by Cambridge Systematics, Inc. in the report for the 147.6 mile extension from Seagraves to McCamey would cost $556.2 million to develop.
Now Seminole is mainly interested in the first phase of the project which would extend the line to them from Seagrages for about $44.4 Million. This part may be economically feasible, but the rest?
According to 2003 highway figures produced by Cambridge Systematics, Inc., a line extension south from Seagraves to Seminole or Odessa has the potential to divert 34,067 annual trucks from U.S. Hwy. 385 to rail, which would represent an estimated 6,500 rail carloads annually. The report further stated the segment between Seagraves and Seminole (U.S. Hwy. 385) displayed the highest tonnage in goods--2.8 million tons annually--with 1.5 million of that total figured into the transpiration of non-metallic materials.
Since this is a Ports-Plains enterprise, I did a little checking and a cottonseed rail car from Lubbock to Denver will cost you about $2300 (UPRR Published Rates), while according to truckloadrate.com, trucks are running about $1.90/mile. So at 6,500 rail cars, that's $14.95 million/year and for the one way to Denver (550 miles) is $35.6 million. Now, that may seem like a lot of savings, but you can't charge the entire difference to fund the bonds (you have to make it worth wile), which means of the $20 Million in annual savings, you're looking at maybe 40% or $8.25 Million a year available to fund a $556 million dollar project. Provided trucking prices hold at these high levels. No wonder they aren't talking it up....which reminds me:
This was a publicly financed report and neither TxDOT, La Entrada, MOTRAN, the MDC or any other likely entity have a copy of this report available for download. I guess they are all still working on that communication thing all their high dollar consultants told them about.
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8 Comments
You mean like the one the LEAP Rural Rail District contracted with Iowa Pacific to build a couple of years ago at BI-20 and FM-1788? I think it was in the $4~$5 million dollar range (a couple of years ago).
As for the amount of revenue a track would generate, I was being generous using Lubbock-Denver, these tracks would eliminate much less truck miles than 550 per load.
At 14~16 miles, Seagraves to Seminole may work economically, the rest...I'm not so sure, especially if you can't count on N/S UPRR and Texas-Pacifico-FerroMex traffic using it.
yeah, like that one. If you could build 5 of those for $50 million it seems like it would take a lot of short hauls to burn up the other $500 million.
I don't really see a need here, only an economic development tool. And where rails isn't really needed, it gets abandoned or removed.
Now I AM confused .
Earlier this week I saw a TV report at 10PM stating that the rail route was a "done deal" going from Mexico to just east of El Paso and then north through New Mexico without coming near the Permian Basin at all !
This was to let the aginers know that the La Entrada SUPER HIGHWAY was still on the front burner Thru the Midland area .
Or..is this yet ANOTHER rail route ?
Otto, these are two seperate issues, but they are related by the projections of freight volume from the Pacific and Mexico that would pass N/S through Midland/Odessa.
Here is a recent email from Rod Ponton (Alpine City Attorney) to the NIMBY's in the Big Bend fighting tooth and nail to kill any La Entrada traffic of any kind through Presidio and on to Midland/Odessa:
Please pass on to your La Entrada mailing list.Good news on the La Entrada front. I was in Chihuahua on other business yesterday. While there, I spoke to some government officials who had just finished attending a binational signing ceremony, between Governors Reyes Baeza of Chihuahua, and New Mexico Governor Bill Richardson. They signed an agreement for cooperation between the states of Chihuahua and New Mexico to implement a plan to develop the "Logistical Corridor of the North". (Chihuahua does not call it La Entrada al Pacifico, but "Corredor Logistico del Norte"). Chihuahua is going to develop a major intermodal facility in the City of Chihuahua. All pacific rim and pacific coast trade entering Chihuahua, and all export goods from Chihuahua, will be handled by this facility. Mazatlan/ Topolobampo trade will be handled by this facility. Then Chihuahua will work with FerroMex (the Mexican railroad) to move the main railroad line from downtown Juarez/ El Paso, to Santa Teresa, N.M. The State of New Mexico will develop a major intermodal transfer facility in Santa Teresa. Transfer yards and tracks will be built to transfer containers to the Union Pacific and Burlington Norhtern tracks at Santa Teresa. Chihuahua's pacific rim trade and export goods will enter the United States at Santa Teresa, N.M., not at Ojinaga/ Presidio.
What has happened is that New Mexico, through Gov. Richardson, has outhustled Texas and Gov. Perry, to take the lead in attracting trade growth with the State of Chihuahua. What this means for the Big Bend area, is that La Entrada is dead. Chihuahua not only has no plans to bring Pacific rim trade to Ojinaga, for transshipment on to Midland/Odessa, they now have concrete plans in place to force all such traffic to their intermodal facility in the City of Chihuahua, and then on to Santa Teresa, N.M. Increased truck traffic in this area will come from natural, incremental, regional growth. It will not come from La Entrada al Pacifico. If Mexico does not bring the traffic to Ojinaga, then it will not exist to bring volumes of traffic through Alpine and Marfa.
Deal making at high levels has trumped the efforts of Midland to turn the Big Bend route into a major trade corridor. Bill Richardson has demonstrated that he is a savvy political operator. Big Bend's quality of life will remain high. We should increase our efforts to increase tourist traffic in our area, not truck traffic.
Rod Ponton
Alpine City Attorney
As for the source of the email from Mr. Ponton ... if you want to see home-grown West Texas leftie liberals, just poke around the rest of the site:
Amanda Marcotte would be proud.
Like MOTRAN, Bill Richardson would be wise not to put to much faith in Mexico delivering on any promises.
Thank you Ospurt..I think .
I wonder what the cost of an intermodal container loading and/or rail transfer facility in Seagraves, Seminole, Midland and McCamey would be, compared to the rail?