Report: East-West Rail Would Cost $1 Billion

Posted by Grant Scott-Goforth on Fri, Jul 19, 2013 at 1:07 PM

BOB DORAN
  • Bob Doran
A whole lot of money and a whole lot of cargo. That’s what a draft report says is necessary to build and pay for a “high risk” east-west railroad between the Samoa Peninsula and the national rail system in the Central Valley. The cargo necessary for a viable railroad would make Humboldt Bay one of the largest shipping ports on the West Coast — provided the necessary infrastructure could be built, the market holds, and the existing, mostly superior competition doesn’t spike the imagined endeavor.

The report, commissioned by the Humboldt Bay Harbor, Recreation and Conservation District, is still in draft stage. In it, BST Associates and Burgel Rail Group, of Washington and Oregon respectively, say high construction costs — $1.07 billion to $1.24 billion, depending on the route — come largely from the “extreme ruggedness” of the six prominent ridges and valleys between the Central Valley and coast. And steep, twisty terrain doesn’t just make planning a route and construction different — it increases operating and maintenance costs. The report estimates upkeep would cost $90,000 per mile for an east-west railroad — $18 million to $20 million a year, depending on the route.
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The report identifies three possible routes beginning in Samoa that could end in either Redding, Red Bluff or Gerber.

One arcs north of Blue Lake then down toward State Route 36:
FROM THE HBHRCD
  • From the HBHRCD

The second snakes through Eureka, Loleta and Fortuna down to Alton, where it turns east:
FROM THE HBHRCD
  • From the HBHRCD

The third points south down 67 miles of existing rail lines before punching east through the mountains near Fort Seward:
FROM THE HBHRCD
  • From the HBHRCD
Making the rail’s success even more challenging are the limitations of Humboldt Bay’s port — a necessary hub for the railroad’s viability. Says the report:

In order for this investment to be financially feasible, the rail line will need to generate large volumes of cargo. A rail line to Humboldt County would face strong competition from existing ports, primarily those on the U.S. West Coast. Humboldt County would face several competitive disadvantages relative to these other ports, including the need to cover the cost of constructing the new line, and the lack of a rail distance advantage. In addition to the lack of rail infrastructure, waterborne exports of large volumes of bulk commodities (or containers) would likely require substantial investments in new cargo terminals. Also, the Humboldt navigation channel is not as deep as that at most of the competing ports, which would also require a substantial investment. In conclusion, development of rail service to Humboldt County is likely to be both high cost and high risk.

Raw commodities such as coal, iron ore, grain and potash were among the potential commodities that could feasibly support the rail; container shipping, the report says, is too competitive. And under the most optimistic scenario, 11.5 million to 18.5 million metric tons of cargo would need to move across the rail line every year — three to five trains per day. Higher-cost scenarios put that figure at 65 million to 100 million metric tons per year — six to 10 trains a day.

The estimated volume of rail cargo required to make a new rail route to Humboldt County economically feasible would make Humboldt Bay one of the largest bulk ports on the West Coast. 

So is the port necessary for the rail? Or is the rail necessary for the port, as rail proponents have said
Is this chicken-egg dilemma going anywhere?

Meanwhile, rail proponents have been seeking $300,000 in public funding and support for a feasibility study of their own. It’s unlikely that the Harbor District’s pre-feasibility study — which reportedly cost $19,500 in public Caltrans cash — will quell rail proponents’ desire for the east-west line, or its bid for a study of their own

The final Harbor District report is expected to be officially released next week.

h/t Mike Dronkers

Comments (8)

Showing 1-8 of 8

Back on 10/31/2012 under the thread "Seven Revelations from Rob Arkley" I posted -- FOR FREE-- the following:

"What will kill the E-W rail link won't be Steve's "prog enviro assholes" but plain old Republican-beloved economics. The cost of obtaining, constructing and maintaining the right of way will simply be too great compared to the profits to be derived from it. Let's look at per-mile cost: "to add an additional main line to an existing railroad is about $2 to $3 million per mile in 2008 (http://www.trainorders.com/discussion/read…). Another estimate was $5 million/mile for restoration of an existing passenger line in NJ. Now these are existing, flatland lines. Distance from Fairhaven to Anderson via Korbel as straight lines is 107 mi. Including the need to foillow topography, the ground distance would probably be 130 -150 mi. At $5 million per mile for 130 mi that would be a cost of $650 million. And that DOESN'T include the cost of acquiring right of way, constructing in mountainous terrain, bridge-building, permitting etc. The cost of building the line could easily be $1 billion or more. Then there's cost of maintaining the line -- much of the area is very slide prone, and there's snow in winter too. Is there going to be sufficient return on this investment from possible logging and trans-shipping? Consider that despite running the NWP in the heyday of logging, Southern Pacific jettisoned it as soon as the federal government deregulated railroads. Why? Simply because the cost of maintaining the line was greater than the profit that could be made. Now if you can sucker the state or the federal government into ponying up the money to build the line (i.e., OUR money, not that of investors) then the economics (for the investors) might make more sense."

Perhaps I should have been a consultant...

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Posted by Rumbustious on 07/19/2013 at 11:09 PM

A little more regarding railway economics. When SP was running the Northwestern Pacific (its glory days) for every $10 they grossed, they had to spend $16 in maintenance and repair (source: Ray Hillman, local railway historian).

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Posted by Rumbustious on 07/20/2013 at 10:14 AM

No, wait! We need a better $200k study done. This one is not accurate.

No, wait! We'll get a TIGER grant to cover the billion dollar deficit.

No, wait! If we just build it first and ignore the facts they will come out of nowhere and it will magically turn a profit.

No, wait. We can easily handle 4,000 rail cars full of LNG a day or 8,000 cars full of coal a day.

No, wait. Laser technology is making amazing progress. We can bore tunnels through the mountains in a few days.

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Posted by Mutt on 07/20/2013 at 1:35 PM

Nuclear-powered rail guns...dirigibles...jetpacks...teleportation...slingshots...
Anyone wanna hire me to do a study?

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Posted by barryevans on 07/20/2013 at 1:44 PM

I don't see a problem here. Didn't I hear the east/west supporters were going to pay for this debacle with their own monies? Oh wait, they changed their minds didn't they? Wonder why?

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Posted by G. Gilbert Yule on 07/20/2013 at 4:13 PM

As long as we can continue the wholesale exporting of our natural resources, we can keep living the dream like Third World nations.

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Posted by Reinventing The Wheel1 on 07/21/2013 at 12:18 AM

Rumbustious was and is right. The thing he or she misses is that the "Republican-beloved economics" solution to otherwise non-economic programs is to socialize the costs and privatize the benefits. That means this thing isn't dead just because it's ridiculous. It just needs to provide a potential benefit to enough of the right people. (Pun intended.) The little people can pay.

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Posted by Sanity's Overrated on 07/21/2013 at 9:23 AM

Didn't I hear somewhere that the purpose for USA upgrading of Panama Canal was to allow larger cargo vessels access to our eastern ports?

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Posted by Louis Iglesias on 07/23/2013 at 7:21 AM
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